US stocks are facing their worst first-quarter slump in years due to President Donald Trump’s tariffs, which are set to go into effect this week. The benchmark S&P 500 index has dropped 4.6% for the year, its worst start since 2022 and its worst quarter since September 2022.
Trump’s tariff proposals have kept investors in a cloud of uncertainty, with market strategists revising down their forecasts for US stocks amid heightened concerns about the impact on the US economy. Analysts at Goldman Sachs lowered their year-end target for the S&P 500 to 5,700 from 6,200, while those at Barclays and UBS have also reduced their targets.
The economy faces a growing risk of recession as tariffs could hinder growth, increase unemployment and contribute to inflation. The US dollar index is down almost 4% this year, its worst start to any year since 2016. Oil prices surged after Trump announced secondary tariffs on “all oil coming out of Russia,” while gold hit a fresh record high.
Global markets are also feeling the effects, with Japan’s benchmark Nikkei 225 tumbling more than 4%, Taiwan’s benchmark index falling 4.2%, and Germany’s DAX index sinking 1.5%. The Cboe Volatility Index, or VIX, surged higher on Monday morning as traders expressed “extreme fear” about the uncertainty surrounding Trump’s tariffs.
“We’re going to get an announcement and we’re still not going to have clarity,” said Thomas Martin, a senior portfolio manager at Globalt Investments. “And I think that’s the main thing we’re going to be living with for a while.”
Source: https://edition.cnn.com/2025/03/31/investing/us-stocks-trump-tariff-uncertainty/index.html