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Wall Street stocks recorded the worst quarter in almost three years, fearing that Donald Trump’s tariffs would lead to male dog periods in the world’s largest economy.
The S&P 500 fell 4.6% in the first three months of 2025. This is the worst performance since the third quarter of 2022, FactSet data shows. The Blue Chip Index rose 0.6% on Monday.
The sharp pullback in the first quarter comes as Wall Street banks and investors worry that collections from Trump’s trading partners will slow economic growth and raise prices. Feelings between consumers and businesses have also been cooled down sharply, several recent studies have shown.
Investors are supporting themselves for Trump’s “liberation day” event on Wednesday, where the US president is expected to announce fresh tariffs in addition to existing taxes on imports of goods such as steel and aluminum.
“We are pleased to announce that Jesse Mark, global head of equity capital markets at US Bank Jeffries,” said: “It feels very self-harmed.”
Sharon Bell, senior equity strategist at Goldman Sachs, added:
Over the weekend, Goldman raised its year-end forecasts for inflation that policymakers had closely monitored, warning that it saw a chance of 20% to 35% of the US recession next year.
The tariff threat “will raise the risk premium you place on your stock,” Bell said, but she added that there are “other issues” in the US stock market, including slower pace of growth and reduced public sector.
Big tech stocks, which dominate the market in recent years, drew sharply back in the first quarter, with NASDAQ Composite sliding 10.4%. Stocks were worried that the boom in spending on artificial intelligence infrastructure would be overdone as they face growing concerns about the economy.
Nvidia, which manufactures high-end chips that AI groups use widely to train models, fell almost to fifth in the first quarter. Elon Musk’s electric car maker Tesla plummeted 36%. The industry giant has dropped Apple and Microsoft by about 10%.
Consumer businesses and other economically sensitive stocks also drew back sharply. Nike sold 16% after the group said the trade war and consumer attention complicate efforts to boost sales as part of the turnaround. FedEx has dropped 13% after cutting its profit forecast for 2025 and warning of “continued weakness and uncertainty in the US industrial economy.”
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European stocks surpassed the US in a significant shift from 2023 and 2024 when Wall Street passed its rivals. The London FTSE 100 and the European Stoxx 600 won around 5% in local currency terms.
Asian markets mixed in the quarter, with Japan’s Topix sliding 4.5% and China’s CSI 300 slipping 1.2%, while Hong Kong’s Hansen jumped 15% and South Korea’s Kospi rose 3.4%.
Traders revolved in Haven in early 2024. Gold reached a fresh record of $3,128 for the Troy ounce. Inversely proportional to price, the US Treasury yield for 2010 fell to 4.21% from 4.57% at the end of 2024.
“It’s the overall (that is) uncertainty that emphasizes investor sentiment,” said Charles de Boissezon, global head of equity strategy at Société Générale. “While the (customer) announcements continue to change, what they have in common is that (they) are not suited to growing globally.”
