U.S. equities are poised to resume their upward trend, underpinned by a favorable outlook for both economic growth and corporate earnings, according to Steve Chiavarone, deputy chief investment officer at Federated Hermes.
“If you cut away the noise and volatility, I’m not going to bet against the US market in an environment where earnings are growing, estimates are accelerating, economic data is good and rates are going to come down,” Chiavarone said in an interview.
He described the recent market pullback as a constructive correction following a four-month rally, noting that it helps strip out “froth” and “hot money” from the market.
“You can’t go from April lows to the moon in one straight line,” he added.
Chiavarone highlighted potential buying opportunities in cyclical and rate-sensitive stocks. While acknowledging that U.S. tariffs are higher than last year, he believes the current levels remain “digestible” for American corporations.
On the recent spike in global bond yields, he characterized it as a “comment” on the financial conditions of developed markets worldwide, but cautioned that “there’s a long graveyard of folks that have tried to bet against governments.”
He continues to maintain a neutral view on large-cap growth stocks, expecting that the market rally will eventually extend beyond technology heavyweights.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.