U.S. Stock Market Poised to Recover from Tariff Shock... 7 Promising Sectors for the Second Half

Toss Securities Research Center's Outlook for the U.S. Stock Market in the Second Half
"First-half correction driven by policy uncertainty"
"Tax cuts and stimulus measures expected to revive investor sentiment"

The Toss Securities Research Center analyzed the main causes of the U.S. stock market correction in the first half of the year in its "2025 Second Half Outlook" report, and identified seven promising sectors for the second half, including B2B software, cybersecurity, and space & defense.

According to the report released on June 18, in the first half of this year, the U.S. stock market underwent a correction due to increased uncertainty stemming from the Donald Trump administration's radical tariff policies. In fact, the S&P 500 and Nasdaq indices fell by about 20% from their peaks, but the fundamentals of the U.S. economy remained relatively solid.

The Research Center stated, "The correction in the first half was driven by policy uncertainty, not by deteriorating earnings," and added, "Given the increase in earned income and robust employment indicators, it is difficult to attribute the decline to structural problems in the economy."

For the second half, the Trump administration's tariff and immigration policies remain a burden. However, the Center expects that ongoing negotiations will gradually ease uncertainty toward the end of the year. The analysis suggests that stimulus measures such as tax cuts, along with strong corporate earnings, will support a recovery in the stock market.

The Research Center explained, "Tariff-related uncertainty is gradually subsiding, and the U.S. government is easing tensions through negotiations with major countries." It also forecasted, "Although stock price volatility may temporarily increase in the third quarter, investment sentiment is expected to stabilize toward the end of the year as the Federal Reserve lowers its benchmark interest rate."

The seven promising sectors for the second half are: consumer goods, robotics, energy, B2B software, cybersecurity, semiconductors, and space & defense.

Considering the direction of the Trump administration's policies, the increase in income from tax cuts is expected to boost consumption, while the revival of manufacturing and restrictions on immigration are projected to drive demand for robotics. In addition, changes in the administration's energy policy are anticipated to have a positive impact on companies providing energy infrastructure services.

From an earnings outlook perspective, the Center emphasized the need to pay attention to sectors that have raised their earnings guidance despite high uncertainty. Sectors expected to deliver profit growth but still trading at reasonable valuations include B2B software, cybersecurity, semiconductors, and space & defense.

Lee Youngkon, head of the Toss Securities Research Center, stated, "The main goal of this report is to reflect on the past half-year and help investors plan ahead," adding, "We will continue to provide in-depth analysis and insights so that investors can prepare for the second half with a rational perspective."

The Toss Securities Research Center was launched in September last year with the aim of providing simple yet professional reports for individual investors. Anyone can access the Center's reports through the Toss Securities website.