Market Commentary
The first quarter of 2025 presented significant headwinds for U.S. equities, driven by aggressive trade policies and escalating geopolitical tensions. These factors triggered a shift in investor sentiment, stoking inflation fears and uncertainty that caused both corporations and consumers to pull back on typical planning and spending behavior.
The S&P 500 declined 4.28% for the quarter, with a sharp 5.63% drop in March erasing earlier gains. The Nasdaq 100 fell 8.07%, pressured by a broad sell-off in technology stocks, particularly in the AI sector, where growth expectations began to cool and “sell your winners” became a theme. The Russell 2000 declined 9.48%, highlighting the heightened sensitivity of small-cap stocks to economic instability.
Elevated volatility led to a rotation out of U.S. risk assets and into defensive sectors, as well as foreign markets—which began to outperform U.S. equities. Gold, a traditional safe haven, surged 17.02% to new all-time highs. Historically, such market stress would bolster demand for U.S. Treasuries but confidence in the Trump administration’s economic strategy has led to a “growth scare;” the Bloomberg U.S. Aggregate Bond Index rose 2.78% in the quarter. The U.S. dollar also weakened against most major currencies, reflecting broader skepticism and shifting capital flows.
Advice Corner
Explore our 1st Quarter 2025 articles on why gold can be a wise investment, ways to invest in energy, 2025 retirement contribution limits, the benefits of active and passive investing, solo 401(k)s and capital gains tax.
- Why Gold Can Be a Wise Investment in Today’s Uncertain Times – Gold is a tangible asset that offers a hedge against inflation and the weakening purchasing power of fiat currencies. Explore the bull case for gold and why it could be a smart addition to your investments, especially during economic uncertainty in our article.
- 7 Ways to Invest in Energy in a Changing Landscape – Investing in energy can be a dynamic way to capitalize on growing and changing global energy demands. And it isn’t just about owning oil company stocks! To get started, read our article about seven common ways to invest in energy.
- 2025 Retirement Contribution Limits: What You Need to Know – Contribution limits dictate the maximum amount of money that can be deposited into your retirement account for the year. How will the latest contribution limits impact your retirement savings for the year ahead? We break down the numbers in our article.
- Active or Passive Investing? Navigating Market Cycles with Confidence – When it comes to investing in public markets, one of the most debated topics is the choice between active and passive investing. Read about the advantages and drawbacks of each approach here.
- Solo 401(k): A Breakdown of the Self-Employed Retirement Plan – Being self-employed offers many liberating perks, but it also means you don’t have the luxury of an employer-sponsored retirement plan. Enter the solo 401(k)! Read about how this plan can be a great option for maximizing your retirement savings if you are self-employed.
- What Is Capital Gains Tax & Why Do You Have to Pay It? – Read our article for a simple breakdown of what capital gains tax is and how it works.
For more information, contact the Carlson Team today!
Carlson Investments does not provide tax, legal, or accounting advice. This content has been written for informational purposes only. Always consult your individual tax, legal, or financial professionals for advice tailored to your situation.
Let's Talk
Finding a better way doesn’t start with you learning about investment strategy. It starts with us learning about you.
Let’s get started.
Contact Us