Forget President Donald Trump’s prices! There is a much more sinister concern for Wall Street.

• The S&P 500, the Nasdaq Composite and the industrial average of Dow Jones crossed their path through episodes of historical volatility in 2025.

• Donald Trump’s pricing and commercial policy has delighted inflationary fears and increased uncertainty to Wall Street.

• However, a historically expensive stock market implies that the quality of business profits is of the utmost importance.

• 10 actions that we love better than the index S&P 500 ›

It was a fairly memorable year for Wall Street, with the sea S&P 500 (Snpindex: ^ GSPC)growth powered by stocks Nasdaq Composite (Nasdaqindex: ^ xicic)and ageless Industrial average Dow Jones (Djintices: ^ dji) Navigate in their way through episodes of historical volatility.

For example, during a one -week section in April, the S&P 500 endured its fifth largest percentage drop of two days in 75 years, and has recorded its biggest point gain since its creation. The reference index has also provided one of its most solid yields of three months since 1950.

With the S&P 500 and the Nasdaq Composite moving to new peaks of all time, and the Dow Jones with a stone throw away from exceeding its record established in December, it would seem that nothing can slow down this creative machine of wealth of good faith. But things may not be as unbreakable as they seem.

Although a lot of attention is currently paid to the price and commercial policy of President Donald Trump and how it could have a negative impact on Wall Street, a much more sinister concern is pending that can act as a significant brake on actions.

On April 2, after the end of the discussions, Donald Trump unveiled his long -term price and his trade policy. It included a global 10% scanning rate, as well as higher “reciprocal rate rate” over dozens of countries that have historically experienced unfavorable commercial imbalances with America.

The main objectives of the president with its tariff and commercial policy are to promote interior manufacturing, to maintain the price of competitive American goods with those introduced from foreign markets and to fulfill the keychain of the federal government with tariff income. Although pricing income undeniably climbed, the level of uncertainty is also associated with these prices.

One of the most important problems with President Trump’s pricing and commercial policy is that there has been little follow -up or consistency. There were two separate 90 -day breaks on reciprocal prices with the world economy n ° 2 by the gross domestic product, China, and the president has adjusted the date of entry into force, the rate of reciprocal rate and / or the goods submitted at prices for other countries on various occasions. Wall Street requires predictability, and this administration has not provided it.

Investors are also concerned about the potential inflationary impact of the president’s pricing policies.

Do a report (“Do import rates protect American companies?”) Published in December by four economists from the New York Federal Reserve working for Liberty Street Economics have raised a good point on the lack of clarity that Trump’s prices have offered between contribution and production rates. Production rates are rights imposed on finished products imported into the United States, while entry rates are rights applied to the goods used to complete a finished product at the national level.

Ideally, prices are applied to finished products, which can allow national manufacturers to be more competitive with prices with imported products. However, some of Trump’s prices are targeting goods used to complete the manufacturing of products in the prices of American entries often end up increasing internal manufacturing costs and can increase the inflation rate in force.

The other concern, which relies on the report of the four economists of the New York Fed, is a historic precedent. The authors examined the performance of public companies whose actions had trouble when Trump’s prices were introduced in 2018-2019. On average, companies directly affected by Trump’s porcelain prices during its first mandate at the Oval Office saw their sales, their profits, their employment and their labor productivity decrease from 2019 to 2021.

Although there are many reasons to believe that President Trump’s prices are a real concern for actions, a much more important threat to upset the Haussier market exists.

From the closing bell of August 13, the S & P 500 S&P ratio has closed a multiple of almost 39. With the exception of the Dot-Com bubble and the first week of 2022, it is the third most excited stock market in history, when 154 years.

Although previous historical prelates prelass problems for the stock market, assessments have the capacity to remain prolonged if companies provide strong growth in profits and offer analyst directives.

While many most important companies in the Stock Exchange have gotten into the habit of exceeding the expectations of consensual profits, a dive under the figures reveals how bad the profits is in Wall Street.

Ideally, companies responsible for pushing the wider market higher should let their operational performance speak. But many eminent companies have been supported by unsustainable and / or non -innovative sources of income that partially mask their real operational performance.

One of the most important examples of high -flying actions with the quality of abysmal benefits is Tesla (Nasdaq: tsla). This member of the “Magnificent Seven” is the main manufacturer of electric vehicles (EV) in North America and a company worth 1.1 Billion of dollars, when writing this document.

During the first half of 2025, Tesla generated $ 2.138 billion in income before tax. However, $ 1.649 billion (77.1%) date back to the automotive regulatory credits given to the company free of charge by federal governments and net income of interest (interests gained in less interest paid to debt). “Big and Beautiful Bill” by President Trump will eliminate Tesla automotive regulatory credits in the United States

For a company that should be a market leader, Tesla constantly depended on income sources that have absolutely nothing to do with the sale of electric vehicles and its energy production and storage operations. To start, estimates of action by action (EPS) for future years have been falling with a certain level of consistency for almost three years.

It is a somewhat similar story for the stock of artificial intelligence (AI) PALANTOUT Technologies (Nasdaq: PLTr). The Gotham and Foundry platforms of Gotham and foundry sought by the software and the foundry of Gotham and Foundry in search of Palantir were sought as shift, with annual sales for a year which should increase by 45% in 2025.

But one of the interesting quirks of Palantant is that it generates a considerable percentage of its income before tax from the interests earned on its money. Although I am not lacking in Palanta for having brought in $ 106.7 million in interest in the first six months of 2025, it should be noted that this represents more than 19% of its income before tax.

A company that is assessed at a completely unjustifiable price / sale ratio of 135 should talk about its operational performance. Instead, the P / E ratio of more than 610 months is partially supported by non -innovative interest income earned by its money.

Tesla and Palantant are not unique examples – they are simply among the most important companies. If the quality of profits remains poor or suspect, premium assessments can easily become the fall in the stock market.

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Sean Williams has no position in the actions mentioned. The Motley Fool has positions and recommends Palantant Technologies et Tesla. The Motley Fool has a policy of disclosure.

Forget President Donald Trump’s prices! There is a much more sinister concern for Wall Street. was initially published by the Motley Fool