Equity markets in the U.S. are expected to remain volatile in the near term, given the trade war escalations with China and other countries. Moreover, the upcoming earnings season is likely to drive volatility higher, especially if companies lower their outlooks due to macroeconomic headwinds and slowing consumer demand.
The tariff war is expected to increase the cost of goods across multiple sectors, such as automobiles, which will drive down demand and potentially increase inflation. Furthermore, if inflation rises, the Federal Reserve will be forced to raise interest rates, which will lower the discretionary income of households.
