Wall Street’s heavyweights are taking a brutal beating in 2025, with the S&P 500 down 9% since January. Tech giants and financial titans are watching their market caps evaporate as investors flee to safer havens like gold and silver. Netflix stands alone in the carnage, up a shocking 89.56% year-to-date. Europe and Asia are laughing all the way to the bank, outperforming U.S. markets thanks to defense spending and AI fever. The real story? It’s just getting started.
Three gut-punching months into 2025, and Wall Street’s bubble has finally burst. The S&P 500 has plummeted nearly 9% since January, sitting at a depressing 5,249.06 points. After two years of champagne-popping 25% gains, Morgan Stanley’s analysts are suddenly singing a different tune – and it’s not a happy one.
The party crasher? A perfect storm of new tariff policies and geopolitical drama starting April 2nd. The VIX index hit 45.31, marking the highest volatility since the 2020 crash. Markets hate uncertainty, and boy, are they getting a face full of it. The Trump administration’s blasé attitude toward market volatility isn’t helping either.
Meanwhile, Europe and Asia are laughing all the way to the bank, with their markets outperforming U.S. stocks thanks to defense spending boosts and AI hype. Netflix stands out as a rare bright spot, with its stock soaring up 89.56 percent year-to-date.
The tech darlings that carried the market for years are now getting a reality check. Value stocks are finally having their moment, outperforming their flashier growth counterparts by a substantial margin. Small-cap stocks are sitting there like wallflowers at a dance, seriously undervalued compared to the broader market. With median bear declines historically reaching 33%, investors fear worse is yet to come.
Growth stocks? They’re sporting their highest premium since the tech bubble of early 2020 – and we all remember how that turned out.
Investors aren’t just sitting around watching their portfolios bleed. They’re moving money faster than a cat chasing a laser pointer, dumping megacap tech stocks and running for the hills – or rather, for gold and silver. Traditional value sectors, especially energy and financials, are becoming the new cool kids at the party.
The real kicker? Morningstar’s analysis shows the U.S. market is trading at just a 1% discount to fair value. That’s barely a bargain-bin discount at a dollar store.
European markets are having a field day with defense spending tailwinds, while Asian markets are riding the AI wave far better than their American counterparts.
If Templeton’s bull market psychology model is right about this being the skepticism phase, Wall Street might need more than just a band-aid to fix this mess.
