US stock market wraps up Q1 with correction driven by geopolitical unrest

The first quarter of 2025 proved to be challenging for the US stock market, as shares of domestic companies initially soared to record highs before suffering a sharp correction. Geopolitical tensions will continue to undermine price movements in the coming months, Reuters forecasts.

The S&P 500 Index closed March down 4.6%, marking its largest quarterly decline since early 2022. Many investors who were expecting an uptrend were caught off guard by the downturn. Stock market volatility was significantly impacted by Donald Trump's return to the White House and his trade policies, the agency notes.

Falling consumer confidence coupled with the President's import tariffs have traders worried over a possible recession in the economy. Reuters reports that market players aren't ruling out the possibility of stagflation in the country.

Despite the apparent weakness in the stock market, the CBOE Volatility Index remained below 30, indicating some stability amid the turmoil.