A Bank of America survey shows a record number of investors are selling US stocks|yuan2003|CC BY-NC-2.0

On the last trading day of the first quarter yesterday, the S&P 500 and Nasdaq composite marked a turbulent Q1.

The Nasdaq plunged more than 10% after it recently peaked. The tech-focused index is already in correction territory. The S&P 500 is also struggling; it dropped 5.8% in March.

Concerns over tariffs and economic uncertainty weighed on markets.

The Trump administration’s trade policies have raised inflation worries and lowered growth expectations. As a result, investors are shifting their focus to Europe, where new spending plans could boost economic growth.

Goldman Sachs analysts revised their S&P 500 forecast, predicting another 5% drop in the next three months. They also estimate a one-in-three chance of a US recession if tariffs continue to pressure the economy.

Meanwhile, the Federal Reserve is monitoring inflation and economic growth, with investors expecting three interest rate cuts in 2025.

European stocks are performing better
On Monday, US stocks fell sharply before rebounding in the afternoon, marking the S&P 500’s biggest intraday recovery in two years. Despite this, the index remains down 4.6% this quarter, trailing European markets.

The Stoxx Europe 600 has surged ahead, outperforming the S&P 500 by 9.8 percentage points—the largest gap since 2015.

European defense stocks, such as Germany’s Rheinmetall and France’s Thales, have jumped 100% and 77%, respectively, as countries increase military spending.

Investors shift away from US stocks
A Bank of America survey shows a record number of investors are selling US stocks. At the same time, demand for European stocks has risen, reaching its highest level since 2021.

While some see Europe’s rise as temporary, others believe policy changes could sustain its growth.

Market uncertainty remains
Gold prices have jumped 19%, signaling investor caution. While consumer confidence has weakened, the labor market remains strong. Many believe a clearer trade policy could restore market confidence and provide much-needed stability.