Aristîa Note: Current Market Activity and Tariffs
April 4th, 2025
Current Market Activity
Stock Market Trends
The stock markets have been experiencing significant volatility over t days. Major indices such as the S&P 500, NASDAQ, and Dow Jones Industrial Average have seen strong selling action. We attribute this to a combination of things, however on April 2, Tariff announcements came in higher than even our highest tariff scenario’s. In our view this was not the cyclical tariffs we expected and incorporated a lot of nuanced data to derive these percentages. The Markets’ new projections for GDP Growth and Inflation are likely to be affected adversely.
Tariffs and Trade Policies
Recent Tariff Developments
Tariff policies have once again come to the forefront of international trade discussions. The recent imposition of tariffs by major economies has sparked debates on their potential impact on global trade dynamics.
Impact on Industries
• Automobile Industry: Tariffs on steel and aluminum have increased production costs, leading to potentially smaller margins for producers. Manufacturers are seeking alternative supply chains to mitigate these impacts.
• Agriculture: Agricultural exports have been affected by retaliatory tariffs from trading partners. Farmers are particularly concerned about market access and price competitiveness.
• Consumer Electronics: Tariffs on components and finished products are pushing up prices. Companies are exploring ways to absorb costs without passing them entirely to consumers.
• Apparel Makers are particularly exposed as most of their materials and products come from Asia where tariffs are the highest.
Market Near Term Weakness
• Both March and April have been difficult months as uncertainty has increased.
• We expect this market weakness to continue without a few announcements.
• The patterns and precipitous declines would indicate to us that a rapid rebound could take place at some point in the future.
Market Rebound
- Markets have a way of softening certain positions. Look for Trump to announce positive country negotiations.
- Also look for the Trump Admin to maybe provide exceptions to companies as they make new commitments on the transition to more manufacturing in America i.e. Apparel companies. We hope this begins to happen sooner rather than later.
- Fed helps the economy by reducing rates.
- Data is better than Analysts’ and Market expectations.
Investor Psychology/Behavior
1). Stay the course. Follow your Financial Plan. If you have a 401K or other retirement plan you have an opportunity to accumulate more shares at reduced prices, increasing the probability of higher future returns. Dollar cost averaging is a wonderful tool.
2). Wait patiently. If you have cash on the sidelines waiting for an opportunity to buy stocks, continue to patiently evaluate for bargains.
3). Stay Calm. During periods of heightened market uncertainty, it is natural to experience a range of emotions. However, study after study has shown emotional investing to be a detriment to your long-term success. Do not let emotions influence your judgement. Knee jerk reactions are not a sound investment strategy
4). Engage with your Financial Advisor and team. If you have not already done so, I invite you to engage our Financial Planning Resources, which will help you create goals, objectives, and probabilities of success. This is a more objective roadmap that will help you steer the course through most market circumstances.
By David McInnis, MBA, CFP®, CIMA®