Citigroup Strategists Warn Of Short-Term Risks In U.S. Stock Market

According to Odaily, Citigroup strategists have expressed concerns that the current 4.5% increase in U.S. stocks might be the best short-term outcome due to risks associated with policy proposals from U.S. President Donald Trump. Led by Scott Chronert, the team noted that while investors are betting on Trump's 'America First' policies to benefit businesses, the potential fundamental disruptions from these policies may not yet be fully priced in. Although their overall outlook for the year remains unchanged, they acknowledge a slight increase in near to mid-term downside risks. In 2025, the performance of U.S. stocks has lagged behind global markets, primarily due to fears that Trump's protectionist stance and proposed import tariffs could drive inflation. Additionally, investors are questioning the high valuations of major tech companies, with four of the seven tech giants—Apple, Tesla, Alphabet, and Microsoft—currently experiencing declines. Compared to the peak at the end of 2023, the contribution of these giants to earnings growth has also slowed. Chronert highlighted that the current momentum is coming from other sectors within the S&P 500, indicating a potential broadening of gains beyond the large tech stocks, though this trend has so far been limited to other large-cap stocks.