Stocks have never fallen since 2020. Their recovery may be different this time.
The S&P 500 (^GSPC) has just seen its worst week since Covid-19 stopped the world economy in March 2020.
Between March 31 and April 4, the benchmark index fell by about 9%, a sold-out tariff. Similarly, stocks lost 12.5% of five transactions in 2020 as the pandemic spread across the United States. But market experts say the stock’s earnings look different this time.
While the S&P 500 has returned to its record high just four months after the pandemic collapse, experts believe investors should not expect a comeback in 2025 so quickly.
“At this point, you go beyond the quick rebound story,” Renaissance economics director Neil Dutta told Yahoo Finance. “It’s a confident shock, so it takes a little time to come back.”
The recent shock to the market comes from President Trump himself. Consumers and businesses feel worse about the trajectory of the U.S. economy, as tariffs are expected to reach their highest levels in a century. This has also aroused the confidence of investors. In recent days, there have been multiple bids that have failed the bottom of the market.
The biggest difference between this shock and the shock of the pandemic is that there is a potential “close” switch this time this time the presidential chaos. But at this point, Trump shows little sign of surrender.
“We need to see some evidence of negotiations very, very quickly,” Fundstrat’s global head of technology strategy told Yahoo Finance on Tuesday.
The recent market sell-off was driven by concerns that Trump’s tariffs could stop U.S. economic growth. Some people think they can even bring about recession.
In the early stages, like the pandemic, the Fed cut interest rates when economic growth slowed. This time, the Fed does not expect immediate rescue.
Tariffs are expected to slow growth, but also increase inflation. On Friday, as the market sold out two days of 11% in the S&P 500 S&P 500 sold out, Fed Chairman Jerome Powell said, “It’s also too early to say what the appropriate monetary policy is reacting to these new policies.”
The market has been shifting on every incremental tariff headline as investors try to price on their influence. But for enterprises, this process is not easy. Deciding how to operate at 54% Chinese export tariffs that will only turn it into a 104% tariff in a few days, provides an additional cloud of uncertainty that could slow down corporate investments.
