{"id":13679,"date":"2025-03-12T21:37:26","date_gmt":"2025-03-12T21:37:26","guid":{"rendered":"https:\/\/zacksim.com\/blog\/?p=13679"},"modified":"2025-03-12T21:40:35","modified_gmt":"2025-03-12T21:40:35","slug":"policy-uncertainty-triggers-market-volatility","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/policy-uncertainty-triggers-market-volatility\/","title":{"rendered":"Policy Uncertainty Triggers Market Volatility"},"content":{"rendered":"\n

Policy Uncertainty and Market Volatility<\/strong><\/p>\n\n\n\n

Investors, business leaders, and U.S. consumers are unsure what tariff policy in the U.S. is going to look like over the short-, medium, and perhaps long-term. It also remains unclear to many market participants which tariffs have been implemented, which have been postponed and for how long, and what goods are affected.<\/p>\n\n\n\n

For markets, this is clearly a problem.<\/p>\n\n\n\n

As it stands today, the tariffs in place include a 25% broad-based duty on steel and aluminum, a 20% increase on Chinese imports, and a 10-25% tariff on certain Canadian and Mexican goods that do not comply with the United States Mexico Canada Agreement (USMCA). These measures have collectively raised the U.S. effective tariff rate by roughly 3%, which while not ideal, is also not necessarily a big risk to total U.S. economic output, in my view. The economy can absorb new trade terms and businesses can adjust accordingly, with perhaps only minor price increases here and there.1<\/sup><\/p>\n\n\n\n

But the story here is not really about tariffs and their economic impact. It\u2019s about uncertainty and negative surprises. Not knowing what tariffs will be announced tomorrow or next month is creating challenges for corporations and markets in the near term. As seen in the chart below, the last time economic policy uncertainty was this high was in the early days of the Covid-19 pandemic.<\/p>\n\n\n\n

Stay Ahead of Market Volatility: Download Zacks March Stock Market Outlook Report<\/a><\/u><\/strong><\/p>\n\n\n\n

With rising tariff uncertainty, shifting Fed policies, and economic volatility, navigating the current market landscape is more challenging than ever. The risks are high, but so are the opportunities.<\/p>\n\n\n\n

Our March 2025 Stock Market Outlook2<\/sup><\/a><\/u><\/em><\/strong> breaks down the key trends affecting the market\u2014helping you understand the risks ahead and how to position yourself for success. Inside, you\u2019ll find:<\/p>\n\n\n\n