The

Financial

Quarterly

Quarter 1 2025

Art Creel

Carmichael Creel Investments

Markets experienced a turbulent first quarter, with stocks swinging from new highs to sharp declines amid concerns about tariffs and the broader economy.¹

Does a recession or bear market lie ahead?

Let's take a look at what happened in Q1 and what it could signal for the months to come.

Looking Back

How Did Markets Perform Last Quarter?

S&P 500

-4.6^%

The broad market index logged its worst quarter since 2022.¹

NASDAQ

-10.4^%

The tech-focused NASDAQ plummeted as investors turned pessimistic.²

DOW 30

-1.3^%

The blue-chip Dow fell as tariff fears bruised stocks.¹

Looking Ahead

What Factors May Influence Markets in the Months to Come?

We may be facing economic headwinds in the second quarter, and markets are likely to remain volatile as investors digest news and look for clarity. Let's take a look ahead at some of the factors that we'll be watching in the weeks and months ahead.

Tariffs

Jittery investors worry that tariffs could kick off a trade war that raises prices for Americans and hurts demand for U.S. goods. A more moderate trade policy may give markets a boost; uncertainty is likely to drive markets lower.²

Economic Data

Investors will be closely watching reports on inflation, consumer spending, and other indicators to gauge how tariffs are impacting different sectors of the economy.

Recession Indicators

Many economic fundamentals remain strong, but recession risks are rising. A growing number of analysts believe economic growth may contract in 2025, so we'll be watching the data closely.⁴

Interest Rates

Analysts currently expect the Federal Reserve to lower interest rates again in 2025. However, if inflation remains at its current level or increases, the case for lower rates may weaken, which could cause markets to pull back.⁵

"A bumpy path may lie ahead for markets."

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Bottom Line

Key Takeaways for Savvy Investors

What conclusions should we draw from a rocky first quarter of 2025?

Markets hate uncertainty. And more may lie ahead.

Tariffs and policy drove much of the volatility in Q1; while we're hoping for more clarity and moderation as tariff policies are enacted, we're prepared for volatility and pullbacks.

Will we still see a recession in 2025?

Economic risks are rising and a recession may be on the horizon.⁴

Analysts worry that tariffs may cause higher prices, which might cause cautious consumers to close their wallets.

Businesses impacted by tariffs could cut expenses and rein in investments, potentially causing the job market to cool.

The Federal Reserve has the ability to lower interest rates to encourage business activity, though it's possible higher inflation may keep the Fed on the sidelines.

But the news ahead isn't all bad, and a recession isn't guaranteed.

Recent market declines have reduced valuations, offering potential opportunities to those who look for them.

Many of the hardest-hit sectors are the ones that rose highest during the tech-driven run-up of the last two years.⁶

Companies that depend on domestic demand may be more insulated from the impact of tariffs than those with international sales exposure.

Bottom line: we're watching the data closely and staying flexible amid the uncertainty.

Questions about markets or your portfolio? Please reach out. I'd be happy to chat.

Art Creel

Carmichael Creel Investments

(615) 595-5825

art@carmichaelcreel.com

Sources:

1. CNBC, 2025 [URL: https://www.cnbc.com/2025/03/31/stock-market-today-live-updates.html]
2. NBC News, 2025 [URL: https://www.nbcnews.com/business/markets/stocks-close-worst-quarter-2022-tariff-uncertainty-rcna198956]
3. AP News, 2025 [URL: https://apnews.com/article/trump-tariffs-china-trade-4e130e740f3955feccec226d6c0084d9]
4. WSJ, 2025 [URL: https://www.wsj.com/economy/in-matter-of-days-outlook-shifts-from-solid-growth-to-recession-risk-027eb2b4]
5. AP News, 2025 [URL: https://apnews.com/article/fed-federal-reserve-rates-trump-tariffs-inflation-prices-a9008f1bb081093cd149967e3e637c7b]
6. CNBC, 2025 [URL: https://www.cnbc.com/2025/03/10/nvidia-down-30percent-from-high-as-tech-led-sell-off-hits-magnificent-seven.html]

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