Global Market Volatility Rises Ahead of Trump’s Tariff Plan:
A new wave of volatility swept through global markets just days before U.S. President Donald Trump announced new tariffs.
Meanwhile, stock indexes began recovering recent losses in a quarter marked by significant tension.
As equities rebounded, bonds retreated from session highs, and gold continued its rally, hitting record levels.

Contents

Diverging Global Market Performance

New Tariff Concerns

U.S. Market Performance

Mounting Economic Fears

Weak Earnings

Warning Indicators
Attempting to Read Market Direction

Diverging Global Market Performance Amid Political and Economic Uncertainty

From New York to London and Tokyo, markets saw sharp swings.
The S&P 500 recovered a 1.7% drop, while U.S. stocks posted their worst quarterly performance since 2022.
Defensive sectors led Monday’s gains, while energy stocks rose
with oil prices after Trump hinted at a possible cut in crude oil shipments from Russia.
However, major corporations remained under pressure.
For the first time since the pandemic began in March 2020,
bonds rose while equities declined over a single quarter.
Meanwhile, the U.S. dollar—historically a haven—had its weakest start since 2017.

New Tariff Concerns Stir Market Anxiety

Conflicting messages from Trump’s administration regarding upcoming tariffs
set to be announced Wednesday—have unsettled traders,
who view them as the most significant market threat in years.
Trump is expected to reveal his decisions during a White House Rose Garden event.
The announcement will likely include country-specific tariffs, with sector-based tariffs to follow.
Chris Larkin from E*TRADE, a Morgan Stanley company,
noted that these tariffs will remain a key topic in market discussions.
Whether the tariffs are harsher or lighter than expected,
they are expected to influence near-term market momentum significantly.

U.S. Market Performance

The S&P 500 rose 0.6%, the Nasdaq 100 showed little change, and the Dow Jones climbed 1%.
Tesla and Nvidia led losses among mega-cap companies, while Apple shares rose.
Newsmax surged in its first trading session.
In contrast, vaccine-related stocks dropped following the resignation of a senior U.S. FDA official.
On the bond front, the 10-year U.S. Treasury yield dropped by three basis points to 4.22%.
The Bloomberg Dollar Spot Index climbed 0.2%, and gold surpassed $3,100 for the first time.

Mounting Concerns Over Economic Slowdown

Trump’s trade war escalation reignited fears of a potential economic slowdown.
While most economists still don’t foresee a full recession in the U.S. this year, the chances have increased.
Economists also warn of a “stagflation” scenario—where economic growth slows while inflation accelerates.

John Williams, President of the New York Federal Reserve, told Yahoo Finance that inflation could rise this year,
although he expects it to remain relatively stable.
In this environment, David Kostin of Goldman Sachs downgraded
his S&P 500 target to 5,700 points from his previous estimate of 6,200,
citing deteriorating investor confidence and weaker growth expectations.
Kostin wrote: “We continue to advise investors to wait for an improvement in the growth outlook,
further market dislocations, or reduced positioning before re-entering at market lows.”

Weak Earnings and Unattractive Valuations

Keith Lerner of Truist Advisory Services noted that earnings projections will likely be downgraded due to weaker economic conditions,
even as valuations improve—though they remain unattractive.
He advised investors to adopt a more neutral and less aggressive approach,
given the mixed risk/reward environment.
“We expect ongoing market volatility in the coming weeks,
and a quick return to record highs appears unlikely,” he added.

Warning Indicators from the Stock Market

Recent market behavior sends a clear warning to investors hoping for a swift rebound.
According to analyst Jim Paulsen, the correlation between individual S&P 500 stocks
indicates how they move in tandem—has dropped to one of its lowest levels in 25 years.
Paulsen, who has held roles at Leuthold Group and Wells Fargo,
stated that the market hasn’t yet reached a point of “full capitulation,”
adding that stock correlation is a key indicator of whether markets are ready for the next bullish phase.

Attempting to Read Market Direction

Stock traders focus on technical charts to gauge the next market direction
amid intensifying concerns over trade uncertainty and slowing growth.
The S&P 500 briefly dipped below a key support level of 5,504.65
The intraday low was recorded on March 13 before bouncing back above it.
The question now is whether it can maintain that level.
Technical analysts advise watching market breadth for signs of “total capitulation.”
Adam Turnquist, Chief Technical Strategist at LPL Financial,
said that a drop below 10% in the number of stocks trading above their 20-day
moving average would be a strong sign of market bottoming.

Global Market Volatility Rises Ahead of Trump’s Tariff Plan

Global Market Volatility Rises Ahead of Trump’s Tariff Plan

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