Recession Talk and Tariffs Just Killed America’s Post-Election Optimism and Rally — Here’s What To Know

Barstool Sports’ Dave Portnoy says that “Stocks only go up,” but not even he’s sure that’s true these days. Retail investors like Portnoy, plus thousands of hazy-eyed analysts on Wall Street, have spent recent weeks pumping up the value of stocks in reaction to Donald Trump’s return to the White House. But as the first quarter draws to a close, those markets have given back those gains — and there’s no telling if the floor is in.

Making Stocks Cheap Again (MSCA): Investors were originally excited about a row of deregulation and domestic reshoring across industries, but as tariffs went into effect on Tuesday, they could only find reasons to worry. Over the last week, a row of bad economic data, waning GDP forecasts, and anticipation of retaliatory tariffs reignited recession worries and saw America’s largest index book its worst losses of the year. And matters are only worsening as the index gives back all of the Trump Bump.

• The fallout squandered a $3.4T rally, which saw the S&P 500 balloon more than 6% from Nov. 5 to all-time highs on Feb. 19 — it’s now back where it was on Nov. 5.
• The sentiment on the CNN Business Fear & Greed Index fell into “Extreme Fear” territory, denoting that the market is in pullback mode.

Is anywhere safe?

As America’s actions threaten to kick off a trade war under the guise of balancing global trade, nowhere feels like a sure refuge. The hardest hits in the US markets are speculative “bro trades,” tech stocks (the Nasdaq entered a technical correction), and crypto, which erased all of its gains from Monday’s stockpile announcement. Overseas, the effects are being felt, too.

• Almost all global indices were down, including the UK’s FTSE 100 (-1.27%), Japan’s Nikkei 225 (-1.2%), and Hong Kong’s Hang Seng index (-0.28%).
• Even the STOXX Europe 600, which popped to start the week on an announcement that the EU would invest more than $840B in defense spending, fell 2.14% today.

Seeking a deal (for the trading war): A downturn in American stocks had been foreseen by increasingly skeptical analysts for weeks, with some recommending the refuge of expensive but faster-growing large-cap tech stocks in the Nasdaq-100 for safety this year. Others have optioned to send their cash abroad in search of more favorable valuations in Asia and Europe, which might be insulated from some of America’s trade decision-making. But for the extremely risk-averse, surer things could await in safe havens like gold, US treasuries, or cash — all possible landing spots in the event of a protracted downturn. Still, reacting impulsively to market swings can be costly. Careful evaluation of investment opportunities is critical, especially during volatile times when economic policies and global shifts can change quickly.