Bill Gross cautioned that US equities—especially those prone to volatility—may not be suitable holdings in an environment where policy shifts hinge on unpredictable leadership.
“My portfolio of defensive stocks is up, so I won’t complain about today’s market,” the Pimco cofounder wrote on X Wednesday evening. “But let me ask—would you really want client assets tied up in high-beta US stocks that rise or fall based on whether the President had a restful night and changes course by morning?”
His remarks followed President Trump’s surprise announcement of a 90-day suspension of his previously aggressive tariff plan targeting select countries. The market reaction was swift and extreme: the S&P 500 surged 9%, marking its best day since 2008; the Dow rallied nearly 3,000 points; and the Nasdaq soared 12%.
Industry leaders responded quickly. Pershing Square CEO Bill Ackman framed it as a masterstroke of negotiation, labeling it “the art of the deal” on X. Friedrich Merz, expected to become Germany’s next chancellor, described it as a sign of European resolve being taken seriously.
Gross, however, focused on long-term implications, especially for younger investors. On Tuesday, he warned that the recent volatility could have a lasting impact on generational sentiment and behavior.
“This crash will shape how Millennials and Gen Z approach investing for years,” he wrote. “What was once seen as a surefire way to build wealth will now breed caution. Expect lower P/E multiples, higher yields, and a regime of low single-digit returns.”
For RIAs and wealth advisors, the message is clear: now may be the time to guide clients—especially younger ones—toward more risk-aware strategies that emphasize resilience over rapid growth.
