Economist Jeremy Siegel urged investor caution in his latest column, citing uncertainty over tariffs, the economy and growing competition in the artificial intelligence market.
"As we move through the next few weeks, investors should remain focused on earnings strength, the trajectory of interest rates, and developments on the tariff front. While growth stocks continue to dominate, any shift in margins or competitive dynamics — especially in AI — could create volatility," the WisdomTree and Wharton School economist wrote in a column posted Monday.
"Caution is warranted as we navigate the complex dynamics ahead," Siegel said.
Weaker economic data and potential tariff changes, which weighed on stocks Friday, "could shake up earnings expectations and global trade flows," he said.
"While immediate action on tariffs isn’t expected until late March or early April, uncertainty is already being felt in earnings calls, as companies factor in potential disruptions to supply chains and costs," Siegel wrote, adding that Wall Street favors the administration's "efficiency and budget-tightening moves," which some see as a counterbalance to trade policy concerns.
Market breadth has improved this year, although growth stocks continue to outpace value in the long term, Siegel said.
"Tech stocks, particularly in AI," he said, "continue their remarkable resilience — NVIDIA, despite a sharp correction earlier, was just 6% below its all-time high before Friday’s selloff, a stunning recovery that underscores the persistent strength of the sector."
Nvidia's earnings call Wednesday is a crucial market event this week, particularly related to CEO Jensen Huang’s comments regarding competition in AI chips and potential margin pressures, Siegel wrote.
"With new AI developments from companies like DeepSeek and concerns about future demand for chips, any sign of margin contraction in leading tech names could ripple through the market," he explained. "Tesla, too, remains under scrutiny, with its recent selloff and bounce back highlighting market sensitivity to competitive pressures, particularly from China’s BYD."
Jeremy Siegel. Handout photo
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