NASHVILLE (BP) — As global markets continued to reflect the uncertainty brought on by tariffs announced this week by President Donald Trump, representatives from GuideStone Financial Resources are encouraging calm and a focus on goals.
“The markets, in general, are digesting a tremendous amount of news — the tariffs, stubbornly higher inflation and eroding consumer confidence, which has trended down a fourth consecutive month,” said Brandon Pizzurro, chief investment officer at GuideStone. “These headlines are a lot to digest, and markets are responding accordingly.
“That said, retirement investors should continue to keep a long-term view in mind and realize that these short-term market moves, while unnerving for many, are not uncommon and a generally healthy rotation on the back of two consecutive 20%-plus years for the S&P 500.”
Proclaiming his announcement as “Liberation Day” on April 2, Trump adjusted U.S. trade deals with other nations around the world, causing significant turmoil. The S&P 500 dropped 4.8%, its biggest one-day decline since the COVID-19 pandemic in June 2020, while the Nasdaq Composite fell 6%. Several countries responded with retaliatory tariffs of their own, such as China’s 34% on U.S. goods. JPMorgan analysts increased odds of a global recession to 60%, more likely than not to happen this year.
Federal Reserve Chairman Jerome Powell said today that a period of higher prices and weaker growth was likely because of the larger-than-anticipated tariffs.
“While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent,” he said. “Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem.”
Pizzurro expressed something similar in his remarks issued by GuideStone.
“Historically, markets have rewarded those who have kept their long-term objectives in focus,” he said.
Earlier, Trump had expressed on social media his desire that the Fed would cut interest rates. Powell’s words indicate a focus on making changes only after prices increase and wages soften.
News on the markets overshadowed a jobs report that came in higher than expected as the Labor Department announced the addition of 228,000 jobs in March. Time will tell, though, how the tariffs will factor into that mark’s staying power even as the president posted that the news was proof his economic steps were working.
Amid discussions of recession, Pizzurro pointed out that the most recent fourth-quarter gross domestic product (GDP) estimate said the economy grew at a 2.4% annual rate, which was lower than the third quarter’s 3.1% but higher than initial estimates. Since 1980, he added, there have been 25 calendar years in which the S&P 500 experienced a drawdown of 10% or greater, but in 60% of those instances, the total return for the year ended in positive territory.
Jeff Robinson, director of GuideStone Advisors, pointed to the market’s cyclical nature. GuideStone members and ministry partners can call (888) 98-GUIDE (888-984-8433) with questions.
“This highlights the importance of planning so that wise investors should look at their goals, assure their investment allocation is appropriate given their age and risk tolerance, and continue investing during periods of volatility,” Robinson said. “Diversification, a monthly investment plan (commonly referred to as dollar-cost averaging) and a long-term strategy are essential in any market environment, but especially during times like these.”
(EDITOR’S NOTE — Scott Barkley is chief national correspondent for Baptist Press.)
