Investing.com -- The stock market may be bottoming amid indications that tariffs may become more targeted and negotiable, according to Ed Yardeni, president of Yardeni Research.
Yardeni highlighted President Donald Trump’s comments from Friday, which introduced a degree of flexibility into his stance on tariffs, hinting at a potential shift in policy that could impact the market.
"I didn’t change my mind. I don’t change. But the word ‘flexibility’ is an important word. Sometimes there’s flexibility. So there will be flexibility, but basically it’s reciprocal,” said U.S. President Donald Trump when asked about his tariff policies.
Overall, Yardeni expects the U.S. stock market to remain “choppy” through mid-2025, however, he argues that it “could be choppier to the upside now that it has been choppy to the downside since mid-February.”
Historically, March has not been strong for the S&P 500, but the index has typically rebounded through late July.
The strategist also observed a broad stabilization across major market indexes recently, which he attributes to the likelihood of stronger-than-expected U.S. economic growth in the spring. This growth, he argues, may reinforce the market’s foundation and could lead to a reversal of the recent trend where investors favored global over domestic strategies.
“We expect that economic growth will look better in the US than overseas in coming months,” Yardeni continued. “If so, then the dollar could also strengthen. The consensus view is too pessimistic on the U.S. and too optimistic on China and Germany, in our opinion.”
In the note, Yardeni also touched on FedEx (NYSE:FDX), noting that the company’s recent reduction in profit forecasts for the third consecutive quarter might not be as indicative of the U.S. economy’s health as it once was.
He pointed out that the S&P 500 Air Freight & Logistics index’s forward earnings have diverged from the broader S&P 500’s forward earnings, suggesting that factors other than U.S. economic strength, such as weaker international growth, could be influencing the company’s performance.