The U.S. stock market has been remarkably volatile in 2025. The S&P 500(SNPINDEX: ^GSPC) climbed over 4% in the first eight weeks of the year, then reversed directions and declined nearly 19% in the next seven weeks. The root cause of that volatility was economic uncertainty created by tariffs imposed by President Trump.
Given that U.S. trade policy is still evolving daily, does it make sense to buy stocks right now? Here's what investors should know about the current situation, including some brilliant advice from Warren Buffett.
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The stock market has been extremely volatility due to economic uncertainty created by President Trump's tariffs
The S&P 500 crashed after President Trump announced a severe slate of "Liberation Day" tariffs on April 2. The index was already trending lower due to duties previously imposed on goods from China, Canada, and Mexico, but the losses accelerated and the index closed 19% below its record high on April 8.
Esteemed business leaders spoke out about the likely consequences of the radical shift in U.S. trade policy. JPMorgan CEO Jamie Dimon warned economic growth would slow and prices would rise. And hedge fund billionaire Bill Ackman said the U.S. was on the brink of an "economic nuclear winter" that would damage its reputation around the world.
Meanwhile, Wall Street strategists reduced earnings estimates and increased recession probability forecasts. But President Trump made a partial U-turn on April 9 and paused for 90 days his country-specific reciprocal tariffs, while leaving the 10% universal tariff in place.
The S&P 500 has since recovered to some degree. It recently strung together nine consecutive daily gains to clinch its longest win streak in two decades. Yet, the index is still 9% below its high, and the U.S. economy is still in a precarious position because the average tariff rate is at its highest level since the 1930s, according to JPMorgan.
That brings me back to the original question: Is it smart to buy stocks right now? Investors should consider this advice from Warren Buffett.
Warren Buffett warns against market timing strategies because no one can consistently anticipate short-term moves in stocks
Warren Buffett is one of the most successful stock pickers in American history. His patient, value-oriented investment strategy is the primary reason Berkshire Hathaway shares have compounded at 20% annually in the last six decades. Buffett during that time has doled out reams of insightful advice, but the following quote is especially relevant today.
"I can't predict the short-term movements of the stock market. I haven't the faintest idea as to whether stocks will be higher or lower a month or a year from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up."
Readers shook take two things from that quote: First, it is impossible to predict short-term movements in stocks consistently. Second, investors that wait for sentiment to improve and economic uncertainty to dissipate before buying stocks will likely miss substantial gains.
Warren Buffett recommends buying stocks whenever the price is right, regardless of the market environment
Importantly, while Buffett highlighted the pitfalls of market timing strategies, that does mean you must be fully invested at all times. It simply means temporary headwinds like bearish sentiment and economic uncertainty should not dissuade you from buying good stocks when opportunities arise. The next Buffett quote adds context.
"Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily understandable business whose earnings are virtually certain to be materially higher five, ten, and twenty years from now. Over time, you will find only a few companies that meet these standards -- so when you see one that qualifies, you should buy a meaningful amount of stock"
Additionally, Buffett gave the following advice at Berkshire Hathaway's annual meeting in 2020. "You've got to be prepared when you buy stock to have it go down 50% or more and be comfortable with it." He mentioned Berkshire shares have fallen more than 50% three times since 1965, yet the stock has still compounded at 20% annually since then.
Here's how I reconcile Buffett's advice with the current market environment: Tariffs have created a great deal of fear and uncertainty, but investors cannot let those emotions stop them from buying quality stocks when they trade at reasonable prices. Moreover, investors should not beat themselves up if a stock falls sharply. So long as the original purchase was made at a fair valuation and the company's earnings continue to grow, patient investors are likely to turn a profit in the long run.
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JPMorgan Chase is an advertising partner of Motley Fool Money. Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and JPMorgan Chase. The Motley Fool has a disclosure policy.
