Last month, investor angst accelerated when market participants realized that Trump tariffs would escalate. Markets are pricing in not only tariffs in place but also their escalation. Nasdaq (QQQ) closed down by 2.47% on the week and 11.31% below its 52-week reached in February.
When will this correction end?
The retail heavyweights failed to hold their all-time highs. Walmart (WMT) and Costco (COST) lost 17.6% and 15.1%, respectively. Dollar Tree (DLTR) management said that it has risk mitigations in place for tariffs in 2025. However, many of its customers reported that they only have enough money for essentials. Some customers needed to sacrifice even that.
Investors may infer that special retail firms could continue to trade lower throughout this year. Still, Ulta Beauty (ULTA) added $43.01 to its stock price to close at $357.48. Estee Lauder (EL) indicated a “double bottom” bullish pattern at $66.50. Speculators are betting that shares of luxury goods companies are at bargain prices.
Consumer sentiment fell to 57.9% this month, a 2.5-year low. Consumers raised their expectations for inflation, citing tariffs and trade wars. They are expecting those headwinds will undermine the economy. Reuters/Ipsos conducted a poll on March 11-12. 57% of those surveyed believed that Trump’s policies were too erratic.
The business community is also raising concerns, too. U.S. small business confidence fell for three straight months in February. Investors should watch out for the small-cap heavy iShares Russell 2000 ETF (IWM) to trade lower.
