Global financial markets are experiencing significant upheaval this year, largely influenced by President Donald Trump’s escalating trade war. Although markets have not reached a full state of panic, the considerable declines in major U.S. stock indexes are causing widespread concern. U.S. markets had enjoyed a two-year period of substantial growth leading into 2025, yet many observers felt stock prices had become excessively high. The trade war has amplified these concerns, leading to a 13% drop in the S&P 500, while U.S. markets lag behind those in Europe, Asia, and other regions.
Investment in traditional “safe havens” such as U.S. Treasuries and the dollar has become unpredictable, with the dollar hitting a three-year low and U.S. Treasury yields climbing, contrary to the typical pattern where yields would decrease as investors seek safety. This shift suggests that U.S. Treasuries may no longer provide the secure refuge they once did. In contrast, gold has maintained its status as a reliable safe haven, with prices continuously reaching new record highs.
Stocks
U.S. stocks have been experiencing a sharp decline following two years of impressive gains. The S&P 500 index, a key indicator of market health, has decreased by more than 13% in 2025, following over 20% growth in both 2023 and 2024. The index is now officially in a “correction,” having fallen over 10% from its February record. With only five weeks of positive results this year, it is edging closer to a bear market, marked by a 20% drop from recent highs. The Nasdaq composite, focused on growth, has seen an even larger decline of 19%. International markets have generally performed better than those in the U.S.
Bonds
The bond market, typically seen as a lower-risk investment area, has been volatile throughout the year. The yield on the 10-year Treasury, which impacts mortgage rates and other loans, peaked at 4.80% in January before dropping, only to rise again after Trump outlined tariff plans in early April. The recent surge in bond yields, which move inversely to bond prices, highlights rising fears about inflation and a possible recession. Traditionally, bond and stock prices move in opposite directions, but their simultaneous decline points to a worrying loss of confidence in the U.S. as a secure investment locale.
Gold
Amid economic uncertainty, gold has been on an upward trajectory, reaching unprecedented levels in 2025. The price of New York spot gold reached another all-time high on Thursday, closing at approximately $3,343 per Troy ounce. Gold futures also rose to over $3,432 on Monday. The demand for gold typically increases during uncertain times, although some volatility can still occur. For instance, the price of spot gold dipped after Trump’s “Liberation Day” announcement on April 2 but subsequently recovered.
Foreign Exchange
The U.S. dollar, the world’s reserve currency, is weakening under the strain of tariff-related uncertainty, inflation concerns, and questions regarding the U.S. economy’s direction. The dollar has decreased by an unprecedented 9% this year compared to a basket of other currencies, including the euro, Japanese yen, Canadian dollar, and Swiss franc. A weaker dollar complicates borrowing for the U.S. government, businesses, and consumers, reducing purchasing power and potentially hindering economic growth.
Oil
In the energy sector, there are mixed developments. The average U.S. gasoline price on Monday was $3.15 per gallon, a significant reduction from $3.67 at the same time last year. While lower energy prices can benefit consumers, they also suggest an anticipated economic slowdown, as factories produce less, families cut vacations, and businesses trim travel costs. Oil prices have hit a four-year low amid concerns over tariffs’ impact on global economic growth. West Texas Intermediate crude, the U.S. benchmark, was around $63 per barrel on Monday, down nearly 14% this year, while Brent crude, the European standard, was just above $66, marking a near 13% decline since the start of 2025. Economists warn that the steep tariffs pursued by Trump could trigger a recession, affecting the energy sector’s supply chain and employment.
Bitcoin
Bitcoin continues to experience extreme fluctuations. The leading cryptocurrency has been volatile since the beginning of the year, surging to over $109,000 before Trump’s inauguration in January, then falling below $75,000 amid broader market sell-offs this month. As of midday Monday, bitcoin’s price exceeded $88,000, according to CoinMarketCap. Despite being more than $6,000 lower than at the start of 2025, it remains significantly higher than in recent years. Around this time last year, bitcoin was trading at approximately $65,000, and in April 2023, following the collapse of FTX in late 2022, it was under $30,000. Trump, initially skeptical of cryptocurrency, has become a major supporter, recently signing an executive order to establish a government bitcoin reserve.
