New York – Investors started the year optimistic about the potential impact of a business- and crypto-friendly Trump administration. However, as we reach the two-month mark of 2025, US stocks are trailing behind European and Chinese stocks. There are growing concerns about inflation, with bitcoin prices declining and investor worries mounting.
Our markets are showing signs of unease as inflation concerns rise and uncertainty lingers around President Donald Trump’s trade and tariff policies. The fear and greed index from a prominent financial institution indicates extreme fear among investors for the first time since December, reflecting the current market sentiment.
US stocks faced a decline, notably after a consumer confidence survey reported heightened anxiety about inflation. The consumer confidence index saw its most significant monthly drop since August 2021. Market volatility is on the rise, with the VIX, Wall Street’s fear gauge, hitting its highest level this year before retracting.
Investors seem to be opting for safer havens such as government bonds and shifting away from risky assets like cryptocurrencies. Bitcoin, which surged during Trump’s inauguration, has dropped approximately 17% in the past month. The movement into government bonds has driven the yield on the 10-year US Treasury down to 4.3% as concerns about economic growth deepen.
In contrast to the uncertainty in US markets, global markets are faring better. Europe’s STOXX 600 Index has seen nearly a 10% increase this year, while in China, stock performance continues to outshine that of the US. Analysts point to recent events, such as the release of DeepSeek’s LLM and developments around Ukraine, as factors contributing to the surge in performance for tech companies in China and Europe.
Despite the mixed performance of US stocks, some traders believe the market is overvalued according to a quarterly survey. However, bullish sentiment still outweighs bearish sentiment. While uncertainties persist, strategists remain optimistic about the impact of strong corporate earnings on driving stock prices higher in the future.
