{"id":12266,"date":"2025-03-24T00:01:22","date_gmt":"2025-03-24T00:01:22","guid":{"rendered":"https:\/\/finderica.com\/?p=12266"},"modified":"2025-03-24T00:01:22","modified_gmt":"2025-03-24T00:01:22","slug":"why-uncertainty-makes-the-stock-market-go-haywire","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=12266","title":{"rendered":"Why uncertainty makes the stock market go haywire"},"content":{"rendered":"<div id=\"RegularArticle-ArticleBody-5\" data-module=\"ArticleBody\" data-test=\"articleBody-2\" data-analytics=\"RegularArticle-articleBody-5-2\"><span class=\"HighlightShare-hidden\" style=\"top:0;left:0\"><\/span><\/p>\n<div class=\"InlineImage-imageEmbed\" id=\"ArticleBody-InlineImage-108117824\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div>\n<p>Traders on the floor of the New York Stock Exchange on March 14, 2025, at the opening bell.\u00a0<\/p>\n<p>Timothy A. Clary | Afp | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>Uncertainty isn&#8217;t in short supply these days \u2014 and investors have taken notice.<\/p>\n<p>See-sawing policy from the White House has given investors whiplash on many fronts \u2014 with tariffs being among the biggest question marks, market experts say.<\/p>\n<p>Coupled with uncertainty around federal job cuts, negotiations to end the war in Ukraine and other issues, the combination has been &#8220;disorienting to market sentiment,&#8221; Paul Christopher, head of global investment strategy at the Wells Fargo Investment Institute, wrote Wednesday.<\/p>\n<p>Stocks have wobbled amid the vertigo.<\/p>\n<p>The <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-4\">S&amp;P 500<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> entered a correction last week, meaning the U.S. stock index fell 10% from its recent high mark in February. The index has recovered a bit but teetered on the edge of a correction Tuesday afternoon.<\/p>\n<p>The benchmark is down about 5% in 2025.<\/p>\n<\/div>\n<div role=\"region\" aria-labelledby=\"Placeholder-ArticleBody-Video-108118112\">\n<div role=\"button\" tabindex=\"0\" id=\"Placeholder-ArticleBody-Video-108118112\" class=\"PlaceHolder-wrapper\" data-vilynx-id=\"7000370105\" data-test=\"VideoPlaceHolder\">\n<div class=\"InlineVideo-videoEmbed\" id=\"InlineVideo-0\" data-test=\"InlineVideo\">\n<div class=\"InlineVideo-wrapper\">\n<div class=\"InlineVideo-inlineThumbnailContainer\"><span class=\"InlineVideo-videoButton\"><\/span><span><\/span><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>Uncertainty makes investors jittery \u2014 and stock markets volatile \u2014 because they don&#8217;t know how policy and other events will impact companies&#8217; ability to make money, said Barry Glassman, a certified financial planner and founder of Glassman Wealth Services.<\/p>\n<p>Worried consumers might pull back on spending, crimping profits, for example. Tariffs raise costs for certain companies to import or produce goods \u2014 and it&#8217;s unclear how other nations might retaliate. While economists generally don&#8217;t think federal trade policy and job cuts will push the U.S. into recession, Trump hasn&#8217;t ruled out that possibility.<\/p>\n<p>&#8220;All of this comes down to corporate profits,&#8221; said Glassman, a member of CNBC&#8217;s Advisor Council. &#8220;People will put more dollars where they have greater confidence in the investments,&#8221; he added.<\/p>\n<\/div>\n<h2 class=\"ArticleBody-subtitle\"><a id=\"headline0\"><\/a>Many &#8216;unanswered&#8217; questions<\/h2>\n<div class=\"group\">\n<p>There&#8217;s always uncertainty in the stock market, but it may feel more acute right now than at other times, experts said.<\/p>\n<p>A recent (and perhaps counterintuitive) example of that uncertainty came on March 6, when President Donald Trump reversed course and delayed 25% tariffs on many imports from Canada and Mexico by a month. That delay came two days after the tariffs had taken effect.<\/p>\n<p>Despite that &#8220;reprieve,&#8221; the S&amp;P 500 sold off sharply during the day&#8217;s trading session, BeiChen Lin, senior investment strategist at Russell Investments, <a href=\"https:\/\/russellinvestments.com\/us\/blog\/tariff-uncertainty-markets-mwir\" target=\"_blank\" rel=\"noopener\">said<\/a> recently.<\/p>\n<p><strong>More from Personal Finance:<\/strong><br \/>Wholesale egg prices have &#8216;plunged&#8217;<br \/>How to manage your student loan payments after a layoff<br \/>Harvard announces free tuition for families making under $200K annually<\/p>\n<p>&#8220;There are still a lot of questions that remain unanswered,&#8221; Lin said.<\/p>\n<p>For example, Lin said, what would happen after the 30-day delay? How might Mexico and Canada respond? Will the U.S. impose tariffs on other countries or products?<\/p>\n<p>National Economic Council director Kevin Hassett warned Monday of &#8220;some uncertainty&#8221; over Trump&#8217;s tariff policy in coming weeks. Treasury Secretary Scott Bessent said last week that the Trump administration is more focused on long-term health of the U.S. economy instead of short-term volatility.