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The recent fluctuations in the market can largely be attributed to concerns over tariffs, inflation, and potential government spending cuts. With the administration's current tariff strategies, the market could see significant impacts.
Tariffs
Upcoming tariffs set to take effect on April 2 are crucial for investors to monitor. Historical patterns suggest that tariffs lead to increased costs for businesses, and companies may have to either absorb these costs or pass them on to consumers, which could further strain spending and contribute to rising inflation. The Peterson Institute for International Economics estimates that these tariffs could spike inflation by as much as 7% over the next year, potentially leading to a decrease in corporate earnings and, by extension, stock prices.