The quarter ending March 31, 2025 seems like eons ago. Quick review: S&P 500 stocks was down 4.3%, International (DM) Developed Markets was up 7.0% and US Bonds was up 2.8%. Being well diversified was key in the first quarter of 2025.
The most recent topic is tariffs. The ones the US is imposing and the ones the world is imposing on the US in retaliation. Key thing to know about investment markets is they like certainty. When key economic factors, like the imposing of tariffs, are changing by the minute, markets react negatively.
From LPL Research market commentary…
Markets got quite a surprise from the Trump administration last week in the form of tariffs above even the most aggressive forecasts, increasing the risks to economic growth and corporate profits. China quickly retaliated, Europe may follow with tariffs of their own, and some countries may boycott American goods. Some of these tariffs will be passed along to already inflation-weary consumers in the form of higher prices, which will drag down consumer spending while also putting anticipated Federal Reserve (Fed) rate cuts into question. However, there are some possible silver linings once the dust settles. We’re past peak uncertainty and maybe peak pessimism as well. Tariff rates should go down from here as negotiations begin. Interest rates should head lower as the deficit narrows, bringing borrowing costs down. Oil prices are down sharply. And tax cut extensions will be larger and easier to pass. Long-term investors may want to consider doing a little rebalancing into stocks this week after recent bond market gains. Read more here.
Need help on navigating the current uncertainty? Reach out, we are here to help!
And as always, your weekly market update is here.
