Investors have been taken aback by the recent turn of events in the market. The S&P 500 saw remarkable growth in the past two years, with a 20% increase annually, a first-time occurrence this century. While this boom seemed promising, it resulted in stretched positions, expensive valuations, and increased market vulnerability. In light of escalated global risks, traders are looking for safe havens, causing the S&P 500 and the Nasdaq 100 Index to head towards their worst quarters since 2022.

This shift is partly in response to President Donald Trump's trade policies and concerns over slowing economic growth. The plan to impose reciprocal tariffs has raised fears of an economic slowdown that could impact Corporate America's profits, thereby affecting US stock prospects.

The major issue lies in the sharp decline of big technology stocks that were pivotal in the recent market rally driven by artificial intelligence excitement. This trend is evident in trading activities, where sectors beyond big tech are relatively stable, while formerly favored tech stocks struggle. For example, this year, the equal-weight versions of the S&P 500 and the Dow Jones Industrial Average are performing better than the regular S&P index, a rare occurrence since the early 1990s.

In 2025, the S&P 500 Index has declined by 5.1%, trailing behind the MSCI All Country World Index excluding the US Index, which saw a 6.5% gain. This marks the widest performance gap in any quarter since 1988, highlighting the market's uncertain phase.

Given the ongoing uncertainty, market analysts remain cautious about significant stock recovery until the impact of tariffs on corporate earnings becomes clear. Amid these challenging market conditions, there are opportunities for investors to reconsider their positions, but with numerous unknown variables like trade tensions and economic growth, many are hesitant to enter the market at this time.