DThe stock market has taken a beating thus far in March, with the S&P already down 8.6% from its February peak. Worse yet, all the major indexes have fallen back to their pre-election levels.^[1]

Not surprisingly, this has led to a rising tide of pessimism about the market and the economy, including increased fears that the U.S. may soon fall into a recession.

That anxiety is clearly seen in the Cboe Volatility Index, commonly known as the stock market’s “fear gauge.” As of March 11, it’s up 62% for the year.

However, Yardeni Research, a respected investment strategy consulting firm, is more optimistic and suggests that investors take a longer-term view.

Betting on the Resilience of the U.S. Economy

As the firm said in a note released in the second week of March, “We continue to bet on the resilience of the American economy. We expect that pro-business policies, as they emerge, will boost longer-term confidence, allaying short-term uncertainties related to Trump 2.0.”

Much of the blame for the market’s woes is falling on President Trump’s tariff policies and the uncertainty they have created.

According to Tom Essaye of the financial research firm Sevens Report Research, it’s not the tariffs themselves that are causing all the trouble. He says it’s “the sort of just complete chaotic, whiplash-infused, seemingly directionless policy. That’s the issue.”

Michael Arone, chief investment strategist at State Street Global Advisors, echoed those concerns saying, “Many investors support the president’s pro-growth business agenda, but the administration’s frenetic approach to policymaking is unsettling.”

President Trump: “What We’re Doing is Very Big”Another factor is the President’s apparent willingness to accept a recession as the price to be paid to bring America back from the brink of disaster. On Fox News’s “Sunday Morning