Markets have entered a turbulent stretch, with investor anxiety reaching the highest level in five years.1 The recent surge in volatility follows a wave of aggressive new tariffs, reigniting fears about inflation, recession, and global instability. While headlines can be unsettling, it’s important to remember that market swings are not uncommon and can create both risk and opportunity. With roughly 60% of Americans invested through retirement accounts or portfolios, staying grounded and informed matters more than ever. Our investment team is closely tracking these developments and actively adjusting strategies to help clients navigate uncertainty with confidence.
Uncertainty is Surging
As of Wednesday, April 9, tariffs on Chinese imports are 104%, triggering retaliatory tariffs from China – 84% on U.S. goods.2 The back-and-forth pushed the NASDAQ into bear market territory, with the S&P 500 and Dow Jones Industrial Average following close behind. Labor market data is adding to the confusion, with nonfarm payrolls beating expectations but unemployment ticking up.
In the meantime, the Federal Reserve (Fed) remains on the sidelines as inflation persists and looming Treasury debt issuance. Unlike prior downturns in 2000, 2008, and 2020, monetary policy flexibility is limited. Perhaps our most recent comparison is the 2018 tariff-induced correction, but current risks are more global and widespread.
Japan and South Korea are among the allies trying to spearhead negotiations, but U.S. officials are unresponsive, stalling progress. Realistically, before any deals can be brokered, we need to see coordinated communication among the administration, Congress, and the Fed. Until then, we anticipate continued uncertainty and elevated market volatility.
Strategies for a Bear Market
In times like these, we advocate revisiting and tailoring risk to fit your situation. There is no one-size-fits-all approach, and studies show working with a financial advisor improves long-term results. Volatility may not be going anywhere anytime soon, but long-term outlooks remain strong with solid earnings and growing innovation in sectors like artificial intelligence. For some investors, recent pullbacks may present buying opportunities, particularly among quality tech names.
A look back can also offer some perspective. Markets recover, and opportunities emerge. Over the past decade, the NASDAQ has experienced six corrections, four of which turned into bear markets, and since 1928, we’ve seen 22 S&P 500 bear markets. Still, it’s important to highlight that the average bull markets last four times longer.
Final Thoughts
When every headline is a reminder of volatility, it can be hard to want to stay the course, but discipline is a skill you must learn to exercise in times like these. Investors should never make decisions out of fear; rather stay informed and be open-minded to the options available to you.
Talk to your advisor to evaluate your strategy and adjust, if necessary. Prime Capital Financial is here to help and provide the support and education you need to weather this storm.
Sources:
- NPR: China retaliates with new 84% tariffs as global markets fall
- The Wall Street Journal: The VIX, Wall Street’s ‘Fear Gauge’, Is Soaring. Here’s Why.
