29 April 2025 marked 100 days of the second Trump administration in the US. Early in his presidency, Trump introduced tariffs on countries around the globe. The president believed that these taxes on imported goods would encourage the domestic economy in the US.
World leaders quickly responded to the tariffs, with many imposing their own import taxes on US goods. This sparked a trade war between the US and China, with tariffs on Chinese imports eventually reaching 145% on 9 April.
The resulting fallout from these tariffs has affected stock markets around the globe, and many professionals have forecast that the US economy could be heading for a recession. The situation is still unfolding as many countries, including the UK, try to negotiate trade deals with Trump, while the president could introduce further tariffs.
The disruption caused by tariffs came after an already challenging start to the year for some of the most profitable businesses in the world.
Indeed, Forbes reports that Tesla stocks fell in value by around 50% between December 2024 and mid-March 2025, losing almost $800 billion in market value. As it is one of the largest and fastest-growing tech companies on the planet, many investors likely hold Tesla stock in their portfolio.
Consequently, you may be concerned about how these developments might affect the value of your investments and your wider financial plan.
Read on to learn more.
Global stock markets fell after Trump announced plans to put tariffs in place
When Trump first announced he would put tariffs in place, global stock markets reacted quickly. On 3 April 2025, the BBC reported that the S&P 500 fell by 4.8%, losing around $2 trillion in value, in a single day.
Similarly, the Nikkei Index in Japan fell by 2.7%, Australian markets lost 1.6%, and the FTSE 100 dropped by 1.5%.
As such, no matter where you are invested, you could have been affected by market volatility before and after the introduction of tariffs, and the value of your investments may have fallen.
In this situation, it is natural to be concerned about your ability to generate growth and achieve your long-term financial aims. You might even consider selling investments to avoid further losses in the future.
However, this strategy may not benefit you because markets typically bounce back after a period of volatility. Consequently, cashing out of the markets prematurely could mean you miss out on opportunities for growth in the future.
The S&P 500 reported one of the best days since the second world war after Trump paused tariffs for many countries
The initial disruption to the stock market and ongoing economic uncertainty caused by tariffs could affect your investment portfolio. Fortunately, the markets have shown some signs of recovery already.
According to the Guardian, when Trump announced a pause on tariffs for most countries apart from China on 9 April, the S&P 500 was up by 9.5% at market close. This is one of the biggest single-day increases for the index since the second world war.
While global stock markets are yet to fully recover, this sharp increase in the value of the S&P 500 demonstrates that volatility is often short-lived.
If you had panicked after the initial dip and sold your US investments, you would have locked in those losses. As a result, it could have been more difficult to achieve the necessary growth to meet your financial aims.
Conversely, if you held your investments, you may have benefited from returns when the markets began to recover. If you were to stay invested, the markets could eventually exceed their pre-tariff value.
This means you may still generate long-term growth, despite the disruption caused by the tariffs. While there are no guarantees that this will happen, historical data suggests that it is likely.
2025 could bring more volatility, but you may still generate long-term growth if you hold your investments
As Trump continues his policy of tariffs, there is a chance that the global economy could suffer, and the value of your investments may fall further throughout the rest of 2025.
While this may cause concern, it is not the first time global events have affected stock markets. In fact, there have been many crashes throughout history, and the markets have always recovered and continued growing.
The Covid-19 pandemic is a recent example of this. When countries began implementing lockdowns and the global economy ground to a halt, the markets fell significantly.
Figures reported by Forbes show that between 12 February and 23 March 2020, the Dow Jones index fell in value by 37%.
At the time, the unprecedented events of the Covid-19 pandemic appeared to cause significant damage to the economy. If you were invested at this time, you might have panicked and thought that selling to avoid further losses was the most sensible option.
Yet, leaving the markets at this time could have been a mistake because, despite large initial falls, the stock market quickly recovered. In fact, the Dow Jones reported overall growth of 6.6% in 2020.
As such, holding investments and maintaining your investment strategy throughout the pandemic would have allowed you to expand the value of your portfolio. Meanwhile, selling after the initial dip would likely have meant you locked in significant losses.
The same may be true of the current situation with tariffs in the US.
Provided you have a well-diversified investment portfolio and consider the level of risk you adopt, you should be able to weather this period of volatility. Ultimately, with our support, this means you can grow your wealth in the long term and achieve your financial aims.
Get in touch
At DBL Asset Management, we can help you build a portfolio capable of withstanding market volatility now and in the future.
Email enquiries@dbl-am.com or call 01625 529 499 to speak to us today.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.