Stocks have worst quarter since 2022, raising doubts about Trump’s economic playbook

Stocks rallied on Tuesday, with the S&P 500 closing up 2.9%, the Nasdaq up 3.8% and the Dow gaining 1,125 points.

Subscribe to read this story without ads

Get ad-free articles and exclusive content.

But this very good day capped a very bad month for US rates. The S&P 500 fell 5.09% in March, and the Nasdaq Composite fell 4.75%.

The US-Israel war against Iran and the impending blockade of the Strait of Hormuz, a narrow, Iranian-controlled passage through which a fifth of the world’s crude oil passes every day, weighed heavily on markets throughout the month.

Tuesday was also the end of the first quarter of the year, as the S&P 500 and Nasdaq posted their worst annual start since 2022, as Russia’s invasion of Ukraine rattled markets.

For the first quarter, the S&P 500 fell 4.6% and the Nasdaq fell 7.1%.

On the other hand, oil prices rose last month, raising the price of fuel and causing a strong effect of higher prices worldwide.

Brent, the international benchmark for oil, posted its biggest monthly gain, after rising more than 60%. The price of US West Texas Intermediate crude oil also rose in March, climbing more than 50% to its biggest one-month gain since 2020.

For millions of US drivers, the increase appears to be higher gas prices. And here too, last month was amazing. The average price of gasoline unexpectedly reached $4 per gallon on Tuesday, up more than 34% in just four weeks.

But it’s not just gas prices that are hitting US households this month.

More than half of US adults own stocks, mostly through their retirement accounts and the broader funds that managed accounts invest in.

But March was a different story.

“Stocks are following the lead of oil prices at a pace that has not been seen in the past few weeks, and if the US were to leave the Middle East and the Strait remains closed, energy markets would remain under pressure, keeping prices high,” Bespoke Investment Group analysts wrote Tuesday.

They added: “Longer prices are higher and supplies are reduced, which will be worse for the global economy and ultimately commodity prices.”

The wild market volatility of the second Trump administration is very different from how Donald Trump has said the markets will react if he is elected for a second term in 2024.

“There are a lot of people who say the only reason the Stock Market is up is because I’m leading in every Election, and if I don’t win, we’re going to have a CRASH like 1929,” Trump wrote on Social Truth in May 2024 while campaigning for the presidency.

Shortly after his re-election in 2024, Trump was asked if he believed stock market indexes were good measures of his performance in office. “To me … everything together, it’s very important,” he told CNBC.

But in the first 14 months of his second term, America’s stock market has faced its worst crisis in history.

In February and March of last year, Trump’s aggressive tariff policies rocked the market, pushing the S&P 500 to its seventh-fastest correction of all time. A correction is when a stock or index falls 10% from its most recent high.

More than a year later, the S&P 500 is not far from doing it again. As of Tuesday’s closing bell, the index is down 6.7% from as recently as January.

As oil prices rise, stocks often fall as higher oil prices lead to higher prices across many sectors of the industry over time.

Currently, inflation is rising all over the world. On Tuesday morning, inflation in the eurozone reached 2.5%, from 1.9% last month, according to the European Central Bank.

On Tuesday, Japan’s Nikkei 225 posted its worst month since 2008. In Europe, the Stoxx 600 index posted its worst month since 2022.

Two close corrections in more than a year show how the management’s strategies were not changing for the markets.

However, since Trump took office for the second term, the S&P 500 has risen by 8%, although last year global stocks outperformed the broader US index.

By 2025, global stocks as measured by the MSCI ACWI ex USA index rose nearly 30%, while the US rose 16%. Global stocks have not beaten US stocks by as much in the first year of a president’s term since 1993, according to data from Bloomberg.

In recent weeks, Trump has repeatedly cited the Dow’s 50,000 as a sign that the markets are doing well during his presidency.

“You know, it’s kind of crazy, I hit 50,000 in the Dow,” Trump said at an investment conference in Florida on Friday. “People said that would not be possible in four years.”

“And we hit 7,000 in the S&P,” Trump added. “People said it’s more difficult to hit 50,000 in the Dow.”

As of Tuesday, the Dow was down more than 3,600 points from its high of 50,000, down about 7.5%.