There have been ups and downs, however over time America’s S&P 500 has proved itself a prime vacation spot for traders in search of super returns.

Since 2010, the share index has delivered a median annual return of virtually 14%. Returns throughout this time have been supercharged by its massive contingent of high-growth tech shares like Nvidia, Microsoft and Tesla.

However doubts are creeping in as as to whether the S&P 500 can preserve its document. This follows plans by US President Donald Trump to impose doubtlessly crushing commerce tariffs on main buying and selling companions.

What does this imply for traders?

Stark warning

Scanning the monetary pages this morning (17 February), I used to be drawn to an interview with Nobel prize-winning economist Joseph Stiglitz.

Discussing potential US tariffs and reciprocal taxes from commerce companions, he mentioned that “it risks the worst of all possible worlds: a kind of stagflation.”

Stiglitz mentioned that uncertainty associated to Trump’s commerce plans would sluggish financial development, whereas new tariffs might additionally push up prices for enterprise and customers.

He commented that “how a lot it’ll enhance costs is a bit of bit affected by the magnitude of the appreciation of the change charge, however all economists suppose that the extent of the appreciation of the change charge gained’t be wherever close to sufficient to compensate for the tariffs.“

Don’t panic but

Buyers should be further cautious on this local weather. Nevertheless, I really feel there’s additionally no want for them to panic.

First, there’s no assure that new commerce guidelines will come into place. Trump’s choice to delay tariffs on Mexico and Canada final month signifies room for manoeuvre.

There’s one other essential factor to recollect. Whereas economists like Stiglitz deserve consideration, we’ve seen many occasions earlier than that predictions of doom and gloom might be overstated.

So, is the S&P 500 nonetheless a pretty place to think about investing? I feel so, which is why I plan to proceed holding US shares, trusts and funds.

Spreading threat

Whereas the outlook is extra unsure as we speak, there are nonetheless good causes to anticipate S&P shares to outperform over the long run. These embody:

• The robustness of the US financial system.
• Additional fast development within the digital financial system that powers tech income.
• Dominance by S&P 500 firms in main sectors like healthcare, finance and know-how.
• The S&P’s massive international footprint offering added earnings alternatives.

It’s additionally essential to recollect the robustness of the US inventory market over time. Since its inception in 1957, the S&P 500 has overcome a number of crises — together with wars, recessions, pandemics and political turmoil — and has hit new document highs in 2025 regardless of tariff worries.

Nevertheless, cautious traders might want to contemplate shopping for an index-tracking exchange-traded fund (ETF) in addition to buying particular person shares as we speak. The HSBC S&P 500 ETF (LSE:HSPX) is one I maintain in my very own portfolio.

By investing in a whole lot of various firms, the fund helps traders handle a low-growth state of affairs by holdings in cyclical and non-cyclical companies. It additionally consists of industries which can be much less weak to inflationary pressures, like shopper staples and healthcare.

Lastly, the fund limits publicity to sectors that might be straight impacted to a big diploma by commerce tariffs, such because the automotive business and agriculture.

This HSBC product isn’t resistant to financial volatility. However over the long run, I nonetheless imagine it might proceed delivering glorious returns.