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22 February 2022, Hamburg: Stock prices of the S&P500 are shown on a smartphone against a red ... More background. Photo: Daniel Reinhardt/dpa (Photo by Daniel Reinhardt/picture alliance via Getty Images)
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Have you been keeping an eye on your portfolio lately? Things have become quite interesting since January, and not in the way most investors would have hoped. In the roughly three months since Trump moved back into the White House, the financial markets have already taken quite a beating. Given the current trajectory, the markets could still experience another 25% decline.
The Damage So Far
Remember how the markets were riding high in January? Well, that party didn't last long. The S&P 500 has tumbled around 15% from its peak of over 6,140 to under 5,300 now. If you're heavy in tech stocks, we feel for you – the Nasdaq has taken an even bigger hit, down a whopping 20% from its highs.
And crypto enthusiasts? Bitcoin has corrected about 20% too. Meanwhile, 10-year government bond yields have fallen from 4.8% in January to 4.3% now, which typically signals investors fleeing to safer options.
Speaking of safe havens, gold has been shining bright – up roughly 25% so far this year. Classic flight to safety, right?
What Sparked This?
So what got us here? It all kicked off when the new administration started imposing those tariffs on trading partners. Remember those campaign promises about getting tough on trade? Well, they're becoming reality, and the trade war with China has escalated significantly.
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