#MarketTurbulence Main 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 falling by 4.4% to 5.6% just in the first quarter and in March. Federal Reserve Ambiguity: The Fed's decision to keep rates at 4.25%-4.5% with vague signals about future cuts fueled uncertainty. Investors are divided, with a 50.5% chance of a rate cut in September priced in, risking sell-offs if expectations are not met. Inflation and Economic Slowdown: Inflation remains persistent, with the CPI at 2.8% annually and core inflation at 3.1%. Recession fears are resurfacing, driven by a slowing labor market (non-farm jobs in July at a weak 35,000) and an inverted yield curve signaling a potential economic contraction.