#MarketTurbulence has been buzzing in 2025, reflecting a volatile year for global financial markets. Based on recent web data and X publications, here is a concise summary of what is driving the turbulence and how investors are reacting: Key drivers of market turbulence in 2025: Tariffs and trade tensions: New U.S. tariffs, including a baseline tariff of 10% on all trading partners and higher rates on countries like China (34%), Japan (24%), and the EU (20%), have disrupted global trade, increasing fears of inflation and supply chain costs. These policies, intensified under the Trump administration, triggered market fluctuations, with the S&P 500 dropping by 4.4% to 5.6% in the first quarter and in March alone. Federal Reserve ambiguity: The Fed's decision to keep rates at 4.25% - 4.5% with vague signals about future cuts has fueled uncertainty. Investors are divided, with a 50.5% probability of a rate cut in September priced in, risking massive sell-offs if expectations are not met. Inflation and economic slowdown: Inflation remains stubborn, with a CPI of 2.8% annually and core inflation at 3.1%. Fears of recession are resurfacing, fueled by a slowing labor market (non-farm payrolls in July at a low 35,000) and an inverted yield curve signaling potential economic contraction.