Trade war threat leads Wall Street to its worst start to a year since 2022

A few months ago, Wall Street welcomed Donald Trump's victory with open arms. However, the threat of the world trade war initiated by the Republican's tariff announcements have led the major stock indexes to see the worst first-quarter performance in years.

The volatility triggered by each new announcement of tariffs—whether their imposition or the subsequent delay in their enforcement—on foreign products seeking entry into the U.S. market has severely impacted investors. Many have turned to safe-haven assets like gold, which has repeatedly broken its all-time high this year, reaching $3,150 per ounce on Monday.

Nvidia and Tesla, Nasdaq's main drags

The benchmark S&P index has shed 4.6% in the first three months of the year. This represents the worst start to the year since 2022, but also the worst quarterly record since September of that same year. The main stock market analysis firms have significantly lowered the expected earnings of the index for 2025 and even the specter of recession is once again haunting the trading floors.

Things are even worse for the Nasdaq. The technology index dropped 10% in the first quarter of 2025, also its worst quarterly performance since 2022. Stocks such as Nvidia have lost around 20% of their value while Tesla has suffered a drop of more than 35% in its share price.

Tension among investors on the eve of 'Liberation Day'

Although with smaller losses, the Dow Jones is also having a difficult start to the year. At the close of March, the index was down 1%, dragged down especially by a horrible March in which it has seen 2.75% of its value evaporate.

Investor tension is at its highest on the eve of "Liberation Day," as Trump called the day when most of the reciprocal tariffs take effect, scheduled for April 2.