Bradley Valentin 
Tesla, Bitcoin, The S&P 500, Dow Jones, Meta: All of these have dropped at least 8% in the last 30 days. Tesla leads the way with some of the worst performances of the bunch at -33% in the same period. Meanwhile, tariffs and President Trump’s policies have dominated headlines. So what is causing this slide, and how long should we wait to be worried?
Analyzing the Slide
Let’s start by analyzing some major investment opportunities that have been hit with plummeting prices. You don’t have to go much further than Tesla, led by CEO Elon Musk, to see that the last month has seen atrocious results on the stock market. So how badly is Tesla struggling? On February 11th, the TSLA opened at $345.80. On March 11, Tesla closed at $230.58. That’s a 33% drop in just a few weeks. So how bad is it for Tesla?
In the last 6 months, Tesla has grown by 1.07%. We can see an obvious spike in growth in late November, followed by a peak in January. Since then, the stock has been on a slide. Let’s go back 12 months.
In 12 months, the stock is up an astounding 29.71%. This type of growth is extraordinary, and outpaces even the S&P over the same period. Time is the great equalizer, and every company, investor, stock holder, and board member would be ecstatic with a nearly 30% growth in just one year.
But how should we feel after a month of massive losses?
What’s Causing This Sell-off?
If you’ve been reading headlines lately, there’s probably one word that has dominated every caption: tariffs. President Trump has the United States in the middle of a (cold?) tariff war, with Canada, Mexico, and China staring against the United States. The tariffs have been confusing, have been called off, reinstated, questioned, and paused again. The tariff battle started on February 1, when the president stated that there would he would implement tariffs on China, Canada, and Mexico. However, the tariffs were quickly paused on Mexico and Canada when the country leaders agreed to increase border security and prevent the drug trafficking of fentanyl in the United States. On February 10th, the president signed adjustments to tariffs on steel and aluminum into the United States. Most tariffs have been delayed, as some tariffs to Canada and Mexico will be delayed until early April. However, Chinese tariffs were effective in February, and increased on March 4.
So are tariffs to blame? The headlines may make you think that the answer to this question is an emphatic yes, but there is much more to the story. While the economic environment is important to a business and stock’s wellbeing, it will not be outweighed by profits. That’s why we saw a strong day for Tesla, after President Trump publicly announced he was purchasing a Tesla. Investors like that the president is showing that a Tesla is a strong product, and they assume revenues will increase. Meanwhile, technology companies like Meta and Nvidia have also been struggling, but they’re less worried about tariffs. Meta has been struggling with client and legal battles, and Meta and OpenAI have both had issues with chip supplies. These topics are less interesting, and do not pull in headlines, but tariffs do, so that’s what you will see.
Should We Worry?
In short, probably not. A tariff war alone, albeit an annoying and confusing one, is not enough to see an economic crisis for a country as big as the United States. Yes, tariffs have caused economic turmoil in the past, but usually these are large, long-term tariffs that were enacted on low-GDP countries.
Never doubt the power of revenues. If Tesla, Meta, Ford, Nvidia, etc. come out with quarterly earnings reports that show massive sales and revenues, expect the stock prices to skyrocket. If they struggle or are stagnant, we may see the opposite. Stock market crashes usually happen because of worldwide issues such as war and disease or major economic crises, which right now there are very few if any. Instead of worrying, it might be a good time to put some of your spending power to work: buy some investments. Maybe find a good ETF or mutual fund that follows the S&P, as we know the price is on sale right now.
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