NEW YORK, March 12 (Reuters) – Global stocks rose on Wednesday with U.S. Treasury yields as relief over cooler U.S. inflation in February was countered by uncertainty around U.S. President Donald Trump’s tariff policies and their potential impact on inflation and global growth.

Oil prices settled higher after data on slower stockpile builds, while the euro pulled back slightly after hitting a five-month high in the previous day’s session on hopes for a ceasefire between Ukraine and Russia.

Wednesday’s U.S. Department of Labor data showed the Consumer Price Index rose 2.8% on an annual basis in February, below the 2.9% forecast from economists polled by Reuters. On a monthly basis, it rose 0.2% after accelerating 0.5% in January and versus economists’ estimate of 0.3%.

The S&P 500 (.SPX), opens new tab opened higher but then lost steam in morning trading. It returned to positive territory before

midday and stayed there for the rest of the session.

“It’s maybe some liquidity coming back into the market,” said Paul Christopher, head of global market investment strategy for Wells Fargo Investment Institute in St. Louis, Missouri.

“What we’re seeing is some money coming back in buying the dip. That’s a good sign.”

While investors were relieved that inflation was lower than expectations, Christopher said that strength in services price increases also showed that the economy was still solid.

On Wall Street the Dow Jones Industrial Average (.DJI), opens new tab fell 82.55 points, or 0.20%, to 41,350.93, the S&P 500 (.SPX), opens new tab rose 27.23 points, or 0.49%, to 5,599.30 and the Nasdaq Composite (.IXIC), opens new tab rose 212.36 points, or 1.22%, to 17,648.45.

But investors were still wary of U.S. trade policy and the impact that could have on inflation going forward.

“Today’s inflation report is obviously good news but it’s also backward-looking and doesn’t tell us anything about where we’re headed from here and what the inflationary impact of all these tariffs might be,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.

Investors had to scramble to keep up with events on Tuesday after Trump threatened to double steel and aluminium tariffs on Canada to 50%, then reversed course later in the day.

“The hard part is the uncertainty around tariffs,” said Baird. “It’s one thing to understand that the rules of the game are changing, but understanding what those rules will be and when they’ll be clearly defined is another thing entirely.”

Trump threatened on Wednesday to escalate a global trade war with further tariffs on European Union goods

This was after the European Commission said Europe would impose counter tariffs on 26 billion euros’ ($28 billion) worth of U.S. goods, including dental floss, diamonds, bathrobes and bourbon. Europe’s threat came after Trump’s 25% tariffs on all steel and aluminium imports took effect on Wednesday.

MSCI’s gauge of stocks across the globe (.MIWD00000PUS), opens new tab rose 4.08 points, or 0.49%, to 830.72 after rising earlier to 834.73

The pan-European STOXX 600 .STOXX index earlier closed up 0.81% after four straight sessions of declines on optimism around a potential Ukraine-Russia ceasefire and some help from the cooler-than-expected U.S. inflation report.

In Treasuries, yields rose with the potentially inflationary impact of tariffs offseting optimism about cooling inflation.

“This is the last reading not impacted by tariff distortions, so to some extent the market’s a little bit hesitant to over-react to a better print,” said Gennadiy Goldberg, head of U.S. rates strategy at TD Securities in New York.

The yield on benchmark U.S. 10-year notes rose 2.8 basis points to 4.316%, from 4.288% late on Tuesday while

the 30-year bond yield rose 3.2 basis points to 4.6355%.

The two-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 5 basis points to 3.991%, from 3.941% late on Tuesday.

With investor concerns mounting about recession and a global trade war, the yield spreads between corporate bonds and U.S. Treasuries widened late on Tuesday to their widest level since September.

In currencies, U.S. dollar performance was mixed due to counter currents of cooling inflation versus worries that tariffs could crank it up going forward.

The euro was down 0.25% at $1.0891 and against the Japanese yen , the dollar strengthened 0.38% to 148.33.

But the Canadian dollar strengthened 0.45% versus the greenback to C$1.44 per dollar and against the Swiss franc , the dollar weakened 0.08% to 0.882.

The Russian rouble reached a more than six-month high on Tuesday, but pulled back on Wednesday , weakening 1.75% against the greenback to 87.147 per dollar.

Oil prices rose as U.S. government data showed tighter oil and fuel inventories than expected, though investors kept an eye on mounting fears of a U.S. economic slowdown and the impact of tariffs on global economic growth.

