A lot of growling
The S&P 500 (SP500) turned slightly higher to close Monday in the green, but overall, it was a tough month for stocks and a bruising quarter. President Trump has finally settled on a “country-based” tariff plan, which will be announced as part of “Liberation Day” festivities in the Rose Garden on Wednesday. It’s not the only excitement this week, with macro investors keeping an eye on the non-farm payrolls report on Friday, along with a speech from Federal Reserve Chair Jerome Powell that morning.
Bigger picture: Even before the latest tariff drama heated up, some popular trades were beginning to be unwound. That was especially true for Big Tech and the artificial intelligence boom, which showed no sign of slowing down over the past two years. The rally really got ahead of itself in the aftermath of the 2024 presidential election, when many asset classes turned on their nitrous burners, so it may not come as such a surprise that a pullback was in the cards.
It also hit the Magnificent 7, whose heavy weighting represents about a third of the benchmark S&P 500 Index. Apple (AAPL) and Microsoft (MSFT) began faltering in December, while Tesla (TSLA) joined the downtrend that month as well. Nvidia’s (NVDA) last all-time high also came on Jan. 6, which was several weeks before the DeepSeek selloff. Amazon (AMZN), Meta (META) and Alphabet (GOOGL) would later experience a blowout in early February, but before the broader market began a descent into correction territory and terms like “recession” and “stagflation” were making their rounds in the headlines. See movement since the last highs
Outlook: The jury is still out over the timing of a recovery, but other asset classes are doing well in the meantime. Gold and other metals are notching new records, while sectors like healthcare, utilities, financials, and consumer staples also inked gains during the first quarter of the year. Still worried about direction and volatility? Check out the SWAN (Sleep Well At Night) strategy from SA Investing Group Leader Financially Free Investor.
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