Smart Investor: Stock Market Crashes, Tariffs and the Economy, What’s Next for the Fed

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This week’s highlights:

• Weekly Market Update: Consumer Stocks Lead the Market Down 2.32%
• What We’ve Learned From 150 Years of Stock Market Crashes
• Is It Time to Buy the Magnificent Seven?
• Tariffs Aren’t the True Cause of the Markets’ Selloff
• Why Meta’s New Content Moderation Policy Could Pose Risks to Its Stock
• Fed Faces Triple Threat of Inflation, Slowing Growth, and Uncertain Trump Policies. How Will It Respond?

President Donald Trump’s trade war proved too much for the stock market this week, sending stocks down into correction territory with a 10% loss from highs set just a few weeks back. The worst damage this past week came among consumer stocks, but over the last few months, growth stocks have taken an especially hard-hit.

It took some time, but investors seem to have dropped the “What, me worry?” mindset to tariffs. Morningstar senior US economist Preston Caldwell looks at why the trade war will slow economic growth, the risks to the inflation outlook, and why (somewhat counterintuitively) it won’t narrow the trade deficit.

The stock market’s retreat has widely been blamed on tariffs and policy whiplash from the White House. John Rekenthaler weighs in with a column only he could write, asserting that tariffs aren’t truly the root cause of the correction. It’s a great lesson in market dynamics.

As the stock market has sold off, the “Magnificent Seven,” which played an outsize role in the bull market of the past two years (yes, we’re still in one), have been among the hardest hit names. Some of them have fallen by double-digit percentages. Are any of the Mag Seven now a buy? We look at what Morningstar’s stock analysts have to say.

Meta is one member of the Magnificent Seven that’s taken a hit lately. Prior to February, Meta’s stock staged a massive rally as the company revived its business strategy. But the firm is shifting its content moderation policies, which could pose new risks to the stock. Check out Leslie Norton’s great piece here.

Amid the uncertainty, Federal Reserve officials have the unenviable task of sorting out where to take interest rates. As Sarah Hansen writes, when Fed officials meet this coming week, they are facing a triple threat of tariffs pushing up inflation, slowing economic growth, and significant unknowns around fiscal policy.

Lastly, if you haven’t had a chance to check out our amazing story on stock market crashes, it’s a must-read. Don’t misunderstand, we’re not predicting a crash is in store! But this deep dive into 150 years of history is fascinating and offers valuable lessons for investors.

Be sure to visit our Markets page for our latest coverage and live stock market updates, along with our weekly calendar of key upcoming data and events.