In recent weeks, the financial landscape has been reshaped by a series of bold policy moves and volatile market reactions. Here at Stonewater Financial, a Los Angeles-based wealth advisory firm, we’re closely tracking these developments to guide our clients through an increasingly complex economic environment. Below, we break down the latest news on tariffs, the controversial Department of Government Efficiency (DOGE), and the US stock market, offering insights into what this all means.
Tariff Escalations: A New Trade Landscape
The Trump administration has rolled out aggressive tariff policies targeting key trading partners. Steel and aluminum imports from Canada now face a 50% tariff, which was recently doubled to 50% in response to Ontario’s electricity surcharge. Imports from Mexico and Canada are also hit with 25% tariffs, though some goods compliant with the USMCA trade agreement remain exempt until April 2. Meanwhile, Chinese imports are seeing a 20% tariff increase, escalating tensions with one of the world’s largest economies.
Economists are sounding the alarm. Reports from Goldman Sachs and Morgan Stanley have slashed their 2025 US GDP forecasts to 1.7% and 1.5%, respectively, down from earlier projections of healthier growth. Inflation is another concern, with Goldman Sachs predicting the Federal Reserve’s preferred gauge could hit 3% by year-end. Perhaps most troubling, the Atlanta Fed’s GDPNow model forecasts a -2.4% growth rate for Q1 2025, raising the fear of a recession.
Globally, the response has been swift. Canada is mulling retaliatory measures, Mexico is pushing USMCA-compliant exports to sidestep some of the damage, and China has slapped counter-tariffs on US goods, hitting American farmers particularly hard. News outlets like Reuters and The New York Times have highlighted how these moves could disrupt supply chains and increase costs for consumers and businesses alike.
Do these potentially harsh whiplash-inducing measures signify a long-term trend with longer term growing pains or a short term sacrifice with calculated risk and delayed gratification?
DOGE: Elon Musk’s Controversial Experiment
Enter the Department of Government Efficiency (DOGE), a new agency led by Elon Musk aimed at slashing federal bureaucracy and reducing the US deficit. While the White House boasts “trillions” in investment pledges from CEOs—tied to DOGE’s deregulation push—the initiative has sparked fierce debate. On platforms like X, some speculate it could trigger an economic “de-tox” or even pressure the Federal Reserve into rate cuts. Others, as noted by The Guardian and NPR, see it as a politically charged move with questionable economic grounding.
The backlash has been tangible. Protests against Musk’s involvement have escalated, with Al Jazeera reporting vandalism and violence targeting Tesla properties. For investors, DOGE represents both opportunity and uncertainty—its outcomes could reshape government spending and regulation, but the path forward remains murky.
Stock Market Volatility
The US stock market has not taken these developments lightly. The S&P 500 has lost $ 4 trillion in value since its recent peak, wiping out post-inauguration gains. The Nasdaq suffered its worst day since September 2022, plunging 4%, while the Dow has also retreated. Tech giants like Tesla and Nvidia have borne the brunt, with Tesla’s stock dropping a staggering 15% in a single session, according to Yahoo Finance.
Market fear is palpable—the VIX index has spiked to 26.70, its highest since December, signaling heightened investor anxiety. Yet, not all assets are suffering: gold prices have surged 10% in 2025, a classic flight to safety amid the turmoil.
Sources
- https://www.cnn.com/2025/03/12/economy/trump-steel-aluminum-tariffs-hnk-intl/index.html
- https://www.theguardian.com/us-news/2025/mar/11/trump-double-canada-tariffs
- https://www.reuters.com/world/us/trump-says-no-exemptions-steel-aluminum-tariffs-2025-03-17/
- https://www.whitehouse.gov/presidential-actions/2025/01/establishing-and-implementing-the-presidents-department-of-government-efficiency/
- https://nypost.com/2025/03/13/us-news/elon-musk-doge-ordered-to-release-internal-records-explain-mass-slashings-and-firings/
- https://www.sfchronicle.com/opinion/openforum/article/doge-privacy-violations-20213726.php
- https://www.reuters.com/markets/us/futures-slip-treasury-secretarys-comments-eyes-upcoming-fed-meet-2025-03-17/
- https://www.reuters.com/breakingviews/us-tariff-tantrum-threatens-pricing-progress-2025-03-12/
Disclaimers.
*The Russell 1000 Index consists of the 1,000 largest companies by market capitalization in the Russell 3000 Index, which represents approximately 90% of the total market capitalization of the Russell 3000 Index. It is a large-cap, market-oriented index and is highly correlated with the S&P 500 Index. Indexes are unmanaged and cannot be invested in directly.
** The S&P 500 is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States. Indexes are unmanaged and cannot be invested in directly.
The opinions expressed in this material do not necessarily reflect the views of LPL Financial.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.
