Stock market slumped $5 trillion in Q1, but analysts debate if it's time to buy

From Yahoo Finance: 2025-03-31 11:37:00

U.S. stocks face their worst first-quarter performance in five years, losing over $5 trillion since mid-February. Tariff risks, price pressures, and slashed growth forecasts by Wall Street banks contribute to the decline, pushing the S&P 500 into correction territory.

Q1 S&P 500 profits rose 8% from last year to $507.2 billion. Full-year earnings are expected to increase by double-digits to around $269 a share. Analysts debate whether now is a good time to buy the dip before first quarter earnings season begins.

Chief investment officer James Demmert believes the pullback reflects a healthy reset, not a sign of further downturns. Earnings season start next Friday may help the market move past the correction, with better-than-expected earnings anticipated following the market correction.

Vice president Chris La Rosa sees growth catalysts in tax reform, fiscal stimulus, and favorable regulations. Strong consumer spending and business investment, along with a pro-business policy backdrop, are expected to drive economic expansion, benefiting U.S. equities.

JP Morgan analysts note challenges for a market turnaround during Trump’s second term. The S&P 500 trades at 21 times forward earnings, growth is slowing, and policy uncertainties abound. Tech stocks, including the Magnificent 7, face concerns about AI spending and capital growth that may impact indexes like the S&P 500.

Chief investment officer Lisa Shalett is cautious, citing concerns about recession or stagflation. The bullish equity narrative has broken, challenging a ‘buy the dip’ strategy. While data from retail, housing, and industrial sectors may support near-term GDP growth, market stability remains uncertain. 1. The stock market hit record highs today, with the Dow Jones Industrial Average reaching a new milestone. Investors are optimistic about strong corporate earnings and positive economic data.

2. In international news, tensions are rising between two major world powers over a disputed territory. Both countries have deployed military forces to the region, raising concerns about a potential conflict.

3. A new study has found that a certain type of diet can significantly reduce the risk of heart disease. Researchers recommend incorporating more fruits, vegetables, and whole grains into meals to improve heart health.

4. The city council has approved a new budget that includes funding for important public services like education and infrastructure. Residents can expect to see improvements in schools, roads, and other essential services in the coming year.

Read more: Stock market slumped $5 trillion in Q1. Is it time to buy?