S&P 500 (^gspc) has just seen your worst week since Covid-19 stopped the world economy in March 2020.
The Benchmark Index fell approximately 9% between March 31 and April 4 at tariffs. Similarly, as the pandemic spread to the United States, the shares lost 12.5% in five trade sessions in 2020, but market experts say that stock recovery will look different this time.
While the S&P 500 returned to record maximum four months after the pandemic crash, experts do not think investors should expect such a quick return in 2025.
“At that moment, you are beyond the history of records,” Renaissance Economy Nail Duta told Yahoo Finance. “This is a shock of confidence and so it will take some time to return it.”
The recent shock for the markets comes from President Trump himself. With the expected tariffs to reach their highest level in a century, consumers and businesses feel more over than the trajectory of the American economy. This has also shook investor confidence, failing many recent offers in recent days to gather from the market bottom.
The biggest difference between this shock and the one who came with the pandemic is that this time the president has a potential switch “off” for chaos. But at that moment, Trump showed a few signs of retreat.
“We need to see some evidence of some negotiations very, very quickly,” Fundstrat’s global head of Mark Newton’s technical strategy told Yahoo Finance on Tuesday when discussing what the free fall can stop.
The recent sale of the market is run by fears that Trump’s tariffs can stop US economic growth. Some claim that they could even bring a recession.
In previous periods, like the pandemic, when economic growth slowed down, the Federal Reserve reduced interest rates. This time, a Fed is expected to come to the rescue immediately.
Tariffs are expected to slow down growth but also increase inflation. With the markets that divert last Friday against the backdrop of a two -day 11% sale in the S&P 500, Fed President Jerome Powell said it was “too early to say what the appropriate response to the monetary policy of these new policies will be.”
Markets move with any increase in the tariff title as investors are trying to appreciate their impact. But for the business, the process is not so easy. The decision on how to work with 54% export tariffs from China, just to turn 104% of rates a few days later, provides an additional cloud of uncertainty that can slow down corporate investment.