The U.S. stock market has been on an emotional rollercoaster in 2025. After a solid 4% jump in the first two months, the S&P 500 plunged nearly 19% in just seven weeks. The culprit? A wave of uncertainty stirred by tariffs imposed under President Trump’s trade policy. As the situation continues to shift, investors are left wondering: is now the time to buy stocks?
A Market in Crisis: The Impact of Trump’s Tariffs
The wild swings in the stock market this year began with President Trump’s controversial “Liberation Day” tariffs announced on April 2. Initially, the S&P 500 was already on a downward trajectory, largely due to the duties levied on goods from China, Canada, and Mexico. However, this sudden escalation sent the index into a tailspin. By April 8, it had fallen 19% from its peak.
Business leaders weren’t shy about expressing their concerns. JPMorgan CEO Jamie Dimon warned that the new tariffs would likely slow economic growth and push prices higher. Meanwhile, hedge fund magnate Bill Ackman predicted the U.S. was heading into an “economic nuclear winter,” fearing irreparable damage to the country’s global standing.
Analysts reacted swiftly, slashing earnings forecasts and predicting an increased likelihood of a recession. Despite this, President Trump made a partial reversal on April 9, pausing the country-specific tariffs for 90 days. However, the 10% universal tariff remained in place.
In the weeks that followed, the S&P 500 showed signs of recovery. It strung together a nine-day winning streak, marking its longest such streak in two decades. Yet, even with these gains, the index remains nearly 9% below its high. What’s more, the U.S. economy is still precarious, with the average tariff rate the highest it’s been since the 1930s, according to JPMorgan.
Should You Buy Stocks Now? Warren Buffett Weighs In
So, with all this uncertainty, should you be putting your money into the market right now? The answer depends on your approach. Warren Buffett, one of the most successful investors of all time, has a simple but powerful philosophy: don’t try to time the market.
Buffett is known for his long-term, value-driven investing strategy. Over the past 60 years, Berkshire Hathaway’s shares have compounded at an annual rate of 20%. In his typical no-nonsense style, Buffett once said: “I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month or a year from now.” However, he emphasized, the market is likely to move higher well before the economy or sentiment improves.
This advice resonates today, especially considering how volatile the market has been. If you wait for economic certainty or for tariffs to vanish, you might miss the chance to invest in companies that will perform well over the long term.
Investing in Stocks the Buffett Way
Buffett’s approach isn’t just about buying stocks; it’s about buying the right stocks at the right price. He believes the best investment is in a business you understand, one whose earnings are expected to grow over the next five, ten, or twenty years. “When you see one that qualifies, you should buy a meaningful amount of stock,” Buffett advises.
Importantly, Buffett also stresses the importance of being prepared for downturns. “You’ve got to be prepared when you buy stock to have it go down 50% or more and be comfortable with it,” he said. This kind of mindset has helped Berkshire Hathaway weather some rough times, with its stock falling more than 50% three times since 1965. Despite these setbacks, the company has still managed to compound at an impressive 20% annual rate.
Don’t Let Short-Term Volatility Scare You
Buffett’s advice makes it clear: the short-term ups and downs should not dictate your investment strategy. Even in times of uncertainty, quality stocks at a reasonable price present opportunities. Yes, tariffs and trade wars may cause temporary volatility, but the best companies will continue to grow and thrive in the long run.
For investors, the message is clear: don’t let fear dictate your strategy. Instead, focus on finding companies that offer solid long-term growth potential. And, most importantly, invest when the price is right.
Should You Invest in the S&P 500 Now?
The S&P 500 is often a safe bet for many investors, but it may not be the top choice in the current climate. The Motley Fool’s Stock Advisor analyst team has recently identified 10 stocks they believe offer better potential returns than the broader market. While these stocks might not carry the stability of the S&P 500, they could offer higher returns over the next few years. For example, stocks like Netflix and Nvidia, which were recommended by Stock Advisor back in the mid-2000s, have since provided incredible returns.
While the S&P 500 remains an important benchmark, investors should consider diversifying their portfolios with other high-growth opportunities.
