Stock Market's Quiet Day: Not a Pretty Picture

The stock market finally got a quiet day, but it’s not going great. The S&P 500 has been on a rollercoaster ride since the start of 2025, and the recent calm is more of a lull before the storm. The index has been in correction territory since early March, marking a 10% drop from its peak levels. This decline is largely attributed to uncertainty surrounding new Trump administration tariff policies and growing economic concerns.



The market’s decline appears to reflect uncertainty surrounding new Trump administration tariff policies and growing economic concerns. After leading the stock market for the last two years, the technology sector is lagging the broader S&P 500 Index in 2025. The same three sectors that drove stellar 2023 and 2024 S&P 500 performance—information technology, communication services, and consumer discretionary stocks—now weigh the market down. These sectors account for 50% of the S&P 500’s market capitalization, and all three are in negative territory year-to-date, with particularly sharp drops for information technology and consumer discretionary stocks.

The recent focus on new tariff policies is a critical market factor, according to Eric Freedman, chief investment officer for U.S. Bank Asset Management. “There’s been a lot for the market to absorb with the on-and-off status of tariffs, their size, the countries affected and mechanisms by which tariffs will be enacted.” Freedman says the pace of change has given companies and consumers a lot to take in over a short period of time.

In addition, Trump’s policy shifts on the Russia-Ukraine war, temporarily pausing U.S. financial support for Ukraine, heightened geopolitical concerns. This too contributed to further investor uncertainty. The University of Michigan’s Consumer Sentiment Index dropped 11% in March from February, and 27% below its year-ago level. It’s not clear whether flagging consumer sentiment is a harbinger of subsequent economic performance.

Despite the market’s gyrations, many underlying fundamentals are, for the time being at least, positive. “Consumers are in a good spot, companies are flush with cash,” says Freedman. “How we endure change will be important, but we’re starting from a position of strength.”



The recent volatility is a notable market dynamic so far this year. The CBOE’s Volatility Index, often referred to as the “fear index,” has been a critical market volatility measure. The VIX rising into the 20+ range indicates weaker market sentiment. The gauge peaked above 27 just before the market fell into correction territory. It has since retreated, but remains above 20.

The question now is whether the economy can maintain momentum. The University of Michigan’s Consumer Sentiment Index dropped 11% in March from February, and 27% below its year-ago level. It’s not clear whether flagging consumer sentiment is a harbinger of subsequent economic performance. Recession fears are rising, and the market’s recent selloff is a reflection of that.

The stock market’s quiet day is a temporary respite from the volatility that has characterized the year so far. The underlying trends are far from calm, and the market’s recent selloff is a reflection of growing economic concerns and uncertainty surrounding new Trump administration tariff policies. The technology sector’s underperformance is a particular concern, as it has been a leading performer in recent years. The market’s recent volatility is a reflection of the uncertainty surrounding the economy and the potential impact of new tariff policies. The question now is whether the economy can maintain momentum in the face of these challenges.