On March 4 local time, the first trading day of Trump's trade war against Canada and Mexico saw significant fluctuations in the U.S. stock market.The S&amp;P 500 index plummeted by 2% at one point, erasing a $3.4 trillion gain accumulated since the election day on November 5. Although there was a brief rebound in the afternoon, it still closed at a new low since November 4.<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/9236795c-4340-4c9b-8c6c-2dce1bee3588.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/9236795c-4340-4c9b-8c6c-2dce1bee3588.png"/>Emma Wu, a global quantitative and derivatives strategist at JP Morgan, stated that in the first hour of trading, so-called retail investors withdrew $1.2 billion from the U.S. stock market, marking the largest withdrawal in that time frame since JP Morgan began tracking this data ten years ago. Of this, $1.1 billion was withdrawn from individual stocks, with selling behavior widely distributed across various sectors.Bloomberg reported that the sharp decline in the U.S. stock market shattered Wall Street's optimistic outlook on the economic prospects following Trump's victory, forcing investors to reassess the fair value of U.S. assets in the new environment of tariffs imposed by Trump on Canada and Mexico.According to the Global Times, on February 1, Trump signed an executive order imposing a 25% tariff on products imported from Canada and Mexico, with a 10% tax on Canadian energy products. On March 3, Trump confirmed that the tariff measures against Canada and Mexico would take effect on the 4th.In response, Canadian Prime Minister Justin Trudeau stated that Canada would not back down in the trade war initiated by Trump, calling it &#34;a very foolish thing,&#34; and that American families and Trump would soon feel the &#34;destructive&#34; impact of the tariffs. The European Commission also issued a statement criticizing the U.S. and urging it to reconsider its trade policy.<h2>U.S. Stock Market Reacts Strongly</h2>On the first day of the trade war, the U.S. financial markets experienced a rollercoaster ride:<blockquote><ul><li>The S&amp;P 500 index plummeted by 2% after opening, although it briefly recovered in the afternoon, it fell again towards the end of trading;</li><li>The yield on the 10-year U.S. Treasury bond fluctuated by 11 basis points during the day;</li><li>The dollar weakened, and Bitcoin rebounded.</li></ul></blockquote>Jim Worden, Chief Investment Officer of Wealth Consulting Group, stated:<blockquote>&#34;There may be some profit-taking behavior in the market, and those with lower risk tolerance may choose to wait until the uncertainty regarding tariffs is resolved.&#34;</blockquote>Larry Fink, CEO of BlackRock, also mentioned at the RBC Capital Markets conference:<blockquote>&#34;There is no doubt that we will face a lot of volatility in the next six months, and volatility is rising significantly. The year 2025 will be a turbulent year for the market.&#34;</blockquote><h2>Is it a good time to buy?</h2>In this regard, opinions on Wall Street vary.Although Fink believes that the U.S. stock market will experience significant volatility in 2025, he also thinks that long-term investors should not be intimidated:<blockquote>&#34;If there is a significant drop, that's great; it's a good time to buy, and you will ultimately be glad for holding the stocks.&#34;</blockquote>However, Max Wasserman, Senior Portfolio Manager at Miramar Capital, warns:<blockquote>&#34;The market is overvalued, and traders are now realizing that tariffs are coming, and they are unwilling to pay for stocks of companies with forward price-to-earnings ratios of 30 to 40 times.&#34;</blockquote>Jay Woods, Chief Global Strategist at Freedom Capital Markets, also stated:<blockquote>&#34;Buckle up, because more volatility is coming; traders sell first and ask questions later. Even if there is a technical rebound today, the stock market should have corrected long ago.&#34;</blockquote>

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Analysis suggests that the sharp decline in the U.S. stock market has shattered Wall Street's optimistic outlook on the economic prospects following Trump's victory. Investors must reassess the fair value of U.S. assets in the new environment where Trump imposes tariffs on Canada and Mexico

- On March 4, the U.S. stock market experienced significant volatility as trade tensions escalated with Canada and Mexico, leading to a 2% drop in the S&P 500 index.  
- Morgan Stanley reported a record $1.2 billion withdrawal by retail investors in the first hour of trading, reflecting widespread concern over the economic outlook following Trump's tariff announcements.  
- Analysts predict increased market volatility in 2025, with mixed opinions on whether current declines present a buying opportunity, as some warn of overvaluation amid impending tariffs.

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The tariff war has begun! The U.S. was initially arrogant and then became humble, with U.S. stocks first falling and then rising