Forget Tariffs: 2 Other Reasons a Stock Market Crash Could Occur Under President Trump

Group 1: Economic and Market Uncertainty - President Trump's tariff policies have introduced significant uncertainty into the global economy and financial markets, with import taxes ranging from 10% to 50% imposed on goods from nearly all trading partners [1] - The Supreme Court ruled these tariffs illegal, yet Trump is expected to continue pursuing similar policies, complicating future planning for companies [2] Group 2: AI Industry and Market Performance - Despite macroeconomic uncertainty, 2025 saw a solid GDP growth of 2.2% and an 18% rise in the S&P 500, significantly above the historical average of around 10% [5] - The performance of the S&P 500 has been heavily influenced by a few AI-exposed stocks, particularly the "Magnificent Seven," with Nvidia alone contributing 15% to the index's total return in 2025 [6] - Generative AI remains speculative, with industry leaders like OpenAI projected to incur losses of $14 billion this year, while companies selling chips and data center equipment continue to profit [7] Group 3: Market Valuation Metrics - The cyclically adjusted price-to-earnings (CAPE) ratio currently stands at 40, a level not seen since the dot-com bubble peak in 2000, indicating potential overvaluation in the market [8] - Increased spending on data centers may negatively impact corporate earnings due to rising depreciation expenses [8]