Tariff Uncertainty Is Back: Why Selling Into the Fear Has Rarely Paid Off
Tariff Uncertainty Is Back: Why Selling Into the Fear Has Rarely Paid Off
Marc Guberti, The Motley FoolMon, April 6, 2026 at 12:35 AM UTC
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Key Points -
Selling into fear can result in missed opportunities, especially for investors who end up selling near the lows.
Tariff news isn't new, as investors saw the S&P 500 crater at the start of 2025 only to end the year with an 18% gain.
Focus on fundamentals instead of short-term news and temporary headwinds.
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Tariffs appear to be back on the menu. Speculation is growing that President Donald Trump may raise tariffs to 15%, with White House trade advisor Peter Navarro recently saying that "it's in the process to happen."
The European Union is scrambling to reach a new trade deal; China opened an investigation into Trump's trade practices, suggesting a cold relationship between the countries; and Canadian tourism to the U.S. is still down sharply. All of those news items suggest the stock market may be in for a volatile few weeks, and that's not even including the Strait of Hormuz blockade.
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Although some investors get afraid by headlines like these, the truth is that selling into fear has rarely paid off. Buying and holding long-term investments has been a winning formula for many years, and this time likely won't be any different.
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When the stock market gets volatile and bad news piles in, many investors forget that benchmarks like the S&P 500 have performed well over the long run. This benchmark is up by 60% over the past five years.
Tariffs can affect earnings reports by reducing consumer spending and narrowing profit margins. However, those headwinds don't justify abandoning investments and strategies that have worked in the long run.
Tariffs aren't even new. Investors went through this dance in 2025, with the S&P 500 plunging by more than 10% in the first week of April. The S&P 500 started the year down by almost 20%, and investors were at their most pessimistic at the very bottom. The S&P 500 ended the year up by 18% over the full year, shrugging off initial tariff losses in the process.
Focus on fundamentals
Tariffs are short-term headwinds that do not change the fundamentals of most companies and industries. Artificial intelligence still had the same catalysts going into 2025, and while tariffs caused short-term hiccups, the long-term fundamentals propelled many AI stocks to all-time highs by the end of the year.
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Tech giants continued to launch new projects, healthcare companies continued to provide services, and consumer goods brands continued to pay dividends. Tariffs aren't wrecking balls that destroy financial markets, especially the potential boost from a 10% tariff rate to a 15% rate.
Last year, the tariffs came much more quickly and were far more uncertain. The tariffs between the U.S. and China, in particular, were practically a pseudo-embargo for both sides. Talks about high double-digit and 100%+ tariff rates became common between the two countries, and those rates would have made much commerce financially infeasible. The stock market rebounded from that noise, and the current tariff news is nowhere near as impactful.
Ignore the noise and know what you own. This clarity can help shareholders stay committed to their long-term winners instead of bailing out in the middle of corrections.
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