U.S. crude settled up 2.16% or $1.43 at $67.68 a barrel while Brent settled at $70.95 per barrel, after rising 2% or $1.39 on the

day.

Safe-haven gold rose, aided by tariff uncertainty and the cooler U.S. inflation report.

Spot gold rose 0.53% to $2,931.59 an ounce. U.S. gold futures rose 0.74% to $2,934.40 an ounce.

Elsewhere in metals, copper rose 1.31% to $9,789.00 a tonne while three-month aluminum on the London Metal Exchange fell 0.11% to $2,700.00 a tonne.

American Eagle warned investors on Wednesday that consumers are pulling back on spending and it’s seen a “slower start” to the year than it expected.

“Entering 2025, the first quarter is off to a slower start than expected, reflecting less robust demand and colder weather,” CEO Jay Schottenstein said in a news release. “While we anticipate improvement as the Spring season gets underway, we are also taking proactive steps to strengthen the top-line, manage inventory and reduce expenses. As we navigate through an uncertain consumer and operating landscape, we will also remain focused on our long-term strategic priorities.”

Shares fell about 5% in extended trading.

The downbeat commentary, which came along with weak guidance for the current quarter and year ahead, is the latest warning sign that the consumer might be slowing down as shoppers contend with persistent inflation and concerns around tariffs.

Over the past couple of weeks, a string of other retailers, including both strong companies and ones that tend to struggle, issued weak guidance and cautious commentary about the current macroeconomic conditions and warned 2025 might be a weaker than expected year for sales.

Beyond its outlook, American Eagle issued mixed holiday results and comparable sales that beat expectations. Here’s how the apparel company did in its fiscal fourth quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

• Earnings per share: 54 cents vs. 50 cents expected
• Revenue: $1.60 billion vs. $1.60 billion expected

The company’s reported net income for the three-month period that ended Feb. 1 was $104 million, or 54 cents per share, compared with $6.31 million, or 3 cents per share, a year earlier.

Sales dropped to $1.60 billion, down slightly from $1.68 billion a year earlier. Similar to other retailers, American Eagle benefited from an extra week in the year-ago period, which has negatively skewed results.

Comparable sales, which don’t include the effect of one less selling week, were up 3% during the quarter, ahead of expectations of up 2.1%, according to StreetAccount. Aerie, American Eagle’s intimates and activewear line, drove the company’s growth during the quarter with comps up 6%. Meanwhile, the company’s namesake banner saw comparable sales up 1%.

For the current quarter, American Eagle is expecting to see a mid-single-digit decline in sales, while analysts expected revenue to increase 1.3%, according to LSEG. For the full year, it is expecting sales to decline by a low single digit, compared with expectations of 3% growth, according to LSEG.

On a call with analysts, finance chief Michael Mathias said Aerie sales are expected to be positive for the year but that growth will be offset by a steeper decline at the American Eagle banner.

Tariffs are also expected to weigh on results, Mathias said. The company currently sources just under 20% of its products from China and is expecting a $5 million to $10 million hit from the new duties in fiscal 2025, which will also affect American Eagle’s gross margin. At the moment, the company isn’t planning on passing those costs on to the consumer and is working to get its China exposure down to under 10% by the end of the fiscal year, Mathias said.

Over the past year, American Eagle has made significant strides in improving profitability but has seen slower sales growth. In the three prior quarters, it missed Wall Street’s sales expectations, and on Wednesday, it issued revenue numbers that were in line with analysts’ forecasts but didn’t exceed them.

During the quarter, the company acknowledged it had some product misses and had certain items that were out of stock, which affected sales, but American Eagle’s stores are also weighing on its results. The company still has a large mall footprint, and while there are some signals that malls are seeing a resurgence, traffic is still down significantly at U.S. malls, which means fewer people are coming into the retailer’s stores. For example, online sales are expected to be positive during the first quarter while store sales are expected to fall steeper than a mid-single-digit.

To combat the effect of declining malls, rival Abercrombie & Fitch has worked to move its stores to locations outside of malls while American Eagle has been working to remodel its existing fleet. Currently, the company’s stores are on average 12 years old, and it’s working to get that down to seven. In fiscal 2024, it remodeled around 56 stores, and in the year ahead, the company plans to remodel between 90 and 100 doors as part of its $300 million capex guidance.

