That was probably for the best, because in the first half of 2025, the U.S. economy went through extreme trauma. Fears mounted, spurring a flight from U.S. assets among investors. This change brought about a significant depreciation of the dollar and a flash increase in instability in financial markets. Then, in early April, U.S. President Donald Trump declared a “reciprocal” tariffs. What’s next? This move sparked a consequential tariff war, the effects of which will be felt for years by domestic and international markets.
In April, President Trump imposed these tariffs on virtually every country, including several uninhabited islands, igniting fears of escalating trade conflicts. This choice added to a thickened palate of uncertainty, setting off enormous reactions in financial markets. Investors tanked the shares at first as investors struggled to digest the ramifications of the tariffs. They initially suffered, but they rebounded as market participants recalibrated their strategies to reflect the shifting economic reality.
To make the first half of 2025 even trickier, geopolitical tensions flared all over the world. These geopolitical tensions introduced a new layer of uncertainty, shaping investor sentiment and aggravating volatility seen across financial markets. Important elections occurred in many countries during this period, increasing market jitters and making the global economic picture even more difficult to assess.
Worries over the U.S. economy are mounting. Consequently, the dollar’s value is plummeting, indicating that investors are extremely concerned about the long-term viability of U.S. assets. Tariffs, impeachment, and rising international tensions made a toxic mix. This changed the market dynamics in important ways. Even expert financial analysts were amazed by the level of volatility that’s gone on. Domestic and international investors quickly reacted to the quickly evolving landscape.