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Bear Market
Business Cycle
Risks
Bull Market
Fixed Income
Inflation
Equities
Diversification
Interest Rates
Opportunities
Geopolitics
Market Catalysts
Market Decode™
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[Ariana Chiu speaking on camera throughout]
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Please see important information at the end of this program. Recorded on 4/14/2026.
On screen copy:
Ariana Chiu
Investment strategist
Chief Investment Office
Merrill and Bank of America Private Bank
If you've been watching U.S. equities over the last year, it's fair to ask a simple question: how has this market held together?
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Recent market stressors:
- Geopolitical shock
- Policy uncertainty
- Supply chain stress
We've had geopolitical shocks, policy uncertainty, supply chain stress, and a constant stream of headlines warning that the next shoe is about to drop. And yet, U.S. equities have continued to show resilience. That strength isn't accidental. It reflects a market that has absorbed real stress historically, recovered, and continues to adapt even as new risks come into focus.
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Liberation Day: On April 2, 2025, the U.S. enacted a range of tariffs on nearly all imported goods.
A good place to see that resilience in action is by looking back at Liberation Day. Twelve months ago, tariffs upended decades of global trade, markets sold off sharply, volatility spiked, and recession fears surged.
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The S&P 500 hit a trough on April 8, 2025, but surpassed Liberation Day's level 17 trading days later.
Past performance is no guarantee of future results.
But the damage didn't last. U.S. equities rebounded at a historically fast pace, corporate margins held up, and earnings growth stayed surprisingly strong. Instead of breaking, corporate America adjusted — rerouting supply chains, managing costs, and leaning on pricing power. It was a reminder that shocks don't have to derail U.S. equities; often, they simply force recalibration.
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Potential equity market vulnerabilities:
- K-shaped consumer spending
- Sticky inflation
- Private credit dynamics
That said, strength doesn't mean there are no vulnerabilities. Consumption is still bifurcated, and a meaningful hit to high-income consumers is a tail risk to watch. Inflation remains sticky and now faces additional pressure on the energy front. Evolving dynamics within private credit remain on our watchlist, as does lingering tariff uncertainty.
On the other hand: Artificial intelligence is accelerating economic change at a pace we haven't seen before, shortening the lifespan of some business models while creating entirely new ones. That churn can look destabilizing, especially at the company level.
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U.S. potential advantages amid AI change:
- Deep capital markets
- High business formation
- Adaptive index structure
- Entrepreneurial DNA
But at the market level, it plays to a longstanding U.S. advantage: deep capital markets, high business formation, and an index structure that has naturally shed losers and incorporated new leaders over time.
There are still storms to watch — geopolitics, supply chains, uneven adoption of new technologies. But the bigger picture hasn't changed. U.S. equities have remained strong over time not because risks are absent, but because the market has absorbed shocks, adapted, and moved forward. The calm isn't complacency — it's resilience. And that's the Market Decode.
On screen disclosures:
IMPORTANT DISCLOSURES
The opinions expressed are as of 4/14/2026 and are subject to change.
Investing involves risk, including the possible loss of principal. Past performance is no guarantee of future results.
Asset allocation, diversification, and rebalancing do not ensure a profit or protect against loss in declining markets.
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[End of transcript]
U.S. Equities have faced a steady stream of challenges over the past year, from trade disruptions and policy uncertainty to rapid technological change. Yet despite a brief movement into correction territory — a decline of between 10% and 20% from a recent peak — in March for two of the three major stock indexes,Footnote 1 driven by concerns over the economic effects of the Middle East conflict, the market has held up. By mid-April, most of those losses had been recouped. That resilience reflects an ability to absorb shocks, adjust business models and recalibrate expectations rather than break under pressure.
In the video above, Ariana Chiu, investment strategist for the Chief Investment Office for Merrill and Bank of America Private Bank, explains why adaptability is a key reason that U.S. equities have remained resilient over the long term. "Time and again, companies have shown they can absorb stress, adjust quickly and keep moving forward," says Chiu. She points to shifts in supply chains, cost management and innovation as drivers of the market's recent sturdiness, even as risks persist.