Citigroup Strategist: U.S. stocks may have already reached short-term peak

The Citigroup strategist stated that due to the risks brought by Trump's policy proposals, this year's current 4.5% rise in US stocks may already be the best short-term result. The team led by Scott Chronert said that investors are betting on Trump’s “America First” policy will have a "pro-business" impact, "We do not oppose this, but at the same time we also believe that the damage of related policies to fundamentals may not yet be priced in. Our view for the whole year has not changed significantly, but there is a slight increase in downside risk in the near and medium term." The performance of US stocks lagged behind global stock markets in 2025 because markets were worried about Trump's protectionism and proposed import tariffs might stimulate inflation. Investors also questioned high valuations of tech giants; four out of seven companies (Apple, Tesla, Alphabet and Microsoft) are currently declining. Compared with peak levels at end-2023, contributions from these seven giants towards earnings growth have slowed down as well. Chronert said that momentum now comes from other parts of S&P 500 index; there are signs of an upward trend expanding beyond large-cap tech stocks but so far it is limited to other large-cap stocks only.