In this episode of Stocks in Translation, J.P. Morgan Asset Management global marketsStrategist Stephanie Aliaga joins Markets and Data Editor Jared Blikre and Yahoo Finance Anchor Madison Mills to discuss policy uncertainty and how it impacts business decisions, investments, and market stability.

Blikre defines policy uncertainty as the lack or clarity of predictability about government actions such as regulation, taxes, or monetary policy. While the state of the market is impacted by a number of factors, what is happening in Washington D.C. right now contributes to it too. Aliaga shares her perspective on the current state of the market in 2025.

“So far this year we’ve seen, and as a continuation of the last two years, that price momentum and earnings momentum have really been in sync,” Aliaga says. “Markets have traded a bit sideways, but that sideways action really masks what we're seeing underneath the hood, which is quite remarkable; a broadening out which we thought was the focus of or was gonna be the theme of 2025 so far seems to be the case… I think investors are taking the opportunity, particularly given elevated concentration in their portfolios within US growth and US tech, to lean into some of these areas with some wind behind the sails.”

Aliaga also mentions some of the areas causing policy uncertainty that investors are gearing up for, from President Trump’s tariffs to DOGE and deficit spending to the 2025 tax reconciliation bill.

“But I think the way investors are positioning it is quite notable in that leaning into diversification - checking your headlights, checking your breaks in the midst of a storm - how are you protected or potentially can benefit from the way that the chips fall.”

Find this episode's transcripts and more episodes of Stocks in Translation at https://finance.yahoo.com/videos/series/stocks-in-translation/

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Yahoo Finance's Stocks in Translation is hosted by Jared Blikre and Sydnee Fried, and produced by Lauren Pokedoff.

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