Investor sentiment is "extremely bearish"! The S&P 500 index is approaching a pullback zone.

The US stock market is currently facing negative sentiment due to Trump's tariff policies. The S&P 500 index experienced a significant decline and is attempting to rebound, but it remains close to the pullback range. Andrew Slimmon, senior portfolio manager for US stocks at Morgan Stanley Investment Management, stated that market investors seem to only focus on the "negative impact" of tariffs, but he does not believe these policies will cause inflation to soar or severely impact the US economy. The S&P 500 index fell by 0.76% on Tuesday, closing at 5,572.07 points. According to calculations by Dow Jones Market Data, if the index falls to 5,529.74 points, it will officially enter the pullback range (a drop of 10% from recent highs). Recently, volatility in the US stock market has been increasing, with investors expressing concerns over the White House's new and upcoming tariff policies, fearing that escalating trade wars could harm the US economy and push up inflation. On Tuesday, President Trump announced on the social platform Truth Social that the US would impose an additional 25% tariff on all steel and aluminum imported from Canada, raising the total tax rate to 50%. He stated that this was a response to Ontario's imposition of a 25% surcharge on electricity exports to the US, which will take effect on Wednesday. However, within less than six hours, White House chief trade adviser Navarro announced that Trump no longer plans to implement this tariff adjustment. Slimmon noted that uncertainty in the market is undeniable, but he believes that the goal of the Trump administration is not to push the economy into recession. Meanwhile, the market is preparing for Trump's equal tariffs policy set to take effect on April 2. Slimmon stated that before this date, it may be difficult for the US stock market to see a significant rebound, as investors have become "extremely pessimistic" due to tariff concerns. However, he also believes that the recent widespread sell-off has created some "good" buying opportunities. He advised investors to pay more attention to corporate fundamentals amidst the market's negative reaction to Washington's policies and predicted that the S&P 500 index will still rise this year, but possibly only by single digits. The US stock market has shown weakness this year, with the S&P 500 index rising by 24.2% in 2023 and 23.3% in 2024, but as of Tuesday, it had fallen by 5.3% in 2025. Tom Essaye, founder of Sevens Report, pointed out in a report on Tuesday that if concerns about the economic slowdown caused by policies do not materialize, the current market has returned to a "reasonable valuation range" and is suitable for long-term investors to gradually buy in, provided they can withstand the market's severe fluctuations. The Cboe Global Markets Inc Volatility Index (VIX), which measures market investor panic, has risen by approximately 55% this year, closing at 27 points on Tuesday. Slimmon noted that with the S&P 500 index likely only recording single-digit gains for the year, such intense market fluctuations indicate that uncertainty is still dominating investor sentiment. He added that those "speculative" stocks have suffered heavily in the recent sell-off, particularly in momentum stocks. In the current market downturn, Slimmon is optimistic about some major Wall Street banks, believing that their fundamentals remain strong. At the same time, he believes that some large technology companies that have recently experienced significant declines are worth watching, as the valuations of some semiconductor stocks are now more attractive than three weeks ago. However, overall, tech stocks have not performed well, with artificial intelligence chipmaker NVIDIA Corporation (NVDA.US) falling by 19% in 2025. The iShares Semiconductor ETF (SOXX.US), tracking the US semiconductor industry, has fallen by nearly 11% year-to-date. In addition, the Roundhill Magnificent Seven ETF (MAGS.US), which holds the "Big Seven" tech stocks, has already dropped by 14.5% this year. Amid concerns about economic slowdown, traders expect the Fed to cut interest rates three times this year, a expectation reflected in pricing in the federal funds futures market. Slimmon stated that he does not believe the US will fall into a recession this year, and the Fed may act as a "balancing force" for the market to alleviate investors' concerns about the potential impact of Trump administration fiscal policies on the economy.