How Trump’s Tariffs Are Reshaping Investments: What Voters Say & Market Impact

By: Payel

Published on: Apr 12, 2025

Introduction: Tariffs Trigger Market Turmoil

The financial markets have been on a rollercoaster this week as President Trump’s tariff policies spark wild swings in stocks, currencies, and commodities. With China retaliating by raising tariffs to 125% and the US countering with 145% duties, investors are scrambling to adjust their portfolios.

A recent Yahoo Finance poll revealed that 45% of investors have changed their strategies due to the tariff chaos, while 46% remain unfazed. But what does this mean for your investments?

This article covers:
✔ Market reactions to Trump’s tariffs (S&P 500, dollar, oil, gold)
✔ 3 possible scenarios for trade war outcomes
✔ How investors are voting with their portfolios
✔ Expert predictions on inflation and growth

Market Whiplash: Stocks, Dollar, and Commodities React

1. S&P 500 Sees Extreme Swings

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  Wednesday rally: Stocks surged after Trump announced a 90-day pause on most higher tariffs.

  
  


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  Thursday plunge: Markets dropped 3.5% as China retaliated with 125% tariffs.

  
  


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  Friday rebound: S&P 500 (^GSPC) climbed 0.4%, but volatility remains high.

  
  

???? Key Takeaway: Traders are struggling to price in policy unpredictability, leading to sharp reversals.

2. US Dollar Collapses to 6-Month Low

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  Dollar Index (DXY) fell 1.4% to 99.49, weakest since September 2024.

  
  


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  Why? Tariffs threaten US economic growth, forcing investors to flee dollar assets.

  
  

3. Oil Crashes, Gold Soars

How Investors Are Voting: Poll Results

A Yahoo Finance survey of 1,391 investors asked:
"Have Trump’s tariffs changed how you invest?"

✅ 45% – YES (Adjusted portfolios for higher risk)
❌ 46% – NO (Staying the course)
❓ 9% – UNDECIDED (Waiting for clarity)

Why Some Investors Are Shifting Strategies

✔ Moving to defensive stocks (utilities, healthcare)
✔ Increasing gold & bond allocations
✔ Reducing exposure to China-dependent companies

Why Others Are Holding Steady

✔ Belief tariffs are temporary negotiation tactics
✔ Long-term confidence in US markets
✔ Expecting Fed intervention (rate cuts)

3 Scenarios: What Could Happen Next?

Edward Park, Chief Investment Officer at Evelyn Partners, outlines three possible outcomes:

1. Worst-Case: Full Trade War & US Manufacturing Push

• Tariffs stay permanently high to force manufacturing back to the US.


• Result: Market crash, inflation spike, global recession.

2. Best-Case: Grand Global Trade Deal

• All April 2 tariffs (including 10% baseline) are removed in a sweeping agreement.


• Result: Stock market rally, but lingering distrust in trade policy.

3. Base-Case (Most Likely): Targeted Tariff Negotiations

• Tariffs used as leverage to strike smaller deals with key partners.


• Result: Higher inflation + slower growth, but no full-blown crisis.

???? Park’s Verdict: "Scenario 3 is most likely, but markets will remain volatile."

What Should Investors Do Now?

1. Hedge Against Inflation

• Gold, commodities, TIPS (inflation-protected bonds)

2. Diversify Geographically

• European & emerging market stocks (less tariff exposure)

3. Watch for Fed Moves

• Rate cuts expected if tariffs hurt growth (96 bps priced in for 2025).

4. Stay Liquid & Flexible

• Avoid overexposure to cyclical sectors (tech, industrials).

Conclusion: Navigating the Tariff Storm

Trump’s tariffs have split investors, with 45% changing strategies while 46% stay the course. The market’s extreme reactions—S&P 500 swings, dollar crash, gold surge—highlight deep uncertainty.

Key Takeaways:
✔ Volatility will persist until trade policies stabilize.
✔ Gold & defensive assets are winning bets for now.
✔ Watch for Fed rate cuts if the economy weakens.

Will tariffs trigger a recession, or is this just a negotiation tactic? Stay tuned as the trade war evolves.