In prior quarters, American Eagle has said it’s been contending with an uncertain economic environment and a consumer that tends to only come out and shop during key moments, but now a wide range of other retailers are reporting similar dynamics as cracks in the economy spread.

In February, consumer confidence saw the biggest drop since 2021, job growth slowed more than expected and unemployment ticked up. These signals and the effect they’ve had on the markets have led to concerns that a recession could be coming, especially if President Donald Trump’s trade war with Canada, Mexico and China continues.

A slowing economy is bad news for any retailer but especially those that primarily sell discretionary goods such as new clothes. During a call with analysts, Schottenstein shared his thoughts on the consumer and said the biggest thing affecting shoppers is uncertainty.

“They have the fear of the unknown, not just tariffs, not just inflation. They see the government cutting people off. They don’t know how that’s going to affect them. They see programs being cut, they don’t know how that’s gonna affect them,” said Schottenstein. “They just don’t know how it’s gonna affect them … they get very conservative.”

US markets seesawed Tuesday amid another tariff roller coaster ride. All three major indexes dropped after President Donald Trump doubled down early Tuesday on his threat to levy a new round of hefty tariffs on Canada. Yet by the afternoon, markets had pared some losses as officials from both the US and Canada said they would meet this week to deescalate tensions and renegotiate trade policy. The Dow closed lower by 478 points, or 1.14%, after tumbling more than 700 points earlier. The broader S&P 500 fell 0.76% and the Nasdaq Composite fell 0.18%. The S&P 500 flirted with correction territory and closed down 9.3% from its record high in February, nearing a correction. The Nasdaq, which has been in correction territory, closed down 13.6% from its record high in December. Trump did not appear to be concerned by the market’s decline. “Markets are going to go up and they’re going to go down but, you know what, we have to rebuild our country,” he told reporters at the White House. “This market is just blatantly sick and tired of the back and forth on trade policy,” Art Hogan, chief market strategist at B. Riley Wealth Management, told CNN’s Matt Egan. “It feels as though the administration continues to move the goal posts. With that much uncertainty, it’s impossible for investors to have any confidence,” Hogan said. Wall Street’s fear gauge, the Cboe Volatility Index, or VIX, fell after climbing earlier Tuesday. The index on Monday had an intraday surge of 19% and closed at its highest level since December. The decline in the three major indexes extends a market rout that has rattled Wall Street and raised concerns about when the bleeding will stop. Trump has cautioned that tariffs could cause “a little disturbance,” and Commerce Secretary Howard Lutnick said last week that “the fact that the stock market goes down half a percent or percent, it goes up half a percent or percent, that is not the driving force of our outcomes.” “There’s a tolerance for pain that maybe some investors hadn’t priced in,” said Ross Mayfield, an investment strategist at Baird. White House Press Secretary Karoline Leavitt in a press briefing Tuesday reiterated comments by Trump that the US is in “a period of economic transition.” Asked about the declines in the market, Leavitt said they are a “snapshot of a moment in time.” “The president will look out for Wall Street and for Main Street just like he did in his first term, and people on Wall Street and Main Street should bet on this president. He’s doing what’s right for this country,” Leavitt said. “The American people gave the president a tremendous opportunity to restore American greatness and restore our manufacturing dominance, and he’s intent on doing just that,” she added. Wall Street’s volatility comes on the heels of a steep selloff on Monday that saw the Dow tumble 890 points and the S&P 500 shed 2.7%. Trump in an interview with Fox News on Sunday had declined to rule out the possibility of a recession, contributing to investor anxiety. Trump told reporters Tuesday that the market selloff does not “concern” him and that he “doesn’t see” a recession. Among the stocks dragging markets lower on Monday were airlines. Delta Airlines (DAL) slid 7.25% after the company on Monday slashed its earnings forecast for the year. American Airlines (AAL) fell 8.3% and United Airlines (UAL) fell 2%. Elsewhere, Ford (F), one of the most actively traded stocks Tuesday, slid 2.7%. “Extreme fear” has been the sentiment driving investors for the past two weeks, according to CNN’s Fear and Greed Index, stoked by the uncertainty caused by Trump’s back-and-forth tariff announcements. European stocks slumped as the anxiety around Trump’s tariffs spread to global markets. The pan-European STOXX Europe 600 index fell 1.7%. Germany’s DAX and France’s CAC indexes were each 1.3% lower on the day, while London’s FTSE 100 was down 1.2%.

