When President Trump returned to the white house in January 2025, the world had numerous expectations. Investors anticipated some great performances in crypto assets, and tech companies had high hopes for stock price increases.
The administration has taken a pro-crypto stance for some time, so, understandably, people expected the former. The latter is also justifiable because top tech CEOs like Elon Musk, Mark Zuckerberg, and Jeff Bezos were seen taking prime seats at his inauguration. There was no better way to show that these companies are leading innovations during this administration.
However, despite these signs, the last few months haven’t been so promising for US investments, especially tech stocks. What are the issues, and how is the market reacting to this development? Read on to find out.
US Investments Are Tumbling
The US economy is greatly interconnected with the world, and although policies made in the region surely affect its citizens, they also often ricochet and snowball to affect other countries. This is the best way to summarize the current happenings in the US economy, policy changes, and its investment market. President Trump announced his plans to start a tariff war before he was elected, and since he resumed office, several countries have been on the sidelines discerning how to react to this development. While this persists, this news has done nothing but raise fear amongst market investors. Several finance markets have taken a nosedive, but the tech stocks sector has had some of the worst downturns.
Major economies like China and Europe are likely to be caught in this, and the fear that this could spark a global trade war has led to huge sell-offs amongst investors. Tech’s seven mega caps have shed several trillion over the past month—CNBC reported over a $2.7 trillion loss as of March 14. At the same time, the current administration has also gone back and forth on imposing import tariffs on countries like Canada, Mexico, and China; given that these tech companies rely on these locations to produce gadgets and expand their business, the threats have reflected poorly on US stock performances. Valuable companies like Apple, Nvidia, and Tesla are dropping billions from their market value, and investors are more uncertain than ever.
How Markets Are Responding to Ongoing Sell-Off
While the US stock market witnesses losses, other countries are performing well. European shares are up about 9% and at a record high, while tech stocks in Hong Kong are also leading, surging by 30% within the last month. Investors are directing their bullish bets to investments outside of the US markets. Canadian and Mexican stocks have also fared better in the past month. iShares MSCI Canada ETF (EWC) and iShares MSCI Mexico ETF have both surged significantly in March, while the S&P 500 struggles to recover.
Mexico has been resilient in its strong rebound from a poor 2024 performance. Canada’s online trading and stock market have benefited significantly from increased gold prices and higher valuation compared to US tech stocks. The technological cloud in China is also expanding at an unprecedented pace, from the recent AI DeepSeek launch to TikTok’s thriving position and other mind-blowing innovations. Its stock market has been immune to US tariff plans. And this might be the case moving on. The narrative that other investment markets are winning over the United States is pushing more people to look outside of its finance market for great returns.
Investor Strategies and Market Outlook
There is an ongoing shift to other value stocks, bonds, commodities, and more stable economies. This explains why other countries are experiencing better performances. Many investors are moving away from high-growth tech stocks to other reliable assets. There is a heightened fear amongst online traders, and many others anticipate a further decline in the S&P 500 within the coming months. Tech stocks are not the only options; other stock markets, including energy, industrial, and real estate, are great alternatives. Investors are advised to watch economic news and change policies for the next few months to avoid rising volatility. All tariff policies have been scheduled to be finalized before April 2, which makes now the best time to watch changes closely and monitor your portfolio.
Lastly, diversification is a strategy that helps traders balance their losses. Spread your assets across classes with relatively low volatility.
Navigating Uncertainty in Investments
The financial market is bound to come with volatility and uncertainties, and this is one reason why market watch should be a priority. As highlighted in the previous section, look to economic news that can help you make better decisions moving forward. It’s also very important to diversify and look to safer alternatives till the market recovers. There is so much to explore, and stock market declines should not restrict you from exploiting the potential gains out there.
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