We have been talking with clients about the increased market movements we've been experiencing in 2025, which has largely been fueled by evolving policy shifts. Yesterday's announcement of a new 10% baseline tariff contributed to one of the largest single-day market declines since 2022, with the Dow dropping approximately 1,400 points. The current trade and tariff scenarios are still unfolding, and the market is responding to the uncertainty.
In our Q1 outlook, we noted that 2025 would likely bring a "buckle up" year with more market swings ahead, and Q1 proved to be just that. The long-term economic impacts of these new tariffs remains unclear, but we do know that tariffs tend to increase inflation and decrease growth. With that in mind, the Fed has already priced in rate cuts for the end of this year, anticipating an economic slow down. While tariffs will continue to create volatility, investors should remain focused on overall strategic goals and diversification rather than reacting to short-term news.
Our investment partners at BlackRock share this view, noting that despite headlines about tariffs, the fundamentals of the U.S. economy remain resilient:
As we navigate this evolving market environment, a few important reminders:
If you have any questions about how recent market movements might impact your specific financial situation, please don't hesitate to reach out to our Client Service Manager, Becka, to schedule some time to chat with your Advisor. We're here to help you navigate this market cycle with confidence.