The chances that the U.S. will experience a recession in 2025 have increased because of the tariffs it has implemented, Alec Kersman, managing director and head of Asia-Pacific at Pimco, said at CNBC’s CONVERGE LIVE event in Singapore on Wednesday. There is a “maybe 35% probability” that the U.S. will enter a recession this year, Kersman told CNBC’s Martin Soong. That’s up from the approximately 15% chance that Pimco estimated in December 2024 as the repercussions of U.S. President Donald Trump’s tariffs take effect. Nevertheless, Kersman pointed out that the firm’s base case scenario is that the U.S. economy will grow by 1% to 1.5%, which is still an expansion, despite being “quite a significant decrease” from earlier expectations. In fact, according to Kamal Bhatia, president and CEO of Principal Asset Management, a boost in domestic consumption because of such trade policies could help the U.S. economy grow more than anticipated.

Risk of insularity

Trade wars could cause countries to “go back to being insular,” Bhatia said, which could cultivate “spurts of patriotism that translate into people spending more locally in their own nation.” Most people will underestimate such effects because they focus on the “external effects” on gross domestic product, Bhatia added. Consumer spending on goods and services account for around two-thirds of U.S. gross domestic product. There is therefore is a “high probability” that a tariff-induced increase in domestic expenditure will cause the country’s GDP to “do better than you anticipate,” Bhatia said. Those potential changes in spending patterns come as geopolitics begin to play a bigger role in economies and markets, Bhatia noted. “We’ve had very muted geopolitics in investing for a long period of time, and clearly tariffs are changing that,” he said. On Tuesday, Trump announced he will be doubling tariffs on imports of Canadian steel and aluminum to 50% in response to Ontario Premier Doug Ford’s 25% surcharge on the province’s electricity exports to the U.S. Trump backtracked on his plan after Ford said he was suspending the surcharge after agreeing with U.S. Commerce Secretary Howard Lutnick to renew trade talks.

US stocks plunged on Monday as investors processed growing concerns about the health of the US economy after President Trump and his top economic officials acknowledged the possibility of a potential rough patch. The Dow Jones Industrial Average (^DJI) fell nearly 900 points, or over 2%, while the benchmark S&P 500 (^GSPC) dropped around 2.7% after the index posted its worst week since September. The tech-heavy Nasdaq Composite (^IXIC) fell 4% in its worst day since 2022, as the “Magnificent Seven” stocks led the sell-off. Tesla’s (TSLA) rout continued, plunging 15% and officially wiping out the gains it had made in the wake of Trump’s election win. Nvidia (NVDA), Apple (AAPL), Google parent Alphabet (GOOG), and Meta (META) all each lost more than 4%. All three major indexes built on losses of more than 2% last week as the Nasdaq plummeted deeper into correction territory. March’s market struggles continue to be fueled by worries over the health of the US economy. Those concerns have become wrapped up in Trump’s ongoing trade salvo, as tariff negotiations between the US, Mexico, and Canada dominate the headlines. In a Sunday interview on Fox News, Trump addressed concerns about a potential recession, describing the economy as undergoing “a period of transition.” The political uncertainty is expected to persist into this week, with key economic data adding to the mix of potential market-moving factors. Updates on the inflationary picture will be in focus, with the February Consumer Price Index scheduled for release on Wednesday and the Producer Price Index set to follow on Thursday.

Delta Air Lines slashed its first-quarter revenue and profit outlooks, citing weaker domestic demand, backing up growing concerns about lackluster sales in some corners of the travel industry. Delta expects revenue in the quarter ending March 31 to rise no more than 5% from last year, down from a forecast in January of 6% to 8% growth. It slashed its adjusted earnings forecast to 30 cents to 50 cents per share from a previous guidance of 70 cents to $1 a share. Delta’s shares were off more than 13% in after-hours trading after falling more than 5% in the regular session on Monday. “The outlook has been impacted by the recent reduction in consumer and corporate confidence caused by increased macro uncertainty, driving softness in Domestic demand,” Delta said in a securities filing. Delta CEO Ed Bastian told CNBC’s “Closing Bell” on Monday that he does not expect a recession but said consumer confidence has weakened and that both leisure and business customers have pulled back on bookings. He said concerns about safety “somewhat exacerbated the impact on us” after the deadly midair collision between a regional jet and an Army helicopter in January in Washington, D.C., as well as Delta’s crash on landing in Toronto last month that was not fatal. Bastian’s comments come after a broad market sell-off. Delta’s forecast, delivered after the market closed on Monday, comes a day before a JPMorgan airline industry conference in which CEOs are expected to update investors on current demand trends. Delta said in a filing that demand for premium travel, international travel and loyalty revenue growth is still in line with its expectations. American Airlines, Southwest Airlines and United Airlines are among the other carriers that will also update Wall Street on demand trends. Airline shares prices have dropped sharply in recent days as growing signs of weaker consumer spending hit the sector, which had been resilient compared with other industries in the wake of the Covid-19 pandemic.

