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4 Cheap Stocks With Solid Fundamentals to Offset Market Uncertainty
Indrajit Bandyopadhyay
8 min read

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The U.S. stock markets have been rattled by the new tariff regime imposed by President Trump earlier this year. The President has been indicative of tariff hike on its trading partner since he assumed the Oval office. The S&P 500 Index made its all-time high in mid-February before starting its downtrend. The major fall across global markets started earlier this month when the U.S. government announced a blanket tariff of 10% for all imports and a higher rate for key trading partners on April 2. The highest tariff of 145% has been imposed on China, raising apprehension of a trade war between the world’s two largest economies as the country imposes similar tariff hikes for the United States.

The imposition of significant tariffs against each other by the United States and China has led to a rise in the risk of a recession or stagflation. This tariff war comes at a point when the global markets started to recover from a period of high inflation and supply-chain disruptions due to several conflicts between countries, especially Russia and Ukraine.

The S&P 500 Index has declined 6.8% so far this year, after a strong rally in 2024. The decline was primarily due to rising uncertainty on account of tariffs.

Zacks Investment Research
Zacks Investment Research


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Top Brokers Lower S&P 500 Target

Amid the rising uncertainty due to tariffs, several top brokers, including Deutsche Bank, Barclays, Citi, Goldman Sachs and others, have lowered their 2025-end targets for the S&P 500. The reduction in the target ranges between 10% and 25%. However, each of these brokerage houses has its most optimistic target for the S&P 500 Index higher than current levels, except J.P. Morgan, which expects 5200 for the index by year-end. These analysts believe that tariffs could send prices higher and weigh on demand. There could also be less trade with China and a slowing of economic activity, leading to a decline in earnings for constituent companies of the S&P 500 Index.

However, tariffs have been paused for a 90-day window for all U.S. trading partners, except China. Several countries are rushing to sign trade agreements with the United States to avoid the significant hike in tariffs. Although there is a rising hope of negotiation between the world’s top two economies, there is a stalemate at present as both countries seem to be unwilling to lower their absurdly high tariff rates.

However, there have been some improvements, with both countries exempting certain product imports from their tariff lists. While China is exempting medical equipment and ethane among others, the U.S. government has exempted electronics like smartphones and laptops, and plans the same for auto parts.

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