<\/p>\n<\/div>\n<h2 class=\"ArticleBody-subtitle\"><a id=\"headline1\"><\/a>&#8216;It&#8217;s all based on emotion&#8217;<\/h2>\n<div class=\"group\">\n<p>Brad Klontz, a certified financial planner and behavioral finance expert, said he thinks the stock market turmoil ties into something more primitive than corporate profits: Human psychology.<\/p>\n<p>&#8220;Quite frankly, it&#8217;s all based on emotion,&#8221; said Klontz, managing principal of YMW Advisors in Boulder, Colorado, and a member of CNBC&#8217;s Advisor Council.<\/p>\n<p>&#8220;We like to feel like we can predict the future. When we feel the future is unpredictable, when we don&#8217;t have faith in our leaders, that&#8217;s when we start to panic,&#8221; Klontz said.<\/p>\n<p>&#8220;There&#8217;s a ton of fear&#8221; right now, he added.<\/p>\n<\/div>\n<div role=\"region\" aria-labelledby=\"Placeholder-ArticleBody-Video-108116797\">\n<div role=\"button\" tabindex=\"0\" id=\"Placeholder-ArticleBody-Video-108116797\" class=\"PlaceHolder-wrapper\" data-vilynx-id=\"7000369839\" data-test=\"VideoPlaceHolder\">\n<div class=\"InlineVideo-videoEmbed\" id=\"InlineVideo-0\" data-test=\"InlineVideo\">\n<div class=\"InlineVideo-wrapper\">\n<div class=\"InlineVideo-inlineThumbnailContainer\"><img decoding=\"async\" class=\"InlineVideo-videoThumbnail\" src=\"https:\/\/image.cnbcfm.com\/api\/v1\/image\/108116798-17422137861742213783-38938796800-1080pnbcnews.jpg?v=1742213785&amp;w=750&amp;h=422&amp;vtcrop=y\" alt=\"Ed Yardeni reveals why he's lowering his S&amp;P 500 year-end target to 6,400\"><span class=\"InlineVideo-videoButton\"><\/span><span><\/span><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>Amid fear, it&#8217;s important for investors to put the recent market moves into perspective, advisors said.<\/p>\n<p>A 10% pullback isn&#8217;t shocking after two consecutive years of annual stock returns exceeding 20%, Glassman said.<\/p>\n<p>&#8220;This is normal,&#8221; Glassman said of the market&#8217;s temper tantrums.<\/p>\n<p>However, investors often make bad financial choices by engaging in catastrophic thinking (believing the markets may never recover, for example), Klontz said. They buy high and sell low, he said.<\/p>\n<p>Historically, the market has always bounced back higher.<\/p>\n<p>&#8220;If you lost $40,000, you have to ask yourself, did you really lose it?&#8221; Klontz said. &#8220;If you didn&#8217;t sell, I&#8217;m not sure you lost it. If you sold, you guaranteed lost that $40,000.&#8221;<\/p>\n<\/div>\n<h2 class=\"ArticleBody-subtitle\"><a id=\"headline2\"><\/a>Focus on what you can control<\/h2>\n<div class=\"group\">\n<p>During times of uncertainty, investors should focus on what they can control, Klontz said.<\/p>\n<p>It&#8217;s a good time for investors to look at their asset allocation, and ensure their overall stock-bond holdings haven&#8217;t gotten too risky or conservative over time, for example, Klontz said.<\/p>\n<\/div>\n<div class=\"group\">\n<p>The recent volatility has also shown the value of diversification among different asset classes in an investment portfolio, Glassman said.<\/p>\n<p>For example, international stocks in both <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-20\">developed<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> and <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-21\">emerging<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> markets are up this year, even though U.S. stocks are down, Glassman said. Bond returns have also been <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-22\">positive<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span>, he said.<\/p>\n<p>Ultimately, investor behavior is the biggest threat to stock returns, not the federal government, Klontz said.<\/p>\n<\/div>\n<\/div>\n<p><a href=\"https:\/\/www.cnbc.com\/2025\/03\/19\/why-uncertainty-makes-the-stock-market-go-haywire.html\" target=\"_blank\" rel=\"noopener\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Traders on the floor of the New York Stock Exchange on March 14, 2025, at the opening bell.\u00a0 Timothy A. Clary | Afp | Getty Images Uncertainty isn&#8217;t in short supply these days \u2014 and investors have taken notice. See-sawing policy from the White House has given investors whiplash on many fronts \u2014 with tariffs<\/p>\n","protected":false},"author":1,"featured_media":12267,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[196],"tags":[5073,94,222,2066],"class_list":{"0":"post-12266","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance-news","8":"tag-haywire","9":"tag-market","10":"tag-stock","11":"tag-uncertainty"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/12266","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12266"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/12266\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/12267"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12266"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12266"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12266"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}