Should You Really Buy Stocks With President Trump's Tariffs Paused for 90 Days? Wall Street Has a Clear Answer for Investors.

The S&P 500 (^GSPC 0.28%) peaked in February 2025, then reversed course when the Trump administration began imposing tariffs on foreign goods. Particularly shocking were the reciprocal tariffs President Donald Trump announced on April 2, which would collectively raise the average tax on U.S. imports to its highest level since the early 1900s.

The S&P 500 has since fallen 13% from its record high as Wall Street reacted to the abrupt shift in U.S. trade policy. But on April 9, President Trump paused the reciprocal tariffs for 90 days to allow time for negotiations with individual countries. The only exception was China. The U.S. now charges a 145% import tax on Chinese goods.

Should investors buy stocks during the 90-day pause? Wall Street expects substantial volatility in the near term, but most analysts think the S&P 500 is headed much higher in the remaining months of 2025. Here are the important details.

The 90-day pause on reciprocal tariffs means 90 more days of stock market volatility driven by uncertainty

Several prominent business leaders have expressed concerns about the tariff schedule that President Trump outlined on April 2. Billionaire hedge fund manager Bill Ackman actually called for a 90-day pause. "I strongly believe launching tariffs on April 9th against the entire world -- massively in excess of what we are being charged -- is a mistake," he wrote.

BlackRock CEO Larry Fink said the U.S. economy is headed toward recession, if not there already, and warned that tariffs could have a more severe impact on inflation than most people anticipate. Fink also speculated that uncertainty created by the 90-day pause has forced companies to pause capital expenditures. Buying property, plants, or equipment is simply not sensible without more clarity on U.S. trade policy.

That uncertainty means many companies will withhold guidance when they report financial results throughout April and May. In turn, the stock market will probably be range-bound yet volatile while investors await more details concerning which goods will be subject to tariffs and to what extent. Case in point, the S&P 500 added over 9% on April 9 when President Trump delayed the tariffs, but it dropped nearly 4% the next day.

However, in a recent CNBC interview, Larry Fink still expressed confidence that companies would continue to allocate capital to data centers, artificial intelligence, and infrastructure, meaning those stock market themes are still viable investment ideas for anyone with a long time horizon. "Long term, I'm less worried about some of these issues. But short-term, I'm petrified by some of these issues," he said.

Image source: Getty Images.

Wall Street has become increasingly pessimistic, but most analysts still see significant upside in the stock market

Wall Street was rife with enthusiasm when the year started. Analysts expected the Trump administration to focus on deregulation and tax cuts to supercharge the economy. Instead, the administration has fixated on trade policy and tariffs to the point where many business leaders and economists now anticipate a U.S. recession.

What makes that particularly remarkable is that President Trump inherited an economy that was "the envy of the world with 2.8% growth last year," according to The Wall Street Journal. However, he seems to have squandered that momentum by not only outlining the most aggressive tariff hikes in U.S. history but also sending mixed messages by whipsawing on policy decisions.

Consequently, Wall Street has become increasingly pessimistic. The consensus full-year earnings estimate for S&P 500 companies has dropped from 14.3% in December to 9.8% in April, according to LSEG. Also, among the 17 investment banks and research firms listed in the chart below, the median year-end forecast for the S&P 500 has been cut from 6,600 to 6,100 during the same period.

Source: Yahoo Finance and Reuters.

Among the 17 investment banks and research firms listed in the chart above, the median year-end target for the S&P 500 is 6,100. That forecast implies 14% upside from its current level of 5,363.

As mentioned, many of the institutions above have downwardly revised their forecasts to account for slower economic growth and higher inflation caused by changes in U.S. trade policy. Expect more downward revisions if the Trump administration reinstates the same tariff schedule following the 90-day pause. However, the stock market could soar if the U.S. can negotiate more favorable terms while duties are delayed.

As things currently stand, many Wall Street analysts think the stock market will generate significant returns in the remaining months of 2025. Indeed, the median target price implies the S&P 500 will approach its previous record high of 6,144 by year end.

Investors should not take those gains for granted -- no one knows what President Trump will decide during the 90-day pause -- and the situation could get much worse if the reciprocal tariffs outlined by Trump take effect once the postponement expires. However, putting money into high-conviction stocks at a measured pace is a sensible decision in the current environment. But that only applies to investors who plan to leave their money in the market for at least three to five years.