The US stock market is showing signs of weakness as post-election euphoria collides with economic and geopolitical concerns. Big-tech stocks, which have driven gains in recent years, are losing steam, while investors shift to safer assets.
Key Concerns Weighing on Markets
๐น Economic slowdown fears: Weak data reports in recent weeks signal potential trouble.
๐น Trumpโs tariff policies: Rising concerns over new trade restrictions on China, Mexico, and Canada.
๐น Geopolitical tensions: A heated exchange between Trump and Ukrainian President Zelenskiy at the White House has heightened market uncertainty.
The S&P 500 has now declined for two consecutive weeks, nearing its Election Day level of 5,782.76. Fridayโs late-session rally pushed the index to 5,954.50, but it remains well below last weekโs peak of 6,144.15.
Investor Sentiment Hits New Lows
๐ Bearish sentiment is at its worst level since 2022, according to the American Association of Individual Investors. Historically, such low sentiment has been a contrarian indicator, meaning stocks could see a strong rebound in the coming months.
US Stocks Lag Behind Global Markets
๐ The S&P 500 is up just 1.2% in 2025, while:
โ
Chinese ADRs and European equities have gained 10%+
โ
Canadian stocks are outpacing the S&P 500
This underperformance follows Trumpโs announcement of 25% tariffs on imports from Mexico and Canada (starting March 4), with China facing an additional 10% levy.
Risk Aversion on the Rise
๐จ Investors are pulling money out of riskier assets, with:
๐ป The top seven US tech stocks entering correction territory
๐ป Unprofitable tech stocks plunging
๐ป Heavily shorted stocks losing all their post-election gains
With volatility on the rise, traders will be watching sentiment indicators and tariff developments to gauge whether this is a short-term dip or the start of a broader market downturn.