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The U.S. stock market suffered its worst quarter in over two years, with the S&P 500 falling 4.5% and the Nasdaq plunging 10.4% in the first three months of 2025. The Dow Jones Industrial Average fared slightly better but still recorded a 1.3% decline, marking its first back-to-back monthly loss since 2023.
The downturn comes just days before President Donald Trump is set to unveil sweeping new tariffs on Wednesday—an event he has branded “Liberation Day.” Markets have been rattled by uncertainty surrounding the tariffs, with investors fearing retaliatory measures from major U.S. trading partners.
Tech Stocks Lead the Decline
The sell-off was particularly brutal for big tech stocks, with the so-called “Magnificent 7”—Amazon, Apple, Microsoft, Alphabet, Nvidia, Tesla, and Meta—losing a staggering $2 trillion in market value since January.
“The market is pricing in significant uncertainty,” said an analyst at UBS. “Investors are unsure how aggressive Trump’s tariffs will be and what the global response will look like.”
Monday saw the S&P 500 briefly enter correction territory, dipping 10% from its recent high before clawing back some losses by the close. The downturn ends a five-quarter winning streak for the index.
Global Markets Tell a Different Story
While Wall Street struggles, foreign markets have flourished. The Euro Stoxx 600 index, which represents companies across 17 European nations, gained 5% in the first quarter. The U.K.’s FTSE 100 also rose over 5%, while China’s MSCI index surged 16%, fueled by economic stimulus measures and AI sector growth.
Japan, however, was an exception—its stock market tumbled 10%, reflecting fears over declining exports and the impact of Trump’s expected tariffs.
Business Leaders Express Frustration
The uncertainty surrounding the tariffs has left business leaders and investors uneasy. A recent report from S&P Global Market Intelligence found that nearly 900 U.S. companies referenced tariffs in recent earnings calls.
A manufacturing executive, speaking anonymously in a Federal Reserve Bank of Dallas survey, expressed frustration:
“This is truly ridiculous. I have been in business for 50 years, and never have I seen such uncertainty in the market. It is very difficult to plan and make decisions.”
What’s Next for the Market?
Despite the rocky quarter, some analysts believe markets could stabilize once the new tariff details are fully revealed.
“Once tariffs are announced on April 2, negotiations to soften them can begin,” wrote UBS researchers in a note to clients. “Progress toward a budget reconciliation bill could refocus attention on market-positive aspects of the Trump agenda.”
Investors and businesses alike will be watching Trump’s announcement closely on Wednesday, as the details could set the tone for the next quarter in the stock market.
