It’ll all work out ok in the end.

That’s how US equities — which powered to more new records on Monday — seem inclined to view the outlook both for corporate profits and the US economy in the face of what it’s entirely fair to call abject f-cking chaos, both at home and abroad.

As discussed here, stocks have stopped caring about Donald Trump’s tariff pronouncements, and although I don’t blame them (the stocks) I do have questions about the juxtaposition between, on one hand, exponentially higher import taxes on goods destined for the world’s largest consumer market and, on the other, relatively rosy expectations for earnings growth and sanguine views on the broader US economy.

The figure on the left below, from Goldman, shows you the sharp upward inflection for consensus earnings revision breadth, which David Kostin noted is now sitting at its most bullish levels in nearly three years. “Despite consensus expectations for just 4% YoY EPS growth in Q2, earnings revision breadth shows a widespread recent improvement in analysts’ forecasts for 2026 EPS,” he remarked.

The figure on the right depicts a near 90-degree inflection in equity market-implied growth pricing, and you’ll note that it comes on the heels of a similarly vertical repricing off the post-“Liberation Day” nadir.

As Kostin went on to write, editorializing around the chart, the bank’s Cyclicals versus Defensives basket “appears to be pricing a real US GDP growth outlook above our economists’ forecast of 0.8% in H2 2025 but close to their 2H 2026 forecast of 2%.”

If the bull case was predicated on multiple expansion (i.e., on top of what many already describe as a market that’s “priced to perfection” at ~22x), buybacks, a continuation of the AI fever dream and an economy that manages to muddle through despite myriad headwinds, I wouldn’t necessarily take issue with it. That’s my “base case,” if you can call it that.

But I’m genuinely skeptical of the idea that the “Trump 2.0” policy mix is in fact pro-growth. Whatever you want to say about demand-side stimulus (e.g., it can be inflationary) we know it works to bolster nominal GDP, and corporate America operates in the nominal world. Supply-side stimulus, on the other hand, relies on a whole host of largely unproven, and in some cases counter-intuitive, assumptions.

The only sure-fire way to generate a sugar high in a consumption-heavy economy is to put money in the hands of the people with the highest marginal propensity to consume. Supply-side stimulus doesn’t do that. It puts money in the hands of people who, because they have enough money as it is, are inclined to save more out of every incremental dollar they get.

On the bright side for stocks, supply-side stimulus is conducive to buybacks which “boost” earnings by reducing the float. And Trump’s going to get his rate cuts come hell or high water. Artificially-inflated bottom lines and higher valuations courtesy of lower rates can be a helluva combination. If that’s the bet, it’s probably not a bad one.

If, however, the bet is that Trump’s policy mix is going to result in healthy, broad-based economic growth which accrues equitably and organically to the bottom lines of corporates big, small and in-between, color me skeptical.