Last week saw the worst trading action of the year on the American stock market. Fears over inflation and economic uncertainty dragged down the major indexes.
This Monday, the Dow Jones Industrial Average index was little changed after it had its worst week since October. But the S&P 500 fell 0.5%, while the tech-heavy Nasdaq Composite fell 1.2%, as investors weighed the prospects of President Donald Trump’s tariff policies. During a press conference on Monday, President Donald Trump suggested tariffs on Mexico and Canada would “go forward on time, on schedule,” once a month-long delay is over next week.
As a result, over the past five days, Nasdaq Composite dropped by 3.7%, Dow Jones Industrial Average by 2.4% and S&P 500 by 2.1%. The main Canadian stock index, S&P/TSX Composite, went down by 1.3% over that period.
Yahoo Finance
“The White House had investor support for the first four weeks of the term, but the honeymoon may be coming to an end,” cnbc.com quoted Scott Helfstein, head of investment strategy at Global X.
What could weigh on the stocks going forward is stubbornly high inflation in the U.S. which could prevent the Federal Reserve from delivering more relief for the economy and financial markets through lower interest rates, noted union-bulletin.com. The American consumer price index increased 3% in January from a year ago, up from 2.9% the previous month. It has increased from a 3 1/2 year low of 2.4% in September.
But some experts remain optimistic regarding the American stocks’ performance in 2025. The S&P 500 remains up more than 2% year to date, and pullbacks should be seen as a buying opportunity, Yahoo Finance quoted UBS strategists.
“We see the S&P 500 rising to 6,600 by the end of the year [5,983 currently], although the journey up is likely to be accompanied by heightened volatility,” Solita Marcelli, UBS Global Wealth Management chief investment officer of the Americas, wrote on Monday.
“Portfolio diversification and hedging approaches are key, and we think capital preservation strategies can help manage drawdown risks in equities,” she added.
Michael Zienchuk, MBA, CIM
Investment Advisor, Credential Securities Inc.
Manager, Wealth Strategies Group
Ukrainian Credit Union
416-763-5575 x204
mzienchuk@ukrainiancu.com
www.ukrainiancu.com
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