SPX: S&P 500 Sinks 4.6% in Q1 for Worst Showing Since 2022 as Trump Tariffs Spook Traders

Hard-line tax charges knocked risk takers’ confidence in stocks due to their heavy reliance on foreign imports. Now what?

💸 S&P 500 Logs 4.6% Quarterly Loss

• The S&P 500 index (SPX) ended the first quarter with a bruising 4.6% decline, booking its worst three-month stretch in almost three years. Fears that Donald Trump’s aggressive stance on trade policy might shock businesses and consumers led to the outflow of capital.
• The broad-based stock average lost about $3 trillion in market cap from the start of the year, snapping a run of five consecutive positive quarters and scoring the worst one since the second quarter of 2022. Back then stocks dropped 16%. (Fast fact: equities tumbled 20% in Q1 of 2020 when Covid hit.)

💪 Trump Out to Get Them

• What’s driving the last quarter’s negative performance? It’s all about markets reacting to Trump’s looming tariff hikes on America’s biggest trading partners. The US President has switched to a “I’m out to get them, before they get me” mode as he floated levies as high as 200% on specific goods from specific places.
• The said tariffs seek to bolster domestic business production and trade but they also carry the power to hinder economic growth, increase prices and derail global supply chains. Not to mention souring consumer sentiment.

🔥 Europe Outperforms Big Time

• With this in mind, traders and investors are looking forward to Wednesday when Trump is expected to reveal his plan around tariffs. More precisely, who gets slapped with what — are there going to be exemptions, is it going to cover entire industries or will it be sector-specific? We’ll find out tomorrow (unless there’s been a change of plans).
• Across the Atlantic, European equities crushed their US counterparts. The pan-continental Stoxx 600 SXXP rose 5.2% for the three months to February. At one point, the gain was a whopping 10% (while at one point, the S&P 500’s loss was a whopping 10%).