It’s been a brutal start to March as markets reverse their Trump-driven euphoria following the president’s recent tariff war escalation and fears over slower economic growth in the face of stubborn inflation.
Both the benchmark S&P 500 (^GSPC) and tech-heavy Nasdaq Composite (^IXIC) have each erased their post-election gains, with the latter entering correction territory on Thursday after falling 10% from its record closing high of 20,173.89 on Dec. 16.
February’s jobs report, released Friday, offered some relief with the US economy adding 151,000 jobs, but it was still a brutal week for stocks. The S&P 500 capped off its worst week since September.
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“It’s an uncertain time,” John Stoltzfus, chief investment strategist at Oppenheimer, told Yahoo Finance in an interview on Wednesday. “But gosh, we had the great financial crisis, we had COVID-19, we had the supply chain disruptions [coming out of that], and we did remarkably well.”
In other words, the stock market has remained resilient in the face of significant disruptions. And despite recent sell-off action, most strategists believe it will stay that way: Stoltzfus expects the S&P 500 to finish the year at 7,100, which implies about 25% upside based on current trading levels.
“Chaos creates opportunities,” added Dan Ives, global head of technology research at Wedbush. “[Buying the dip] has been our playbook for decades. The macro scares you and then you look back and say, ‘Why don’t I own the winners? Why don’t I own the dip?'”
But the dip has escalated quickly.
The S&P (^GSPC) has swung 2% over the past seven consecutive sessions after hitting a record high on Feb. 19. According to data compiled by Yahoo Finance, this was the longest such stretch in intraday moves for the benchmark index since August 2024 — the last time economists warned of a growth scare.
Prior to August, volatility swings of that level also showed up in March 2023, around the time of Silicon Valley Bank’s collapse.
President Donald Trump addresses a joint session of Congress at the Capitol in Washington, Tuesday, March 4, 2025. (Win McNamee/Pool Photo via AP) ·ASSOCIATED PRESS
Given these moves, some Wall Street watchers have said now is the time to take advantage of lower valuations, with the resiliency picture largely still intact.
“[Tariffs] add uncertainty,” Wedbush’s Ives said. “But in my opinion it doesn’t change the demand cycle. In other words, this is not going to end the tech bull market. It’s a scare. But I believe it’s more opportunities than the time to head for the hills.”
Read more: What Trump’s tariffs mean for the economy and your wallet
Evercore ISI’s Julian Emanuel, who has a year-end S&P 500 price target of 6,800, added in a note to clients on Tuesday that “stocks suffer bear markets when complacency sets in.”
“The geopolitical headlines and the urgent selling of the past week in response to fears around tariffs, Ukraine/Russia and DOGE are the opposite of complacent and at odds with earnings that project 8.2% year-over-year growth with a Fed likely to cut twice to preserve the ‘soft landing,'” he said, adding market dips “are buying opportunities in 2025’s volatile environment.”
And although growth fears are rising, Ed Yardeni from Yardeni Research believes the economy will “turn out to be remarkably resilient,” citing expectations of increased consumer and capital spending, along with a potential deescalation of tariff concerns.
For now, though, “there’s a lot of bargains to be had here with this very sharp sell-off in a very short period of time.” And with Trump’s track record of monitoring his popularity with stock market gains, Yardeni said it’s only a matter of time before the administration steps in, regardless of what the president may say.
ISM’s manufacturing prices paid came in at their highest since June 2022, while new orders fell into contraction, suggesting a “stagflationary” environment in which growth slows but price increases remain elevated. That data arrived on top of bleak survey results for the month of February, with declining consumer confidence and sentiment results weighing on markets.
Read more: From $5 eggs to insurance premiums, here’s where prices are rising
Here’s the concern: Rising inflation would squeeze consumers’ purchasing power and weigh on demand at a time when the consumer is already feeling the pinch of higher prices. Less demand for goods means lower sales for companies, which would pressure profit margins and eventually force businesses to cut jobs and lay off employees.
If that happens, the Federal Reserve has already indicated it would step in to stop the bleeding, hence the market’s latest recalibration of future rate cuts. Following Friday’s jobs report, markets continued to price in three rate cuts this year.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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