US stocks have tanked sharply in recent weeks amidst concerns that higher tariffs under the Trump administration could lead to a global trade war.

Additionally, markets are worried that President Trump’s policies could also lead to a recession.

In total, the S&P 500 has lost nearly 10% since February 19, leaving investors wondering when the bleeding might finally stop and when it is appropriate to call the bottom.

While the longer-term outlook for US equities remains uncertain, there’s reason to believe that the sell-off is over now, at least for the near term.

What the fear gauge is telling us about the market sell-off

“VIX” or the CBOE Volatility Index that’s broadly known as the market’s fear gauge has more than doubled versus its year-to-date low and printed a new high of 29 on Monday.

Plus, the index’s curve has inverted recently, which means near-term contracts are now priced higher than contracts further out.

The unusual VIX curve inversion further indicates very high levels of fear in the near term that have historically signalled a short-term tradable bottom.

Note that the benchmark S&P 500 index has now given back more than half of the gain it had accumulated over the past seven months (since early August of 2024).  

What to expect from the US stocks longer term

While the US stocks now look positioned to see some buying pressure in the near term, investors should remain cautious since the longer-term forecast remains foggy at best.

That’s because the sell-off is now related more to broader concerns of a possible recession ahead.

Trump tariffs could disrupt supply chains and increase costs for businesses this year, which they may pass on to consumers, leading to reduced spending – a notable driver of economic growth.

On the other hand, countries like Canada, Mexico, and China have already announced retaliatory tariffs that will likely hurt demand for US exports as well.

Together, these factors may lead to an economic slowdown, potentially resulting in further decline in the S&P 500.

Is the United States already in recession?

What’s also worth mentioning is that the recession debate may not be one for the future, according to Peter Berezin, chief global strategist at BCA Research.

Berezin started 2025 with a year-end target of 4,450 on the S&P 500. His worst-case scenario calls for the benchmark to revisit the 4,200 level this year as the US may already be in recession.

BCA sees increased probability of a recession under the new administration as “Trump would be very disruptive in some negative ways, most of which is trade.”

Peter Berezin never bought into the narrative that Trump would use tariffs to potentially negotiate better trade terms.

The US government actually needs the money to address its budget deficit, he argued in a recent note. 

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The price of natural gas currently sits at record levels amidst confidence the commodity will continue to drive strong demand from AI data centres.

On Tuesday, the vice president of Microsoft’s energy business, Bobby Hollis, said the titan was willing to use natural gas with carbon capture technology to power its artificial intelligence server farms.

Hollis’ remarks on a CNBC interview today bode well for natural gas investors as continued demand from AI companies could push natural gas prices further up in 2025.

Natural gas demand is rising fast

Natural gas remains an exciting investment proposition for this year as data centres globally are estimated to require up to 660 terawatt-hours (TWh) of power annually by 2035.

For reference, that translates to about 10% of the global demand for electricity at present.

“The market is screaming that we need more energy in this world,” said Toby Rice, chief executive of EQT, the largest pure-play producer of natural gas in the United States as he spoke with CNBC this week.   

Rice sees further upside in natural gas prices as the world continues to shift from coal to natural gas for electric power generation.

Still, EQT stock is down some 10% versus its year-to-date high at writing.

EQT stock is outperforming the AI names

CEO Toby Rice expects continued focus on artificial intelligence to serve as a meaningful catalyst for natural gas prices for the long term.

In fact, the correlation is so pronounced that investors have started seeing EQT stock as an AI play.

“We welcome all investors who see the value of natural gas. Not just what the value of natural gas is today, but decades into the future,” he added in the CNBC interview on March 10^th.

Investors should note that EQT shares, unlike the majority of tech stocks, are in the green at writing (year-to-date) despite a broader sell-off in AI stocks that has pushed the S&P 500 down some 10% over the past three weeks.  

Plus, EQT stock pays a dividend yield of 1.28% as well.

Should you invest in EQT shares today?

EQT stock may be worth owning at current levels due to the strength of its financials as well.

