S&P 500 hits its worst performance since 1974
In a stunning reversal from investor optimism following the November election, US stock markets have struggled significantly during President Donald Trump’s first 100 days in office. The S&P 500 has declined approximately 8% since his January inauguration, marking the worst performance during a president’s first 100 days since Gerald Ford took office in 1974 after Richard Nixon’s resignation, Bloomberg reported.
Despite Trump’s campaign promises of an economic “boom like no other,” markets have instead experienced explosive volatility—just not in the direction investors hoped. The S&P 500 plunged into correction territory earlier this month, marking its seventh-fastest correction since 1929, according to Bloomberg analysis.
Trade policies drive sharp market volatility
The market turmoil has been attributed to Trump’s aggressive trade policies. On April 2, the administration imposed what analysts called “the steepest US tariffs in a century,” triggering a 10% market decline over just two trading sessions. While some tariffs were subsequently delayed for 90 days, the policy whiplash has left investors deeply uncertain about future economic direction.
“It was whiplash after whiplash after whiplash,” said Dave Lutz, macro strategist at JonesTrading and a 30-year Wall Street veteran, told Bloomberg.
The trade uncertainty has particularly damaged consumer discretionary and technology sectors, according to experts. Major companies reporting significant share price declines include Tesla, United Airlines, Delta Air Lines, and Norwegian Cruise Line Holdings. Manufacturing firms with global supply chains have been especially vulnerable to tariff impacts.
Emerging markets gain as US stocks stumble
Meanwhile, emerging markets are benefiting from the US market volatility. The MSCI Emerging Markets Index has outperformed the S&P 500 in 15 of the past 20 weeks, with money managers increasingly viewing Trump’s policies as greater risks for US economic growth. This has created the biggest outperformance gap between emerging markets and US stocks in 16 years.
“Much of the outperformance can be explained by attractive valuations across EM markets prompting a rotation out of crowded US positions,” said Aarthi Chandrasekaran, head of asset management at Shuaa Capital, noting “loss of credibility in the dollar and broader US markets.”
Corporate earnings forecasts reflect these diverging trends. Analysts expect S&P 500 company profits to remain flat this year, while the average profit forecast for the EM benchmark has risen 2.2% since mid-January.
With Wall Street bracing for continued volatility, investors are approaching US markets with caution. Economists surveyed by Bloomberg now anticipate the trade war will impact economic growth both this year and next. As one market strategist bluntly stated: “We are not past the turmoil, and I don’t think we can pass the turmoil anytime soon.”
