The new year is off to a brisk start, and January has already delivered signs that 2026 may diverge meaningfully from last year’s narrow, tech‑driven rally. Value stocks are leading the way so far, while policy developments from the Trump Administration continue to shape economic headlines. Although it’s still early, we’re closely watching a clear shift in market dynamics to begin to take hold. 

As we embark on 2026, we at Carnegie reflect on a resilient 2025 that saw the S&P 500 deliver solid gains amid headwinds such as tariffs and government budget cutbacks. The market tested many investors through sharp headlines portraying market news and pullbacks as dramatic declines, such as "Dow plummets 500 points," often representing less than 1% moves.  

Our take? Headline-driven commentary is designed to elicit an emotional response (to drive clicks!), but it is often the best time to remember your time horizon. Over longer horizons of 1, 5, or 10 years, these fluctuations pale in comparison to the power of compounding in quality investments. At Carnegie, we remain focused on identifying continual compounders striving to build wealth steadily through economic cycles. 

As we enter 2026, maintaining discipline amid noise remains key, emphasizing long-term horizons over reactionary moves. Below, we share a few larger themes we are watching as we turn the page on 2025. 

“Uncertainty” is the new buzzword. The term has been used repeatedly during earnings calls throughout the past month as company executives described the current state of the operating environment. This uncertainty is driven by the Trump Administration’s fluctuating tariff policy.

What We're Watching in April 2025

Tariffs: A Familiar Headwind with New Implications

Tariffs are once again making headlines — and history offers important perspectives. In 2018, during the first Trump administration, when tariffs were first introduced on a wide scale, markets reacted with caution but quickly digested the implementation once the total amount was clearly defined. Today, a similar narrative is unfolding, though this time the effects are more pronounced — not because tariffs have been enacted, but because of the uncertainty on the final outcome this past month.

The current on-again/off-again conversation about tariffs on imported goods is not new. In fact, before the general income tax was passed in 1913, tariffs were one of the few ways our government had to raise money, often comprising up to 95% of federal revenue. To some extent, tariffs in the developing American economy were part of the rivalry between the agricultural-based economy of the South and the developing industrial-based economy of the North. Some historians have pointed to the Tariff of 1828 (called The Tariff of Abominations), meant to aid small Northern industry, as the starting point for talk of Southern secession, eventually leading up to the Civil War. 

Recently, Carnegie Investment Counsel Portfolio Manager/Regional Director Scott Inglis was a guest of Behind the Numbers, which is a podcast about the “real stories” behind business performance and valuation. Inglis talked with the host, valuation expert and bestselling author Dave Bookbinder. Scott provided detailed insights around demystifying noise in the market place”. Here’s an overview of the conversation.

The U.S. rejoined the 197-nation Paris Climate Accord. Under the accord, the U.S. has committed to reducing greenhouse gas emissions by 50% of 2003 levels. President Biden has also stated that his administration wishes to move the U.S. to net zero emissions by 2050.

There is a great deal of trepidation about the potential economic consequences surrounding this matter. The concern is that it will require a lowering of consumption in the U.S. and even our standard of life.

If these targets are not just posturing but serious goals, they may portend both large government spending and tax incentives. Rejoining the Paris Climate Accord may signify a historical capital spending boom by both government and private businesses.