March Mayhem!

Fiscal Focus | March 31, 2025

 March Mayhem:

The market in March was nothing but calm, with many investors' blood boiling. What began as a normal month with many investors reaping the rewards of the previous stock market rise quickly saw stock numbers fall, with some of the biggest names in the market, including Tesla, Apple, and Nvidia, posting steep losses. At the heart of the chaos? A messy mix of weak earnings, leadership drama, and a sudden jolt from the Trump administration’s renewed tariff war.

 Tesla’s Tough Month:

Tesla (TSLA) had a rough ride in the first quarter of the year, finishing March down roughly 30% from the start of the year. That’s a serious dip for a company that was once on an unprecedented rise.

  • Earnings Took a Hit: The company’s Q1(Jan, Feb, March) report showed a 71% drop in net income and a 20% decline in revenue. This indicates that EV demand is cooling, and Tesla is not valued as much anymore.

  • Leadership Issues: Elon Musk’s "controversial" appointment to Trump’s “Department of Government Efficiency” (DOGE) raised many investors' eyebrows. Investors were concerned about this being a potential distraction, and while Tesla decided not to consider a leadership change, the rumors were enough to shake investor confidence. 

  • Reputation Risk: Musk’s political alignment isn’t just making headlines; it has made many enemies among the common folk. Some customers are distancing themselves from the Tesla brand, and analysts say as much as 10% of the company’s global customer base may be turned off soon.

  • Losing Ground in Europe: Tesla’s grip on the EV market slipped, with Volkswagen overtaking it in numerous European regions. Sales in Germany and France tumbled, and the once untouchable Tesla is now much vulnerable.

Tech Under Pressure: 

Tesla wasn’t the only one hurt. Many tech stocks saw big drops:

  • Apple (AAPL) fell over 20%, with investors concerned by the impact of new Chinese tariffs on apples supply chain. There were also many rumored reports that these tariffs could increase iPhone products by 300%!

  • NVIDIA (NVDA) dropped close to 30%, as concerns grew that the AI boom might finally calm down.

  • Amazon (AMZN) lost 18%, with slowing AWS growth and higher fulfillment costs dragging performance, it also due mainly to the reported tariffs.

  • Meta (META) fell around 25%, facing new pressure in Europe and poor ad revenues.

Tariff Tuesday: Trump’s Big Move

Mid-March brought the biggest surprise yet: President Trump’s announcement of a massive 145% tariff on a broad range of Chinese goods. The market’s response was very instant, but very brutal.

  • Called “Tariff Tuesday,” the Dow lost over 1,300 points on March 19.

  • China responded quickly with its own countermeasures, hitting U.S. exports, including things such as semiconductors and agriculture.

  • Numerous trading experts fear we could be heading into another drawn-out trade war.

This policy whiplash sparked panic, especially in global manufacturing and tech. With supply chains already fragile, the fear of cost spikes and resource costs returned overnight.

Where Did That Money Go?

While numerous money was pulled out of tech stocks, safer bets like utilities and consumer staples held up surprisingly well. Investors piled into things such as:

  • Gold, which surged past $2,400/oz

  • Treasuries, with falling yields signaling a clear “risk-off” move.

 What Now?

No one knows for sure how long this "war" could last, but one thing that's been made clear is that the market’s patience is wearing thin.

  • Rate cuts from the Fed seem unlikely for now as inflation is still at large.

  • Corporate debt is rising, and a bad second quarter could force layoffs or restructuring among corporations.

  • If the trade war escalates further, we should expect the markets to become even more volatile as we head into Q2.

Still, there is light at the end of the tunnel. With prices down, long-term investors might find value in high-quality tech stocks that were dragged down by the broader panic.

Final Thoughts:
Tesla’s stumble goes to show how fragile the market can be. Unexpected policy moves and fading investor confidence show how quickly the market can turn. Whether this is a temporary setback or the beginning of a longer cooldown depends on what comes next from policymakers, CEOs, and consumers.

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