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In a fitting end to a rocky first quarter, US stocks fell back into correction territory Monday.
The S&P 500 was trading 0.2% lower at 2 pm ET, putting it around 4.8% in the red since the start of 2025. The tech-heavy Nasdaq Composite is slated to close out Q1 almost 12% lower.
It’s the worst first quarter performance for the Nasdaq Composite since 2020.
One silver lining in Q1: gold. The precious metal is about to notch its best-performing quarter since 1986. Analysts attribute the rally to the Trump tariff-induced trade war. (More on that later.)
Digital gold, though, is a different story. Bitcoin is slated to close out its worst Q1 since 2018. The narrative of bitcoin as a safe-haven asset, apparently, has not taken.
Looking ahead, things could get worse before they get better.
Tariffs are set to remain a dominant market narrative in Q2. President Trump is slated to announce his global tariff plans on Wednesday, which he’s dubbed “Liberation Day.”
To Team Trump, April 2 will mark a turning point for domestic manufacturing. To some analysts, “Liberation Day” could also bring salvation to US equity prices (at least in the short term).
The logic goes: If Trump announces a comprehensive reciprocal tariff regime, investors will gain clarity. Hopefully the daily headlines will slow down and markets can stop wondering whether a levy will be delayed or amended. Concrete answers on the tariff front would leave investors free to focus on impacts of other Trump administration economic policies, like tax cuts.
In the long term, I’m less optimistic. Even Trump’s closest Cabinet members reportedly aren’t fully up-to-speed on what the president will say on Wednesday, so I’d imagine markets will also be shocked. If the announcements lead to a significant escalation in the trade war, any “clarity” bump will quickly be reversed.
I’d also argue that these reciprocal tariffs are not priced-in, so expect some short-term volatility later in the week as investors digest the announcements from the White House.
OK, I’m putting the crystal ball down now. Keep an eye on your inbox later this week to see how my predictions hold up.