Market Insights: Tariff Talk Returns, Volatility Close Behind

Stocks were mixed last week as investor concerns over inflation and trade policy combined to produce another volatile trading week.  The Dow Jones Industrial Average rose 0.95 percent, while the Standard & Poor’s 500 Index lost 0.98 percent. Meanwhile, the tech-heavy Nasdaq Composite Index dropped an eye-catching 3.47 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, lost 1.03 percent.1,2 Trade Talk The week began under pressure after the White House said 25 percent tariffs on Mexico and Canada would begin after the 30-day pause ends in early March.  On Tuesday, S&P and Nasdaq stocks continued their slide on news that consumer confidence weakened more than expected. Concerns about inflation and tariffs merged with investors fretting over economic growth and global trade. It was the fourth straight day of declines for the S&P 500 and Nasdaq. The Dow, however, advanced for its third consecutive session.3,4 After a quiet Wednesday, stock fell broadly on Thursday after the White House announced additional tariffs on goods from China and Europe. A large chipmaker prominent in artificial intelligence (AI) matters produced a mixed corporate report for Q4, which put some pressure on the broader market.5,6 Friday’s news that inflation moderated boosted stocks, with prices accelerating higher into the close of trading. The Fed’s favorite core inflation measure hit 2.6 percent in January, which aligns with forecasts.7

Source: YCharts.com, March 1, 2025. Weekly performance is measured from Monday, February 24, to Friday, February 28. TR = total return for the index, which includes any dividends as well as any other cash distributions during the period. Treasury note yield is expressed in basis points.

Getting a Read on Tariffs Markets dislike uncertainty, so steady trade talk produces volatile intra-week trading. Investors don’t know what tariffs will be enforced versus which ones are part of an ongoing negotiation, which can produce unsettling price swings.  S&P 500 companies echo some of that uncertainty. At last check, 146 have mentioned the term “tariff” or “tariffs” on Q4 conference calls with shareholders–the highest level since Q2 2019.8 This Week: Key Economic Data Monday:  ISM Manufacturing. Construction Spending. Tuesday:  Auto Sales. New York Fed President Williams speaks. Wednesday:  ADP Employment Report. Factory Orders. ISM Services Index. Thursday:  Productivity. Trade Deficit. Wholesale Inventories. Friday:  Employment Situation. Consumer Credit. New York Fed President Williams speaks. Source: Investors Business Daily - Econoday economic calendar; February 27, 2025 The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision. This Week: Companies Reporting Earnings Tuesday:  CrowdStrike (CRWD), Target Corporation (TGT), AutoZone, Inc. (AZO) Wednesday:  Marvell Technology, Inc. (MRVL) Thursday:  Broadcom Inc. (AVGO), Costco Wholesale Corporation (COST) Source: Zacks, February 27, 2025. Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

“Only a life lived for others is a life worthwhile." – Albert Einstein

Don’t Forget to Check Your Withholding When was the last time you checked your tax withholding? Having the correct amount of tax withheld from your wages is part of managing your taxes. The amount you withhold depends on your income, the number of children you claim on your return, and more.  The IRS has a helpful tool on their site called their Tax Withholding Estimator that can help you know if you have too much or too little tax withheld from your wages. Before using the tool, have all your paperwork handy, including your W2, 1099, 1095-A, and 1099-NEC, and any other forms to determine how much your income is taxable. This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional. Tip adapted from IRS9

What is Foam Rolling? Exercise is super important for our overall health, but so is recovery. Foam rollers are a popular recovery tool because they help release tension in tight, tired muscles. Foam rollers are large cylinders made from high-density foam. They come in different sizes and firmness levels and can massage large and smaller muscle groups. You can use the foam roller before or after a workout, depending on your needs. You can do countless foam rolling exercises for sore muscles, including rolling out your hamstrings, quads, upper back, lower back, IT band, triceps, forearm, and more. Tip adapted from WebMD10

Lidia immediately went bankrupt after the car she was pushing around stopped in front of a hotel. It sounds sad, but she wasn’t upset. What was she doing? Last week’s riddle: I have rosy cheeks, I am round and cute – yet debate persists over whether I am vegetable or fruit. What might I be? Answer: A tomato.

Arashiyama Bamboo Forest Kyoto, Japan

Footnotes and Sources 1. The Wall Street Journal, February 28, 2025 2. Investing.com, February 28, 2025 3. CNBC.com, February 25, 2025 4. MarketWatch.com, February 25, 2025 5. CNBC.com, February 26, 2025 6. CNBC.com, February 27, 2025 7. The Wall Street Journal, February 28, 2025 8. Insight.FactSet.com, February 10, 2025 9. IRS.gov, January 30, 2024 10.WebMD, October 3, 2024

Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.

The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.

The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.

The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.

U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.

Please consult your financial professional for additional information.

This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.

Copyright 2025 FMG Suite.

Advisory services are offered through Q2 Wealth Management (“Q2”), a Registered Investment Adviser. Insurance products and services are offered through Q2 Wealth Insurance, an affiliated insurance company. Q2 Wealth Management and Q2 Wealth Insurance are not affiliated with or endorsed by the Social Security Administration or any other government agency. ⦁ Information presented herein is intended for a broad audience, as educational in nature, and does not intend to make an offer or solicitation for the purchase or sale of securities, products, or services. This content may be dated. It is not intended to provide any tax or legal advice or provide the basis for any financial decision(s). Be sure to consult your investment adviser, tax professional, or legal counsel concerning your specific situation before considering any information discussed herein. ⦁ Investing always involves risk and possible loss of capital. Past performance is not indicative of future results. ⦁ Q2 has a reasonable belief that this marketing does not include any false or materially misleading statements or omissions of facts regarding Q2’s services, investments, or client experiences. Q2 has a reasonable belief that the content as a whole will not cause an untrue or misleading implication regarding Q2’s services, investments, or client experiences. ⦁ This communication shall in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services to any residents other than those States in which Q2 is registered or where otherwise legally permitted. ⦁ The securities industry personnel in question may only transact business in those states where they are registered or otherwise excluded or exempted from state registration requirements. ⦁ All expressions of opinion are subject to change without notice. All information is subject to change without notice. Any views or opinions expressed may not reflect those of Q2. ⦁ The Adviser believes that the content provided by third parties and/or linked content is reasonably reliable and does not contain untrue statements of material fact, or misleading information. This content may be dated. ⦁ “Likes” are not intended to be endorsements of our firm, our advisers, or our services. Please be aware that while we monitor comments and “likes”, we do not endorse or necessarily share the same opinions expressed by site users. We request that you do not post or comment. ⦁ Third-party rankings and recognitions are no guarantee of future investment success and do not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the advisor by any client nor are they representative of any one client's evaluation. ⦁ Charts, graphs, and formulas may be discussed and displayed which are not intended to be used by themselves to determine which securities to buy or sell, or when to buy or sell them. Such charts and graphs offer limited information and should not be used on their own to make investment decisions.