Volatility has returned to the stock market. In particular, the tech-heavy Nasdaq Composite has suffered a rough start to the year. As of this writing, the index has dropped about 3.8% year to date and about 7.5% off its all-time high. That means the index is approaching a technical correction — a drawdown of 10% from recent highs. So, given the state of play, are there any bargains to be found in the Nasdaq? Today, three Motley Fool contributors will make the case for their favorite bargain bin buys on the Nasdaq: Advanced Micro Devices (AMD 1.48%), Broadcom (AVGO 8.64%), and Amazon (AMZN -0.72%).

Don’t miss the massive discount on this high-flying AI stock

Will Healy (Advanced Micro Devices): AMD has struggled over the last year. A prolonged slump in its gaming and embedded segments and a company forecast that it would experience a sequential decline in revenue have led to a 55% pullback in the semiconductor stock’s price since it peaked one year ago. However, that drop in the stock appears overdone for many reasons. Regarding its data center segment, that part of the business often suffers from the effects of seasonal sales patterns, and a quarter-over-quarter decline in Q1 of last year seems to confirm this trend. Additionally, DeepSeek’s breakthrough has also allowed entities to run artificial intelligence (AI) models at much lower costs. Hence, even if AMD cannot catch up to market leader Nvidia, its lower-end AI accelerators could benefit from increased demand. Indeed, AMD’s overall growth rate has increased in recent quarters, not fallen back. Revenue in the fourth quarter of 2024 grew 24% to $7.7 billion. As recently as Q2, yearly revenue growth was just 9%. This is likely because the slump in its embedded segment may finally be ending. Yearly revenue growth fell by 41% yearly in Q2. Fast forward to Q4, and the decline was now just 13% annually.

Growing money supply usually bodes well for these companies to outperform. If you’ve invested in the stock market over the last couple of years, you may have benefited from an incredible bull run in the S&P 500 (^GSPC 0.55%). The index climbed over 66% from the market bottom in October 2022 through the end of February this year. But not every stock participated equally in that bull run. If you invested exclusively in large-cap stocks with growth fueled by artificial intelligence spending, you likely outperformed the index. If you invested in anything else, you probably didn’t keep up. Just 27% of S&P 500 constituents outperformed the index in 2023, and 28% outperformed in 2024. That’s led to an increasingly concentrated market dominated by just a handful of names. But rising concentration is unsustainable. At some point, the mega-cap stocks that have led the market over the last two-plus years will start lagging as smaller companies pick up the slack. And one market indicator suggests that change could be right around the corner.

U.S. money supply growth is accelerating

One factor that’s given the biggest companies in the stock market an unfair advantage in recent years has been the tightening money supply. U.S. M2 money supply started declining in 2022, finally reaching a bottom in late 2023. M2 money supply is a measure of all the cash people have on hand, all the money deposited in checking and savings accounts, and other short-term investments like small-value certificates of deposit (CDs) maturing within a year. The Federal Reserve can influence the money supply through changes in borrowing rates as it works to maintain price stability. A smaller M2 money supply indicates rising interest rates, making it harder to finance loans, and consumers may be less willing to spend. In January, M2 money supply grew faster than at any point since August of 2022, up 3.86% year over year. The growth has accelerated nearly every month since turning positive 10 months ago. At this point, we’ve nearly returned to the peak money supply from 2021. US M2 Money Supply YoY data by YCharts. Despite significant economic uncertainty leading to much more caution at the Federal Reserve, investors still expect the Fed to lower borrowing rates further in 2025. As of this writing, futures markets indicate a 79% chance that the Fed makes two to four rate cuts by the end of the year. That should lead to further money supply growth beyond 2025.