In February, the energy company reported Q4 earnings that topped Street estimates.

EQT reported earnings of 69 cents per share on $1.82 billion in adjusted operating revenue for its recently concluded quarter, surpassing analysts’ estimates of 50 cents per share and $1.72 billion in revenue.

That’s part of the reason why Wall Street remains bullish on EQT shares.

Analysts currently rate the New York listed firm at “overweight”.

Their average price target on EQT currently sits at $55.56 which indicates potential upside of about 13% from current levels.

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The ongoing trade tension between the United States and Canada saw signs of easing on Tuesday after President Donald Trump suggested he may reconsider plans to double tariffs on Canadian steel and aluminum following Ontario’s decision to suspend a planned electricity surcharge on exports to the US.

Trump’s remarks came shortly after Ontario Premier Doug Ford and US Commerce Secretary Howard Lutnick announced plans to meet in Washington on Thursday.

The two leaders described their earlier discussions as “productive,” with Ford emphasizing the need to deescalate tensions.

Ford acknowledged that “the temperature needs to come down,” calling his decision to halt the electricity surcharge the right move under the circumstances.

The on and off tariff war

Ontario Premier Doug Ford announced on Tuesday that his government would temporarily suspend the planned 25% surcharge on electricity exports to the United States.

The decision follows a conversation with US Commerce Secretary Howard Lutnick, during which both sides agreed to resume trade talks.

Ford described the discussion as productive and emphasized the importance of maintaining calm amid heightened trade tensions.

The Ontario government’s reversal came just hours after Trump announced on social media that he would double tariffs on Canadian metals and threatened steep levies on Canadian automobile parts starting April 2 if Ottawa did not drop tariffs on US dairy products and other goods.

Trump claimed the automobile tariffs would effectively shut down Canada’s auto manufacturing sector.

He also repeated his view that Canada should become part of the US, which he argued would eliminate trade disputes altogether.

Trump’s remarks followed Canada’s announcement that Mark Carney would soon take over as prime minister.

Carney criticized the tariffs as “an attack on Canadian workers, families, and businesses” and vowed to respond in a way that would “maximize impact in the US and minimize disruption in Canada.”

Trump’s tariffs stoke recession fears

Global financial markets have faced heightened volatility and geopolitical concerns following President Donald Trump’s return to the White House, with economists cautioning that the US may be at risk of a recession.

In an interview on Fox News’ “Sunday Morning Futures,” Trump avoided directly addressing the possibility of a downturn, saying, “I hate to predict things like that. There is a period of transition because what we’re doing is very big.”

Markets reacted negatively on Monday, with the Dow Jones Industrial Average sliding over 1,000 points, or 2.4%.

The S&P 500 dropped 2.8%, while the Nasdaq Composite declined 5% as major tech stocks faced significant losses.

Despite concerns, Commerce Secretary Howard Lutnick downplayed recession fears.

Speaking on NBC’s “Meet the Press,” Lutnick said Americans should “absolutely not” expect a downturn, emphasizing Trump’s reciprocal tariff strategy.

“There’s going to be no recession in America. … Global tariffs are going to come down because President Trump has said, ‘You want to charge us 100%? We’re going to charge you 100%,” Lutnick stated.

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The market ended Tuesday’s session lower despite staging a partial recovery in the final hour of trading.

Concerns about the global economic outlook and fears of a potential recession, driven by ongoing trade tensions, weighed on investor sentiment throughout the day.

The Dow Jones Industrial Average dropped 478.23 points, or 1.14%, to close at 41,433.48.

The index fluctuated significantly during the session, hitting a low of 41,175.37 and reaching as high as 41,868.27 before settling lower.

The S&P 500 declined 42.49 points, or 0.76%, to finish at 5,572.07.

Meanwhile, the Nasdaq Composite slipped 32.23 points, or 0.18%, to 17,436.10. The tech-heavy index had rebounded to 17,687.40 in the final hour, recovering from an earlier low of 17,238.24.

