Trade Negotiations and Market Volatility: Why Long-Term Focus Matters

Global trade developments have been a key driver of market fluctuations in 2025. Ongoing negotiations between major economies—particularly involving tariffs, supply chains, and trade agreements—have contributed to uncertainty across equity and bond markets.

While these headlines can spark short-term volatility, they are just one of many variables influencing investment performance. For long-term investors, especially those nearing or in retirement, it's important to understand these dynamics without allowing short-term news to drive long-term decisions.

The Current Landscape: Trade Talks and Market Response

Markets have recently responded to developments in trade policy, including:

• Shifting tariffs and import/export restrictions

• Changes to trade partnerships between the U.S. and key global economies

• Supply chain adjustments across industries such as technology, manufacturing, and agriculture

These events can influence investor sentiment and cause short-term market swings. However, history shows that markets have experienced and absorbed similar events many times before. Trade-related volatility is not new, and the market has tended to recover over time as conditions stabilize.

Why Long-Term Perspective Matters

Although it’s natural to pay attention to headlines, reacting impulsively to market news can lead to emotional decision-making. Long-term investors often benefit from focusing on fundamentals rather than short-term fluctuations.

Key considerations:

• Volatility is normal: Market ups and downs are a regular part of investing, especially during periods of economic transition or geopolitical uncertainty.

• Time in the market vs. timing the market: Trying to anticipate market movements based on trade news can lead to missed opportunities. Maintaining a consistent, diversified investment approach may be more effective over time.

• Long-term trends remain intact: Despite near-term headlines, broader economic indicators such as employment, consumer spending, and corporate earnings continue to provide context for investors.

Maintaining a Thoughtful Strategy

For those approaching retirement or managing distributions, market volatility can feel more impactful. In these cases, planning strategies may include:

• Holding appropriate cash reserves to avoid drawing from invested assets during down markets

• Rebalancing portfolios to maintain target risk levels

• Using fixed income and conservative investments to help manage some volatility

• Considering asset location and tax implications when making changes to an investment plan

Final Thoughts

Trade negotiations can have short-term effects on markets, but they are just one of many factors in the larger economic picture. For long-term investors—especially retirees and those planning for retirement—the focus often remains on consistency, diversification, and alignment with long-term goals.

If you’re unsure how current market conditions affect your plan, a professional review may provide clarity and help you stay focused on the broader picture.

This communication is general in nature and does not take into account your specific investment objectives or financial situation.

The information presented here is for informational purposes only and is not intended as investment, tax, or legal advice. Investors should consult with their financial professional before making any investment decisions.

Investing involves risk, including the potential loss of principal. Past performance does not guarantee future results.