How to invest as money supply growth accelerates

While the money supply is tight, mega-cap stocks with tons of cash on their balance sheets stand at a huge advantage. They have the money available to invest in growth and improve their technologies. The tightening money supply happened to coincide with a major breakthrough in artificial intelligence (AI) in late 2022, which required massive amounts of capital to take advantage of. This enabled the world’s largest companies to spend heavily on AI, leaving smaller companies with far less capital. However, accelerating growth in the money supply is historically correlated with broadening stock performance. As smaller companies have easier and less expensive access to capital, they can invest more in their own growth initiatives. That leads to stronger returns investors typically expect from smaller companies in normal economic environments and more S&P 500 constituents outperforming the overall index. One of the easiest ways to invest in that trend reversal is to buy an equal-weight index fund like the Invesco S&P 500 Equal Weight ETF. The equal-weight index balances every component of the S&P 500 equally. This means the amount you’ll invest in the biggest mega-cap stocks is the same as the smallest members of the index. Each quarter, the index’s managers rebalance it, and new constituents are added, while others leave. The Invesco fund managers do an excellent job of tracking the index and ensuring that the necessary trades to keep the fund balanced don’t trigger any capital gains for shareholders. That makes it extremely efficient for long-term buy-and-hold investors. Other funds for investors to consider include small-cap and mid-cap stocks. These smaller companies have trailed the large-cap index for a long time, predating the Fed’s tightening policy over the last few years. However, they now trade at great values relative to the S&P 500. The mid-cap S&P 400 index sports a forward price-to-earnings (P/E) ratio of 15.6, while the small-cap S&P 600 trades for just 15.3 times earnings. That’s a bargain compared to the S&P 500’s 21.5 multiple or the equal-weight index’s 17.1 multiple. Investors could buy the Vanguard Extended Market ETF (VXF 0.26%), which tracks an index of stocks, including almost every U.S. company outside the S&P 500. Alternatively, a focus on the S&P 600 small-cap index, specifically with the SPDR Portfolio S&P 600 Small Cap ETF (SPSM 0.57%), could perform well as money supply continues to accelerate. With money supply growth accelerating and valuations favoring smaller companies, all of the above options present great ways to diversify away from the largest companies in the S&P 500.

The U.S. stock market has stumbled in recent weeks as the Trump administration imposed tariffs on goods imported from Canada, China, and Mexico, potentially starting a trade war. The market has been especially volatile because the White House has wavered on its trade policy, first imposing duties and then delaying or changing the terms. The market dislikes uncertainty. The three major U.S. stock indexes are down more than 5% from their highs as of March 6: The S&P 500 (^GSPC 0.55%) has slipped 6.6%, the Dow Jones Industrial Average (^DJI 0.52%) has declined 5.4%, and the Nasdaq Composite (^IXIC 0.70%) has tumbled 10.4%. Importantly, the Nasdaq has officially entered market correction territory, meaning it has fallen at least 10% from its most recent bull market high. Fortunately, the index has historically bounced back very quickly. While there are no guarantees, here’s what usually happens next.

The Nasdaq Composite has historically rebounded quickly after closing in correction territory

The Nasdaq Composite measures the performance of more than 3,000 companies listed on the Nasdaq stock exchange. The index is most heavily weighted toward the information technology and consumer discretionary sectors, and is commonly regarded as a benchmark for growth stocks. As mentioned, the Nasdaq on March 6 closed more than 10% below its most recent bull market high of 20,174, a level the index reached less than three months earlier on Dec. 16. That means the Nasdaq has entered a stock market correction, something it has done a dozen other times since 2010. The chart below lists each date since 2010 when the Nasdaq first closed in correction territory. It also shows how the index performed over the next 12 months.

