Looking Back
How Did Markets Perform Last Quarter?
S&P 500
-4.6%
-4.6%
The broad market index logged its worst quarter since 2022.1
NASDAQ
-10.4%
-10.4%
The tech-focused NASDAQ plummeted as investors turned pessimistic.2
DOW 30
-1.3%
-1.3%
The blue-chip Dow fell as tariff fears bruised stocks.1
Looking Ahead
What factors may influence markets in the months to come?
We may be facing economic headwinds in the second quarter, and markets are likely to remain volatile as investors digest news and look for clarity. Let's take a look ahead at some of the factors that we'll be watching in the weeks and months ahead.
Tariffs
Jittery investors worry that tariffs could kick off a trade war that raises prices for Americans and hurts demand for U.S. goods. A more moderate trade policy may give markets a boost; uncertainty is likely to drive markets lower.2
Economic Data
Investors will be closely watching reports on inflation, consumer spending, and other indicators to gauge how tariffs are impacting different sectors of the economy.
Recession Indicators
Many economic fundamentals remain strong, but recession risks are rising. A growing number of analysts believe economic growth may contract in 2025, so we'll be watching the data closely.4
Interest Rates
Analysts currently expect the Federal Reserve to lower interest rates again in 2025. However, if inflation remains at its current level or increases, the case for lower rates may weaken, which could cause markets to pull back.5
Watch as the Chief Marketing Strategist and the Client Service Director of SEI review the financial markets for the first quarter.
"A bumpy path may lie ahead for markets."
"A bumpy path may lie ahead for markets."
Bottom Line
Key Takeaways for Savvy Investors
What conclusions should we draw from a rocky first quarter of 2025?
Markets hate uncertainty. And more may lie ahead.
Tariffs and policy drove much of the volatility in Q1; while we're hoping for more clarity and moderation as tariff policies are enacted, we're prepared for volatility and pullbacks.
Will we still see a recession in 2025?
Economic risks are rising and a recession may be on the horizon.4
Analysts worry that tariffs may cause higher prices, which might cause cautious consumers to close their wallets.
Businesses impacted by tariffs could cut expenses and rein in investments, potentially causing the job market to cool.
The Federal Reserve has the ability to lower interest rates to encourage business activity, though it's possible higher inflation may keep the Fed on the sidelines.
But the news ahead isn't all bad, and a recession isn't guaranteed.
Recent market declines have reduced valuations, offering potential opportunities to those who look for them.
Many of the hardest-hit sectors are the ones that rose highest during the tech-driven run-up of the last two years.6
Companies that depend on domestic demand may be more insulated from the impact of tariffs than those with international sales exposure.
Bottom line: we're watching the data closely and staying flexible amid the uncertainty.
Questions about markets or your portfolio? Please reach out. I'd be happy to chat.
Mahesh Odhrani, CFP®, ChFC®, AIF®, CPFA®
Strategic Wealth Design
Sources:
- CNBC, 2025 [URL: https://www.cnbc.com/2025/03/31/stock-market-today-live-updates.html]
- NBC News, 2025 [URL: https://www.nbcnews.com/business/markets/stocks-close-worst-quarter-2022-tariff-uncertainty-rcna198956]
- AP News, 2025 [URL: https://apnews.com/article/trump-tariffs-china-trade-4e130e740f3955feccec226d6c0084d9]
- WSJ, 2025 [URL: https://www.wsj.com/economy/in-matter-of-days-outlook-shifts-from-solid-growth-to-recession-risk-027eb2b4]
- AP News, 2025 [URL: https://apnews.com/article/fed-federal-reserve-rates-trump-tariffs-inflation-prices-a9008f1bb081093cd149967e3e637c7b]
- CNBC, 2025 [URL: https://www.cnbc.com/2025/03/10/nvidia-down-30percent-from-high-as-tech-led-sell-off-hits-magnificent-seven.html}
The S&P 500 is a stock index considered to be representative of the U.S. stock market in general. The NASDAQ Composite Index is an unmanaged composite index of over 2,500 common equities listed on the NASDAQ stock exchange. The Dow Jones Industrial Average is a price-weighted index that tracks 30 large, publicly traded American companies.
All index returns exclude reinvested dividends and interest. Indices are unmanaged and cannot be invested into directly.
Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Strategic Wealth Design and Cambridge are not affiliated. SEI and Cambridge are not affiliated.