The S&P 500 faced a sharp pullback after President Trump's China tariff threats, sparking profit-taking and heightened volatility.
Tariff concerns center on China's rare earth dominance and potential impacts, including on key sectors like semiconductors and technology.
Despite elevated valuations, strong earnings and robust fundamentals - especially from the Magnificent Seven - support the ongoing rally beyond mere multiple expansion.
Investors should avoid capitulating to bearish sentiment, add positions gradually, and watch the S&P 500's 20-period moving average as a key support level.
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