U.S. equity markets opened lower on Monday after President Donald Trump announced plans to increase the global tariff rate from 10% to 15% under Section 122 of the Trade Act. While the news has created some volatility, there are reasons to stay calm and keep your long-term investment strategy in focus.
Here's what's happening in the markets today and what it means for your portfolio.
U.S. stocks are trading in the red as investors digest the latest tariff announcement. Defensive sectors like health care and utilities are holding up better than others, while growth-focused areas such as technology and consumer discretionary are seeing declines.
The 10-year U.S. Treasury yield sits at 4.06%, down slightly from recent levels, while the 2-year yield is at 3.48%. Lower yields often signal that investors are seeking safer assets during uncertain times.
In commodities, gold prices have climbed more than 2% as investors turn to precious metals for stability. Oil prices are also up nearly 1%, supported by ongoing negotiations between the U.S. and Iran.
President Trump first introduced a 10% global tariff on February 20, following a Supreme Court ruling that blocked tariffs imposed under the International Emergency Economic Powers Act (IEEPA). Over the weekend, he announced the rate would increase to 15%.
These tariffs, implemented under Section 122, can remain in place for up to 150 days. After that period, the administration is expected to pursue other legal avenues—such as Section 301 or Section 232—to maintain elevated tariff rates.
According to the Yale Budget Lab, the effective U.S. tariff rate was 16% before the Supreme Court's decision. With the new 15% global tariff, that rate is projected to drop slightly to 13.7%.
The good news? The 15% tariff rate is unlikely to cause major disruptions to economic activity. While tariff rates are expected to stay higher than historical norms, the overall impact should be manageable.
We recommend staying focused on the fundamentals: corporate profits remain strong, and economic activity continues to show resilience. Don't let short-term headlines derail your long-term investment plan.
This week, more than 50 S&P 500 companies are set to report earnings, and all eyes will be on NVIDIA's results, due Wednesday. Investors are eager for the latest insights on AI spending trends, which have been a key driver of market gains.
Other major companies reporting include Salesforce, Lowe's, and Home Depot. These results will provide important clues about consumer spending and business investment.
So far, 85% of S&P 500 companies have reported fourth-quarter results, and the numbers have exceeded expectations. Earnings per share are on track to grow 12.7%—well above the 7% growth rate anticipated at the start of the year.
The technology sector has been a standout performer, with earnings growth expected to exceed 25% year-over-year. That's the highest among all S&P 500 sectors.
However, despite strong earnings, the technology sector has struggled in 2026, down roughly 4% year-to-date. Concerns about AI disruption, particularly for software companies, have weighed on the group.
While markets may feel uncertain in the short term, there are smart ways to position your investments for success.
A balanced approach between growth and value sectors will be key in 2026. Growth sectors like technology offer long-term potential, but value sectors can provide stability during periods of volatility.
We recommend overweight positions in the following sectors:
At the same time, consider underweight positions in:
Short-term market movements can be unsettling, but remember that volatility is a normal part of investing. The fundamentals supporting equity markets remain strong, with robust corporate earnings and healthy economic activity.
Don't let headline-driven fears push you into making rash decisions. Stick to your investment plan, stay diversified, and keep your focus on your long-term goals.
Here's how to navigate the current market environment:
If you're unsure about your investment strategy, consider speaking with a financial advisor who can help you make informed decisions based on your unique situation.
The key takeaway? Markets will always face periods of uncertainty, but staying focused on the fundamentals and maintaining a long-term perspective will serve you well.