Job Cuts to Continue? The Rising Tide of Layoffs in 2025

The past week on Wall Street has been anything but dull.

March 6th and 7th saw dramatic shifts, as tariff threats, a tech correction, and economic jitters rattled investors.

If this week was any indication, we’re in for more market turbulence ahead.

The story is starting to feel like a rerun of past crises with some new twists.

Tariff Tensions and Trade War Shadows

On March 6th, the Trump administration took a temporary breather, delaying tariffs on auto parts from Canada and Mexico until April 2.

This brief pause gave automakers like Ford and GM a small boost, lifting their stock prices by 5% and 2.7%.

But don’t be fooled. It was just a momentary reprieve.

The larger threat of a 25% tariff on billions of dollars worth of goods still looms, casting a long shadow over U.S. industries and consumers.

These tariffs have echoes of the Smoot-Hawley Tariff Act of 1930, a piece of legislation that worsened the Great Depression.

Fast-forward to today, and we could see similar damage especially to automakers.

If these tariffs stay in place through 2025, U.S. automakers are staring down a potential $12 to $18 billion hit to their profits.

China has added fuel to the fire by slapping tariffs on $13.9 billion of U.S. energy and farm exports.

It’s a messy, global game of tit-for-tat.

A hedge fund manager summed it up best: "This isn’t a trade war, it’s a trade circus," reminding us just how unpredictable things are right now.

Despite this chaotic backdrop, some sectors are finding their footing.

Steel stocks, like ArcelorMittal, are up, possibly benefiting from rumors of tariff exemptions.

Meanwhile, oil giants like ExxonMobil and Chevron are feeling the pinch, with China’s tariffs dampening demand for U.S. energy exports.

The wild fluctuations on Wall Street mirror the great trade battles of the past echoing the fears that once plagued the Great Depression.

The AI Bubble Pops

It wasn’t just tariffs driving the chaos.

March 6th marked a pivotal moment for tech stocks, with the Nasdaq Composite slipping into correction territory.

The AI bubble that had driven a surge in tech stocks began to deflate, and fast.

Marvell Technology, a key player in the AI chip market, saw its stock plummet 19%, despite posting strong earnings.

The CEO’s remarks about inconsistent demand for AI chips weren’t exactly what investors wanted to hear.

This downturn had investors flashing back to the dot-com bust of the early 2000s when tech stocks got ahead of themselves, only to crash hard.

Other big names in AI, Nvidia and AMD, saw their stock prices fall by 4-6%, erasing a staggering $180 billion in market value.

But in the chaos, some companies found opportunity. Broadcom surged 10%, thanks to a 25% increase in its AI revenue.

Meanwhile, Super Micro Computer jumped 20% after resolving a SEC probe.

As with every major shift in tech, some firms ride the wave, while others are caught in the undertow.

The tech scene is starting to feel a bit like the early days of the personal computer boom, a few winners and a lot of casualties.

Even cryptocurrencies, which have been on the rise, felt the aftershocks.

MicroStrategy and Coinbase gained ground after former President Trump tweeted his support for Bitcoin.

If anything, this moment signals how intertwined politics and tech have become, much like the way the tech world was once influenced by Bill Gates in the ‘90s.

Economic Jitters and Retail Reckoning

Beyond tariffs and tech, the broader economy is starting to show signs of strain.

February’s jobs report revealed a troubling spike in layoffs, 172,017 jobs lost, a staggering 245% increase from January.

This sudden surge in job cuts is starting to resemble the early 2000s, remember the dot-com crash?

It’s beginning to feel like déjà vu, as the economy shows signs of strain similar to the burst of the last tech bubble.

Major retailers like Macy’s are cutting jobs, and the federal government is slashing its workforce as part of a "DOGE" efficiency program.

If the job losses continue, we may be entering a new era of stagflation.

In the retail sector, the uncertainty from tariffs is wreaking havoc.

Companies like Target and Best Buy are struggling, while others like Gap are managing to stay afloat by slashing costs.

It’s the same story we saw in the 2008 financial crisis, those who can adapt survive.

On the flipside, stocks in “safe” consumer goods companies, like Campbell Soup, are doing well.

It’s like a rewind to the 2008 market downturn when investors flocked to the safety of steady companies while others crumbled under pressure.

The Ripple Effect on Global Markets

It’s not just the U.S. feeling the heat. Global markets have mirrored the volatility.

In Germany, the DAX rose following a massive $220 billion stimulus package and a reprieve from tariff concerns.

The UK’s FTSE 100, however, dropped fueled by a strong pound and falling oil prices.

Meanwhile, Japan’s Nikkei struggled, as the yen weakened, and China’s Hang Seng dropped amidst fears about property debt.

It’s becoming clear that in today’s globalized market, volatility in one region doesn’t just stay contained.

The whole world seems to be on edge.

The Path Through Uncertainty

With the VIX (the fear gauge) spiking 13.4%, the outlook for the market is shaky at best.

Investors are recalibrating, trying to figure out how to play the hand they’ve been dealt.

The best advice right now?

Diversification.

Spreading investments across asset classes is key to surviving sector-specific risks.

The "barbell strategy" is also gaining traction mixing high-growth stocks like Broadcom with more defensive plays like Campbell Soup.

The next big event that could sway market sentiment is the Federal Reserve meeting on March 18th.

Will they raise rates?

Or will they take a more cautious approach in light of economic uncertainty?

Investors are holding their breath, as the Fed’s decisions will likely set the tone for the next phase of market activity.

As this market story unfolds, one thing is clear: we’re witnessing a mix of old lessons and new challenges.

Much like the tech booms and busts of the past, the volatility today is both an opportunity and a warning.

Investors must navigate this landscape carefully, balancing risk and reward in a time of unprecedented uncertainty.

The twists and turns of this market are far from over.

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Disclaimer: This newsletter is for educational purposes only and should not be considered financial advice. Always conduct your own thorough research before making any investment decisions.