March came in like a lion and pretty much went out like a lion, too, at least for investors. It was the worst month for U.S. stocks in more than two years, capping off the worst quarter in almost three years.
The reasons are no mystery, as the economy is grappling with new policies from the Trump administration, including tariffs and massive job cuts. These policies have created uncertainty and are expected to lead to higher inflation and lower growth.
Economists at Goldman Sachs have called it a “consumer crisis” and higher tariffs will likely make things worse.
The gory details show that the Nasdaq Composite entered into a correction, dropping 10.4% in the first quarter. That includes an 8.2% decline in March alone.
The S&P 500 fell 4.6% in Q1 with most of the damage coming in March. The large-cap benchmark fell 5.7% in March.
The Dow Jones Industrial Average performed a little better, as the blue-chip index was down just 1.3% in Q1 and 4.2% in March.
For the Nasdaq and S&P 500, it was the worst quarter since Q2 of 2022 during the year-plus long bear market. It was also the worst month for those indexes since December 2022.
There was nowhere to hide for stock investors, as the Russell 2000 small cap index dropped 9.7% in Q1 and 6.0% in March. The S&P 400 MidCap index plummeted 6.5% in the first quarter and 5.7% in March. Bitcoin was also down, sinking 10.7% in the quarter and 2.4% in March.
The one true bright spot was gold, which surged 21.4% in the first quarter, marking its best quarter since 1986. It is currently trading at an all-time high of over $3,100 per ounce.
CVS, Philip Morris, Newmont Gold Were Top Stocks
The names atop the list for the first quarter included none of the usual suspects from past quarters, like NVIDIA (NASDAQ:NVDA), Palantir (NASDAQ:PLTR), or Broadcom (NASDAQ:AVGO).
The top stocks in Q1 were mostly deep value stocks that had been beaten down over the past few years, or consumer staples that thrive when markets go lower.
CVS (NYSE:CVS), the beaten down pharmacy chain, was the best stock in Q1, returning 51% in the quarter to increase its stock price to almost $68 per share. CVS gained mostly on momentum from a turnaround plan, after struggling over the prior three years.
Philip Morris (NYSE:PM), the tobacco company, was the second-best stock in the first quarter, rising 30.1% to over $158 per share. Philip Morris tends to perform well when the market doesn’t, as its products are in demand whether times are good or bad.
The third best stock in the quarter was Newmont Corp. (NYSE:NEM), one of the leading gold mining companies. Given the meteoric rise of gold prices this quarter, it is not hard to see why Newmont has performed so well. The stock was up about 26.7% in the first quarter to around $48 per share.
Tesla and NVIDIA Struggle
There has been no shortage of coverage of Tesla’s woes over the past three months, as its CEO Elon Musk, has become the Trump administration’s righthand man as the leader of the new Department of Government Efficient (DOGE). That has led to backlash and protests, and it has hurt sales and damaged Tesla’s brand.
It has also crushed the stock price, as Tesla (NASDAQ:TSLA) stock fell 42.7% in the first quarter to about $260 per share. That’s down from an all-time high in December after Trump was elected president.
The only stock on the S&P 500 that was worse was Deckers Outdoor (NYSE:DECK), a shoe company that suffered due to a uncertain outlook for 2025. Decker was down 46.6% in the quarter to around $111 per share.
Another stock that receives no lack of attention, NVIDIA also had a rough quarter. NVIDIA was the worst performer on the Dow Jones Industrial Average, dropping 22.1% in the first quarter and 12.9% in March.
NVIDIA had strong results, rolling out its new Blackwell chips. Its correction is more tied to its high valuation and an overall negative sentiment toward overpriced AI stocks.