Global equity markets rallied strongly this week after the U.S. paused some tariffs, with the S&P 500 posting its biggest one-day gain since the 2008 financial crisis. Markets saw a powerful rebound midweek as U.S. President Donald Trump announced a 90-day suspension of reciprocal tariffs for countries that have not retaliated. The S&P 500 jumped 9.5% in a single session—its strongest one-day rally in over 15 years—reflecting renewed optimism that a full-scale trade war might still be avoided.
However, the positive momentum was somewhat dampened by targeted escalations against China. Tariffs on Chinese goods were raised to 125%, and smaller e-commerce parcels from China (under $800) saw duties tripled from 30% to 90%, affecting approximately $40–45 billion in annual trade. While the tariff pause applies broadly, tensions with China remain unresolved.
Not About Earnings—A Policy-Driven Pullback
What’s key to remember is that this recent market selloff has not been driven by company- specific weakness. Many of the businesses we invest in are still reporting solid earnings and continue to grow their revenues. The fundamentals remain intact.
We see this drawdown as a strategic entry point to buy high-quality companies we already own—now at better prices. Nothing about their long-term prospects has changed, but the market has presented us with a temporary discount. In our view, that’s exactly when long-term investors should lean in, not shy away.
Staying the Course in a Noisy Environment
The current environment is noisy, driven by geopolitical headlines, trade negotiations, and inflation data. That volatility can feel uncomfortable—but it also creates opportunity. Long-term themes like AI, clean energy, and healthcare innovation continue to drive real growth, regardless of short-term politics.
Rather than trying to time every twist and turn, we prefer to stay focused on the bigger picture. Diversified portfolios, phased entries, and a long-term horizon remain our playbook. History has shown that investing gradually when markets are more than 10% off their highs has outperformed cash in most one- and three-year periods.
Looking Ahead
Over the coming weeks, markets will likely remain sensitive to trade headlines and economic data. The upcoming U.S. March CPI release will be closely watched for signs of how inflation is evolving, especially with the full impact of tariffs still to come. Core services inflation remains elevated, and the Federal Reserve has already acknowledged that trade policy may exert a greater drag on growth than previously expected.
Conclusion: A Window of Opportunity
Despite the turbulence, our outlook for equities over the long term remains positive. The companies we own are resilient, continue to grow, and are well-positioned to benefit from structural trends.
While short-term volatility is likely to persist, we believe it’s important to avoid getting caught up in the noise. Staying focused on fundamentals and using these pullbacks to add to high-quality positions can set investors up for meaningful long-term gains.
We remain confident that today’s uncertainty will eventually give way to clarity—and with that, renewed strength in equity markets.
