Investors and consumers remain deeply pessimistic about the market, with widespread fears of an impending recession. Yet, several leading Wall Street strategists argue that these concerns are overblown — and that current conditions may, in fact, present a compelling opportunity for long-term investors.
The escalation of trade tensions has undoubtedly weighed on sentiment. The University of Michigan’s latest consumer survey showed an 8% drop in confidence from March, driven by anxiety over inflation, employment, and household financial health. Meanwhile, the American Association of Individual Investors recently recorded its twelfth consecutive week of a negative bull-bear spread, indicating more bearish investors than bullish ones.
Despite these fears, a growing number of market strategists are pushing back against the consensus view that the economy is headed toward recession. They note that corporate earnings remain healthy, the labor market continues to show resilience, and household balance sheets are broadly stable. For advisors guiding client portfolios, the key takeaway is that negative sentiment, when detached from fundamentals, often serves as a contrarian signal — potentially heralding a market rebound.
Alicia Levine, head of investment strategy and equities at BNY Wealth, emphasizes that extremely depressed investor sentiment typically marks a bottoming process in the markets. "Recession is on everyone’s mind right now, and paradoxically, that is a positive," Levine explained. "Markets price in known risks well ahead of time, and much of the downside from a potential recession has already been discounted."
Levine points out that the source of recent market stress — trade policy uncertainty — is a political rather than an economic event. In her view, the underlying economy remains fundamentally sound. Moreover, she sees room for optimism, noting that President Trump has signaled a willingness to adjust tariffs if negotiations progress, as evidenced by his recent comments about potentially rolling back tariffs on Chinese goods.
Levine expects that some resolution or partial agreement will emerge before the end of the current 90-day tariff pause, further alleviating market pressures. "There’s a growing belief that we’ve seen the peak of the tariff threat," she said. "If tensions ease, the right tail for the market broadens significantly."
Similarly, Tony DeSpirito, global chief investment officer of fundamental equities and a portfolio manager at BlackRock, remains constructive on equities despite the trade-related volatility. DeSpirito, who oversees several income and value-oriented strategies including the iShares Large Cap Value Active ETF (BLCV), has consistently argued against the idea that tariffs will meaningfully derail economic growth.
As early as March, DeSpirito challenged the wave of Wall Street downgrades, telling Bloomberg that many institutions were overly cautious. He has maintained that view, citing stable fundamentals and attractive valuations. DeSpirito's approach focuses on bottom-up stock selection, identifying high-quality businesses trading at discounted prices due to broad market fear rather than company-specific risks.
From his vantage point, the dislocation caused by tariff fears has created opportunities for patient investors to acquire strong companies at attractive entry points. DeSpirito advises clients to maintain discipline and focus on fundamentals rather than allowing short-term headline risks to drive portfolio decisions.
Another strategist expressing optimism is Julian Emanuel, chief equity and derivatives strategist at Evercore ISI. Emanuel acknowledges that investor anxiety is understandable given the geopolitical backdrop, but he stresses that sentiment is often a lagging indicator rather than a predictive one. "When fear becomes this pervasive, it tends to mark the end rather than the beginning of declines," Emanuel said.
He draws a parallel to late 2018, when widespread recession fears led to a sharp sell-off — followed by a robust rally in early 2019 as it became evident that economic fundamentals were sturdier than anticipated. Emanuel believes a similar dynamic could unfold this time, particularly if there are positive developments on trade policy.
He also highlights the strength of consumer balance sheets, which remain healthier today than during past periods of market stress. Credit conditions, personal savings rates, and wage growth metrics all point to a consumer base that is more resilient than many assume. For wealth advisors, this underlines the importance of looking beyond the noise and focusing on durable economic trends when advising clients.
Finally, David Kostin, chief U.S. equity strategist at Goldman Sachs, recently reiterated his firm's overweight position on equities. Kostin argues that although the trade war introduces uncertainty, it does not yet rise to a level that warrants a defensive stance. His team’s models suggest that equity valuations are reasonable relative to long-term earnings prospects and prevailing interest rates.
Moreover, Goldman’s analysts believe that U.S. corporations, particularly large-cap multinationals, are well-positioned to weather short-term disruptions. Many companies have already adjusted supply chains, hedged currency exposures, and developed contingency plans to mitigate tariff impacts. Kostin notes that market volatility, while uncomfortable, is not inherently negative; it often presents tactical opportunities for those willing to step in during periods of stress.
For advisors working with high-net-worth clients, these insights provide a critical counterbalance to the dominant media narrative. It is essential to distinguish between political uncertainty and genuine systemic risk. While it is prudent to maintain diversified portfolios and be mindful of volatility, fleeing the market based on sentiment alone risks missing potential upside as conditions stabilize.
In practical terms, strategists recommend focusing on sectors and companies with strong domestic exposure, pricing power, and healthy balance sheets. Defensive sectors such as healthcare and utilities offer resilience, while technology and financials continue to present opportunities for growth-oriented investors. Value stocks, long overlooked during the bull market’s earlier phases, are increasingly gaining favor as investors seek quality at a discount.
Importantly, these strategists caution against attempting to time the market. Given the unpredictability of political developments, attempting to trade around tariff news is a high-risk strategy. Instead, they advocate for a disciplined approach centered on long-term fundamentals, periodic rebalancing, and tactical opportunism when valuations become compelling.
In summary, while the trade war has clearly injected uncertainty into the markets, the underlying U.S. economy remains solid. Corporate earnings, labor market strength, and household finances suggest resilience, not imminent recession. Negative sentiment, while pervasive, appears disconnected from these fundamentals — creating opportunities for discerning investors.
For wealth advisors, the message is clear: encourage clients to maintain perspective, avoid emotionally-driven decisions, and consider using periods of market weakness to selectively add to high-quality equity positions. Over time, maintaining a disciplined, fundamentals-based approach has historically proven more effective than reacting to fear — and today's environment appears no different.
While risks remain, particularly around the trajectory of trade negotiations, the weight of evidence supports a cautious but constructive view on equities. As always, advisors should tailor strategies to individual client goals, risk tolerances, and time horizons — but the broad message from leading strategists is one of cautious optimism, not panic.
