US equity futures rose following Fed Chairman Jerome Powell’s reassurance that tariff-related inflation would be ‘transitory’. He also suggested the US economy is in good health. 

Though his mandate is domestic, Powell is, of course, speaking to a global audience. A widely reported Bank of America survey reveals that investors made the ‘biggest ever’ cut to US equity allocations this March, due in part to uncertainty over tariffs and trade policy.  

US stocks are not only of interest to US investors.  As Torsten Sløk shows, there has been a significant rise in foreign holdings of US equities since the financial crisis.  

Sløk points out that, given these dynamics, “the downside risks to the S&P 500 as a result of foreigners selling are significant”. 

How did we get here? 

While Powell’s statement has gone some way to reassure investors, its remarkable that reassurance about US equities was needed at all. A Goldman Sachs survey at their Global Strategy Conference in January reveals that 58% of respondents expected US stocks to perform best globally in 2025. Only 8% expected European stocks to perform best. 

In this context, it’s no surprise Powell sought to steady the ship. But not without emphasising how much uncertainty remains.  

With so little certainty, it no wonder the gold price continues to shatter records.  

For investors, there are strong cases for both pessimism and optimism. One party’s uncertainty is another party’s opportunity.  

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