Trade tensions between the United States and China have escalated in recent weeks, with both countries implementing unprecedented tariff increases. For the moment, the U.S. has raised tariffs on Chinese goods to 145%, while China has countered with 125% tariffs on American products.
The situation is evolving quickly and continues to affect financial markets. While global tensions can create uncertainty, history shows that markets have weathered similar challenges in the past. Despite the headlines, understanding the economic relationship between these two countries can help long-term investors to maintain perspective.
Investors have faced several market concerns early in the year around tech stocks, interest rates, and government policy. Among these factors, it’s no surprise that trade policy has emerged as particularly significant for markets. President Trump has launched various trade measures, including tariffs on Canada, Mexico, China, and the European Union. How should investors react to these news headlines?
When it comes to financial planning, it's important to recognize what we can and cannot control. We can control our own behavior, make thoughtful financial plans, and adjust our strategies as needed. However, we don't control the economic cycle, market movements, or policy decisions that impact the broader financial landscape. Recognizing this distinction allows us to focus on the aspects of our financial lives where our decisions truly matter.
The stock market has stumbled with the S&P 500 and Nasdaq declining year-to-date.1 While tariffs have garnered the most attention, investors are also concerned about mixed economic signals including weak consumer confidence, hotter inflation, government worker layoffs, and more. Some are now wondering if there will be a recession, and President Trump did not rule out the possibility in recent interviews. How can investors maintain perspective in this challenging market and economic environment?
Trade headlines continue to weigh on markets as new tariffs go into effect. President Trump recently confirmed tariffs on Canada, Mexico and China, dashing hopes of more extensions or last-minute deals. Additional tariffs are expected in the coming months, including reciprocal ones against countries that impose duties on U.S. goods.
Will your savings last as long as your retirement? It's a pressing question that keeps many Americans awake at night - and for good reason. The changing political, economic, and market environments can all impact retirement plans. A record number of people are also expected to retire this year, raising the question of how much they will need to have saved.
February was a volatile month for stocks. Tech continued the selloff that started in late December, with the Magnificent 7 falling 8.1% in the month. Tariffs and inflation fueled worries about growth as the new Trump administration began implementing policy changes. Fourth quarter earnings reports were solid, though mixed economic data and policy uncertainty prompted investors to favor defensive sectors. Bonds, especially longer-dated Treasurys, helped stabilize portfolios during the market volatility.
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