{"id":13683,"date":"2025-03-12T21:44:33","date_gmt":"2025-03-12T21:44:33","guid":{"rendered":"https:\/\/zacksim.com\/blog\/?p=13683"},"modified":"2025-03-18T13:41:17","modified_gmt":"2025-03-18T13:41:17","slug":"uncertainty-drives-recent-market-volatility","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/uncertainty-drives-recent-market-volatility\/","title":{"rendered":"Uncertainty Drives Recent Market Volatility"},"content":{"rendered":"\n<p><em>Kari O. from Carmel, IN asks: <\/em>Hello Mitch, I\u2019m looking for your thoughts on the recent declines in the stock market. Things seemed to be going pretty well after the election and now all of a sudden, the market has done a U-turn. Do you think this is just temporary or are we heading for more trouble?<\/p>\n\n\n\n<p><strong>Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n<p>Thanks for writing. Investors everywhere are likely wondering the same thing as you.<\/p>\n\n\n\n<p>If I were to give you a one-sentence explanation for recent market volatility, it would be the following: <em>The uncertainty of trade and economic policy in the U.S. is pressuring a fully valued stock market, but I do not think\u2014at least for now\u2014that it\u2019s changing the trajectory of the economy or corporate earnings.<sup>1<\/sup><\/em><\/p>\n\n\n\n<p>That\u2019s a long sentence, I know. But let me break it into sections.<\/p>\n\n\n\n<p>The first piece is valuations. We know around the end of last year that the S&amp;P 500 was trading at over 21x 2025 earnings, which is above its 10-year average of 19x. Valuations are not predictive, of course. U.S. corporate earnings could accelerate \u2013 particularly in areas of the market where multiples are lower, i.e., outside of Tech \u2013 and the market could keep pushing higher.<\/p>\n\n\n\n<p><strong><u><a href=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2025_03_13&amp;content=volatility_can_be_good_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2025_03_13&amp;content=volatility_can_be_good_guide\">Markets Are Shifting\u2014Here\u2019s How to Stay Ready<\/a><\/u><\/strong><\/p>\n\n\n\n<p>Sudden market swings have investors on edge, but volatility isn\u2019t just a sign of trouble\u2014it can be a key driver of opportunity. With economic uncertainty pressuring stocks, knowing how to navigate these shifts is more important than ever.<\/p>\n\n\n\n<p>Get our free guide, <strong><em><u><a href=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2025_03_13&amp;content=volatility_can_be_good_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2025_03_13&amp;content=volatility_can_be_good_guide\">Using Market Volatility to Your Advantage<sup>2<\/sup><\/a><\/u><\/em><\/strong>, and discover practical strategies to manage risk, identify potential entry points, and position yourself for long-term gains\u2014even in a turbulent market.<\/p>\n\n\n\n<p>Inside, you\u2019ll find our insights on:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>How market volatility can \u201cshake up\u201d complacent investors<\/li>\n\n\n\n<li>Potential bargains that may be uncovered through turbulence<\/li>\n\n\n\n<li>Why volatility may help prevent overheating and market \u201cbubbles\u201d<\/li>\n\n\n\n<li>What history shows us about opportunities for steady investors in turbulent markets<\/li>\n\n\n\n<li>Plus, more ways you may be able to benefit from a volatile market<\/li>\n<\/ul>\n\n\n\n<p><strong><u><a href=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2025_03_13&amp;content=volatility_can_be_good_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2025_03_13&amp;content=volatility_can_be_good_guide\">Download Our Free Guide, \u201cUsing Market Volatility to Your Advantage\u201d<sup>2<\/sup><\/a><\/u><\/strong><\/p>\n\n\n\n<p>In fact, excluding Technology\u2019s contribution to 2025 expected earnings, we are still anticipating 12+% full-year earnings growth. We currently show 16 Zacks sectors we expect to enjoy positive earnings growth in 2025, with nine expected to post double-digit earnings growth.<\/p>\n\n\n\n<p>As I\u2019ve written before, however, a fully valued market also implies that any policy missteps, perceived economic weakness, or earnings misses could have an outsized effect on downside volatility. And that\u2019s where the uncertainty factor comes into play.<\/p>\n\n\n\n<p>If the market rally following the election was tied to optimism about deregulation, lower taxes, and a general pro-business and pro-growth stance from the new administration, then the selloff may be aptly attributed to the notion that tariffs are working against these goals. Above most things, markets do not like uncertainty, and the on-again, off-again nature of tariffs over the past few weeks is not exactly providing clarity.<\/p>\n\n\n\n<p>The case-in-point is trade policy between the U.S., Mexico, and Canada. 25% tariffs were implemented, then delayed by one month, and then implemented again with exceptions that many investors and business leaders are still trying to map out. Businesses and investors are also trying to determine if this will be the \u201cfinal delay\u201d as communicated by the Trump administration, which could mean the tariffs become more permanent if demands aren\u2019t met.&nbsp;<\/p>\n\n\n\n<p>Ultimately, this situation reinforces a fundamental market principle: uncertainty breeds hesitation. Without clear policy direction, businesses struggle to make strategic decisions, leading to a more cautious economic environment. As more details emerge, markets will likely reassess the broader economic effects of these trade measures, but for now, hesitation remains the dominant theme\u2014and short-term stock market volatility comes with that.<\/p>\n\n\n\n<p>Without a clear understanding of what policy will look like from here, it\u2019s challenging to make a forecast for how long the volatility will last. U.S. economic fundamentals remain in overall solid shape, and we still believe U.S. corporations can deliver double-digit earnings growth in 2025. There just needs to be a clearer roadmap for how trade policy will look moving forward, so businesses\u2014and the market\u2014can adjust accordingly.<\/p>\n\n\n\n<p>Market uncertainty can rattle investors, but it doesn\u2019t have to derail your strategy. Volatility isn\u2019t just risk\u2014it can also be an opportunity to strengthen your approach and position yourself for potential gains.<\/p>\n\n\n\n<p>That\u2019s why we\u2019re offering all readers our guide, <em><strong><u><a href=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2025_03_13&amp;content=volatility_can_be_good_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2025_03_13&amp;content=volatility_can_be_good_guide\">Using Market Volatility to Your Advantage<\/a><\/u><\/strong><\/em><strong><u><sup><a href=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2025_03_13&amp;content=volatility_can_be_good_guide\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-use-volatility-to-your-advantage?source=zim&amp;medium=blog&amp;term=mitchsmailbox_zim_2025_03_13&amp;content=volatility_can_be_good_guide\">3<\/a><\/sup><\/u><\/strong>. Inside, you\u2019ll also learn:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>How market volatility can \u201cshake up\u201d complacent investors<\/li>\n\n\n\n<li>Potential bargains that may be uncovered through turbulence<\/li>\n\n\n\n<li>Why volatility may help prevent overheating and market \u201cbubbles\u201d<\/li>\n\n\n\n<li>What history shows us about opportunities for steady investors in turbulent markets<\/li>\n\n\n\n<li>Plus, more ways you may be able to benefit from a volatile market<\/li>\n<\/ul>\n\n\n\n<p>If you have $500,000 or more to invest, download this free guide today by clicking on the link below.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Following the U.S. election, the markets rallied. But as businesses try to understand U.S. trade policy, uncertainty triggers hesitation and volatility.<\/p>\n","protected":false},"author":3,"featured_media":13575,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[66,71],"tags":[],"class_list":["post-13683","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mitchs-mailbox","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13683","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=13683"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13683\/revisions"}],"predecessor-version":[{"id":13684,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13683\/revisions\/13684"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media\/13575"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=13683"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=13683"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=13683"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}