Nasdaq Closes in Correction Territory	12-Month Return
May 7, 2010	25%
Aug. 4, 2011	16%
May 18, 2012	26%
Nov. 14, 2012	40%
Aug. 24, 2015	15%
Oct. 24, 2018	15%
June 3, 2019	32%
Feb. 27, 2020	54%
Sept. 8, 2020	41%
March 8, 2021	2%
Jan. 19, 2022	(24%)
Aug. 2, 2024*	8%
Average	21%

Since 2010, the Nasdaq has returned an average of 21% during the 12-month period following its first close in correction territory. Comparatively, the index has returned 15% annually over the entire period. That means the Nasdaq has historically produced above average returns following its first close in a market correction. Importantly, past performance is no guarantee of future results. But we can use the information above to make an educated guess about how the Nasdaq might perform in the next year. Specifically, the index closed at 18,069 on March 6, so it would advance 21% to 21,863 in the next year if its performance aligns with the historical average.

The Nasdaq Composite may continue to fall due to uncertainty about trade policy

The tariffs proposed by the Trump administration as of Feb. 27 would increase the average tax on U.S. imports to 13.8%, according to one estimate, the highest level since 1939. Several duties have already taken effect, rattling the stock market. Businesses can either absorb the cost increases or pass them to buyers. Margins fall in the first scenario, and sales likely fall in the second scenario. Either way, tariffs probably hurt corporate earnings. However, investors are particularly nervous because the Trump administration has waffled back and forth on its trade policy. It planned to impose tariffs on goods from China, Canada, and Mexico on Feb. 4, but delayed duties on Canadian and Mexican imports until March 4. The administration then adjusted the terms on March 6, such that goods in compliance with the free trade agreement are exempt until April 2. That whipsawing on trade policy has created uncertainty, and the stock market will likely remain volatile until that uncertainty dissipates. But investors can take solace in this indisputable fact: The Nasdaq Composite has recovered from every correction and there is no reason to believe this one will be different. That means the current drawdown is a buying opportunity.

Seven & i Holdings, the parent of 7-Eleven, said Thursday it will replace CEO Ryuichi Isaka with lead independent outside director Stephen Dacus, making a foreigner the top executive for the first time, according to domestic media. Dacus will take charge from Isaka on May 27, according to a company filing. Seven & i said that Isaka will remain as senior adviser to the company. Dacus was the head of the company’s special committee that is evaluating a $47-billion takeover bid from Canada’s Alimentation Couche-Tard. He was announced to have stepped down from the committee on March 5, and independent outside director Paul Yonamine replaced him. The convenience store operator also announced a share buyback of 2 trillion yen ($13.2 billion) and plans to list its North American subsidiary, 7-Eleven Inc. The company said that it will hold a majority stake in the subsidiary which will be listed in the second half of 2026. Shares of Seven & i ended the day up 6.11%, as reports about the impending changes emerged on Thursday. Seven & i also provided an update on the takeover bid by Canada’s Couche-Tard, saying that the special committee formed to review the proposal “has been committed to exploring all value creation opportunities, including active and constructive engagement with ACT and will continue to do so.” It said a consistent hurdle that the Couche-Tard proposal needed to resolve is addressing “the serious U.S. antitrust challenges that any transaction would face.” Speaking at a press conference Thursday, Isaka said “there has been no meaningful progress on finding a solution of the U.S. antitrust challenges” regarding the Couche-Tard bid, according to a Reuters translation. Dacus then added that he doesn’t know “if Couche-Tard can improve our company value,” adding that there was a “very high regulatory hurdle”, particularly in the U.S. However, the company revealed it has been working with Couche-Tard to put together a “potential divestiture package” that could operate effectively and assure competition between Couche-Tard and the buyer of the divested stores, even after a transaction. The $47-billion bid by Couche-Tard is the only active bid for Seven and i, after a management buyout attempt by the founding family failed to secure the financing needed to take over the convenience store operator last week.

Sale of business units

Other actions the company also announced are that it will sell its superstore business group — consisting of supermarkets — to investment company Bain Capital for 814.7 billion yen ($5.37 billion), with the transaction expected to be completed in September 2025. Bain Capital then plans to list Seven & i’s supermarket business in about three years after boosting synergies within the group, according to a Reuters report. Seven & i also plans to reduce its stake of banking services arm Seven Bank by selling down its stake to below 40%. Seven Bank will also then be deconsolidated from the company’s balance sheet. Seven & i said the share buyback will be funded by proceeds from the sale of its superstore business group and the IPO of 7-Eleven Inc. These buybacks will commence when the sale is completed, and are expected to conclude by the company’s 2030 financial year. A dividend policy will also be implemented, the company said, adding that “it will continue to maintain or increase per share dividend amount over time for cashflow generated from ordinary business operation.”