Let’s call it what it is: today was rough.

Markets dropped fast and hard after President Trump announced sweeping new tariffs on foreign imports. The Dow fell over 1,600 points. The S&P dropped nearly 5%. The Nasdaq got hit even harder. In a matter of hours, the U.S. equity market lost over $3 trillion in value.

If you’re feeling a little stunned, that’s understandable.

But if you’ve worked with us at Compound Advisory, you know we don’t build strategies based on headlines. We build them to weather storms like this.

WHAT HAPPENED TODAY?

President Trump announced a new round of tariffs:

• A 10% baseline on all imports

• Higher reciprocal tariffs (up to 50%) on countries with trade surpluses against the U.S.

This move triggered instant fears of a renewed global trade war.

Investors hate uncertainty, and this was a big dose of it.

WHO FELT IT MOST: INDUSTRY IMPACTS

This wasn’t a gentle correction. The sell-off hit specific sectors hard:

• Technology stocks like Apple, which dropped nearly 9%, got crushed due to supply chain worries. These companies rely heavily on Chinese manufacturing.

• Retailers such as Nike fell over 14%, anticipating rising costs that could either eat into margins or raise prices for consumers.

• Airlines and transportation firms saw their outlook dim, with fears that rising import costs on parts and fuel could squeeze profits.

This is exactly why diversification matters. It doesn’t always feel heroic in the short term. But on days like today, it saves portfolios.

THIS ISN'T NEW: HISTORY REPEATS ITSELF

This isn’t the first time markets have reacted sharply to tariff news. Back in 2018, Trump introduced tariffs on steel and aluminum. The market panicked. Pundits declared trade wars imminent. But within a few months, headlines shifted and markets resumed their climb.

In fact, the S&P 500 ended 2019 up over 28%, despite early fears of economic fallout from tariffs.

And today’s 1,600-point drop? It’s big. But it’s not unprecedented:

• In 2020, we saw multiple 1,000+ point swings during the COVID crash.

• In 2018, the Dow dropped 1,175 points in a single day over inflation fears.

• In 2015, China devalued its currency and triggered a 1,000-point drop.

In nearly every case, the market recovered within 12–18 months.

WHERE WE GO FROM HERE: 6–12 MONTH OUTLOOK

No one has a crystal ball. But here’s what we expect over the next year:

1. Supply Chains Get Reshuffled
   Tariffs don’t kill demand—they shift costs. Companies will work to restructure sourcing, pass along price hikes, or absorb some margin compression. Expect rising costs and inflation pressures.

2. Consumer Goods and Retail Tighten
   Import-heavy sectors will feel the squeeze. Expect trimmed forecasts, slower hiring, and possible short-term layoffs in some sectors.

3. Retaliation is Likely
   Other countries may respond in kind. That creates short-term headwinds, but also sets the stage for eventual negotiation or policy rollback.

4. Markets Stay Jumpy
   Until we get clarity on the actual economic fallout, volatility will persist. That doesn’t mean it’s time to sell. It means it’s time to zoom out.

WHAT THIS MEANS FOR YOUR PLAN

Here’s the bottom line: your long-term plan is still working.

If you’re a client of Compound Advisory, you’re already prepared for days like this:

• You have 12–36 months of cash or low-volatility assets ready for use

• Your portfolio is broadly diversified across asset classes and geographies

• We use an active harvesting strategy to pull from strength, not weakness

• Your withdrawal schedule adjusts with market conditions

When you see red on your screen, remember: we’re not selling into panic — we’re executing a strategy.

SO, WHAT SHOULD YOU DO?

1. Zoom Out
   We say it often, but it’s true: volatility is normal. 1,000+ point drops happen. The S&P 500 has historically recovered from tariff-related drops within a year.

2. Stay the Course
   The cost of getting spooked is high. Missing the 10 best days in the market over a 10-year span cuts your return almost in half.

3. Rebalance Intelligently
   Market dislocations create opportunities. We look for tax-efficient ways to rebalance or capture losses while improving long-term positioning.

4. Lean on Your Plan
   This is why we plan in advance. So we don’t have to guess when the headlines get noisy.

LONG-TERM VIEW: STILL OPTIMISTIC

Despite the noise, the American economy remains strong:

• Unemployment is low

• Corporate earnings (outside of a few sectors) remain resilient

• Consumers are still spending

Yes, tariffs will cause friction. But like 2018, 2015, and even 2020 — markets adapt. Supply chains evolve. Investors adjust.

Remember: volatility is the cost of admission for long-term returns.

At Compound Advisory, we’re not watching the news to make investment decisions. We’re watching your plan to make sure it continues to deliver.

If you’re feeling uncertain, reach out. That’s what we’re here for.

Let’s keep compounding,

— Heath Harris
Founder, Compound Advisory