President Donald Trump downplayed concerns about the recent market decline, stating, “Markets are going to go up and they’re going to go down but, you know what, we have to rebuild our country.”

His comments came after the Dow fell 890 points and the S&P 500 dropped 2.7% on Monday.

During a Fox News interview on Sunday, Trump declined to rule out the possibility of a recession, which added to investor concerns.

Markets show some signs of recovery

Investor sentiment showed signs of improvement late in the session after President Donald Trump signaled a possible reversal of his plan to double tariffs on Canadian steel and aluminum.

The shift followed Ontario Premier Doug Ford’s decision to suspend a proposed 25% surcharge on electricity exports to the US.

Ford’s announcement came ahead of a scheduled meeting on Thursday between U.S. Commerce Secretary Howard Lutnick and Ford to discuss the North American trade agreement.

A senior White House official confirmed that the higher tariffs on Canadian steel and aluminum imports would not take effect as initially planned, providing a brief lift to the markets.

Despite the late-day recovery, broader concerns about economic growth persisted.

The Labor Department reported that US job openings rose to 7.74 million in January, exceeding expectations and improving from a downwardly revised figure of 7.51 million in December.

Economists had forecast a smaller increase to 7.63 million.

Investors are now awaiting key economic data later in the week, including reports on consumer and producer price inflation, as well as consumer sentiment and inflation expectations, which could offer further insights into the economic outlook.

Movers on Tuesday

Delta Air Lines cut its earnings outlook on Tuesday, citing weaker US demand, which added to recession concerns and pushed its stock down 7.3%.

Travel-related stocks followed suit, with Disney and Airbnb both dropping 5%.

Several other major stocks also faced declines, including Verizon, Moderna, ResMed, Texas Instruments, IBM, Apple, Oracle, and Chevron.

In contrast, Southwest Airlines rose 8% after announcing plans to introduce a new basic fare tier.

Tesla gained over 3%, while Boeing, Netflix, Micron Technology, Salesforce, Wells Fargo, and Amazon also ended the day with gains.

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Asian stocks mostly gained on Wednesday, diverging from Wall Street’s choppy session as regional investors brushed off concerns over US trade policy shifts under President Donald Trump.

While Wall Street wavered on tariff uncertainty and recession fears, key Asian indices rebounded, led by strong performances in Japan and South Korea.

Japan’s Nikkei 225 rose 0.29%, while the Topix index gained 0.94%, recovering from losses in the previous session.

Nissan’s stock climbed 0.87% after CEO Makoto Uchida announced his resignation, paving the way for Ivan Espinosa to take over on April 1.

The automaker recently ended merger talks with Honda, but reports suggest discussions may resume after Uchida steps down. Honda shares dipped 0.21%.

South Korea’s Kospi index jumped 1.60%, with the Kosdaq advancing 1.64%, signaling investor confidence despite global uncertainties.

However, Hong Kong’s Hang Seng Index remained flat, while China’s CSI 300 slipped 0.27%.

Chinese government bond yields edged higher, with the 10-year yield hovering around 1.94% and the 30-year yield at 2.05% after crossing the 2% mark on Monday.

Tech stocks were in focus, with Robosense surging 18.28% in Hong Kong, while jewelry retailer Chow Tai Fook gained 7.15%.

Meanwhile, Australia’s S&P/ASX 200 slid 1.41%, tracking Wall Street’s losses.

India’s February inflation report is due later today, with economists expecting a sharp slowdown to 3.98% from 5.68% in January, which could influence the Reserve Bank of India’s monetary policy outlook.

Overnight, US markets tumbled as Trump’s surprise tariff hike on Canadian steel and aluminum—raising duties to 50% from 25%—rattled investors.

The S&P 500 fell 0.76% to 5,572.07, slipping into correction territory.

The Dow Jones Industrial Average lost 478 points (1.14%) to close at 41,433.48, while the Nasdaq Composite dipped 0.18% to 17,436.10.

Despite Wall Street’s weakness, Asia-Pacific markets showed resilience, with investors weighing global risks against regional growth prospects.

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