• Recent market instability was caused by fears instead of legitimate negative issues, experts say
• The most important economic indicators point to strong growth in the stock market and economy
• Investors might look forward to a better second half of the year

The biggest part of the volatility in stock markets during the first half of this year stemmed from concerns over a possible trade war between the US and China because of President Trump’s hardline attitude toward Chinese investments in US businesses, according to some experts.

This led to a large correction in the US stock market earlier this year and ongoing volatility.

Some analysts have been positive about the possibility of avoiding an all-out trade war, and this seems even more likely now.

Trump initially wanted to ban companies that have 25% or more Chinese ownership from investing in American firms with “industrially significant technology”. Recent reports, however, revealed that he has abandoned that idea and is now allowing a new law to be submitted to Congress that will improve the present review process governing foreign investments in US companies.

Some analysts expect the stock market to be less volatile during the second half of 2018 because of this softer stance on trade. Nasdaq, the Dow Jones Industrial Index, and the S&P 500 could all record double-digit growth this year.

Several economic indicators are pointing to a strong stock market and continued economic growth. The main one is the housing market, which has a huge impact on many aspects of the US economy.
A growing, healthy housing market could inspire other major purchases, including appliances, furniture, home improvements and similar housing-related spending. This would have a positive impact on the stock market and the economy as a whole.