The recent volatility in the stock market has been attributed to President Donald Trump’s tariffs on imports from China, Canada, and Mexico. Market experts advise long-term investors to remain calm despite alarming headlines. While the S&P 500 index hit an all-time high on February 19, concerns about tariffs have led to predictions of a significant correction. JPMorgan economists raised their recession risk forecast to 40% from 30%. However, history suggests that sentiment shifts can occur faster than anticipated. Last year, a decline of 8.5% over three weeks was quickly reversed. Dave Donabedian of CIBC Private Wealth U.S. notes that even in true crises, the S&P 500 often recovers within a month. The primary cause of the current market decline is the uncertainty surrounding Trump’s tariff policies. Although tariffs negatively impact economies, the uncertainty they create is more damaging. Businesses need clarity to plan capital expenditures. Despite the turmoil, there are signs of optimism elsewhere in the economy. Inflation eased to 2.8% in February, raising hopes for potential interest rate cuts by the Federal Reserve. The top-performing sector recently was information technology. Some strategists see this as an opportunity to invest in underperforming areas of the market, such as small-cap stocks or international markets. — news from Forbes
