Amid tariff volatility in markets, how we got here and how it hits you

Understanding the market turmoil caused by President Donald Trump's trade war, how it may impact you and your investments, and what you should do about it, according to experts.

The trade war brought on by U.S. President Donald Trump’s tariffs has sent a ripple effect across the globe, leading to economic volatility and a lot of red on markets.

Within the past several months, and especially the last week, stock markets have erased trillions of dollars in value.

Many Canadians may be wondering if they should be hitting the “sell” button before losing more value on their investments, or at the very least are concerned about what the market turmoil means for their families and their livelihoods.

“The current market sell-off is in direct response to erratic trade policies pursued by the Trump Administration over the past few months and especially the press conference last Wednesday,” said Peter Morrow, an economics professor at the University of Toronto.

“An increased probability of recession in the United States might be making investors less optimistic about corporate profits, also pulling down market prices.”

Major stock indexes on Wall Street, including the Dow Jones Industrial Average, the S&P 500, and the NASDAQ, have fallen more than 10 per cent from recent highs, or a market correction.

The NASDAQ has entered a bear market, which is a 20 per cent decline from its peak, and so have many stock markets internationally, including in Hong Kong and Japan.

The so-called “Magnificent Seven” stocks (Microsoft, Meta Platforms, NVIDIA, Apple, Amazon, Tesla and Alphabet) are down closer to 30 per cent from their highs.