Trump Tariffs Trigger Stock Market Drop: Could The S&P 500 ETF (IVV) Be A Recession Proof Investment?

The recent market drop on President Trump’s ‘Liberation Day’ followed his execution of the new tariffs.

With the S&P headed for the worst drop in two years, these tariff threats have sparked fears of another trade war and possibly a recession, shaking investor confidence and adding more uncertainty to the markets.

For some investors, this may present a buying opportunity.

Events like this highlight how interconnected different factors—fundamentals, sentiment, and technicals—really are.

That’s why having a well-rounded approach like the Invest Diva Diamond Analysis (IDDA) framework is crucial for smart investing.

The IDDA framework helps you determine if an asset is right for you by breaking it down into five steps:

1. Capital Analysis – Understand your personal risk tolerance.
   
2. Intentional Analysis – Ensure your investments align with your goals, timeline, age, health, and lifestyle.
   
3. Fundamental Analysis – Assess the asset’s business and financial health to determine its viability.
   
4. Sentimental Analysis – Take note of emotional and psychological factors influencing the market.
   
5. Technical Analysis – Analyze price history to identify key levels for buying and selling.

In this post, we’ll explore how Trump’s tariff news is impacting the broader market. The iShares Core S&P 500 ETF (IVV) is one of the largest and most popular ETFs that tracks the S&P 500 Index, giving you exposure to 500 of the largest U.S. companies across various industries.

It’s a core holding for many investors and offers a strong reflection of the broader market. Let’s take a closer look at this ETF, using the IDDA, to see if it could be a potential buying opportunity for you.

IDDA Point 1 & 2 – Capital & Intentional

Capital and intentional analysis are unique to you. Before investing in IVV, ask yourself:

• Does this ETF align with your financial goals (growth, passive income, etc.)?
  
• Does it match your investment timeline (long-term, medium-term)?
  
• Are you comfortable with moderate risk and market exposure, especially during times of uncertainty?

Always listen to your intuition, but make sure your decisions reflect your values—not just tips from friends or influencers.

IDDA Point 3 – Fundamental

Overview of IVV:

• Issuer: BlackRock (iShares)
  
• Inception Date: May 15, 2000
  
• Expense Ratio: 0.03% (extremely low)
  
• Assets Under Management: $400B+
  
• Dividend Yield: ~1.3%-1.5%
  
• Holdings: Tracks the S&P 500 index (Apple, Microsoft, Amazon, Nvidia, Tesla, etc.)
  
• Sector Exposure: Tech-heavy, plus Healthcare, Financials, Consumer Discretionary

How It Works:

• Passively Managed: IVV automatically adjusts to follow the S&P 500.
  
• Full Replication: It holds all 500 stocks in their exact index proportions.
  
• Low Turnover: Less frequent trading = lower capital gains taxes.

Performance & Growth:

• Historically averages ~10% annual return.
  
• Pays quarterly dividends (reinvestable).
  
• Available on major platforms like Vanguard, Fidelity, Schwab, TD Ameritrade, Robinhood, and eToro.
  
• Fractional shares available (invest from $1).

IDDA Point 4 – Sentimental

Bullish Factors:

✅ Strong Long-Term Performance – Tracks the S&P 500, which has delivered ~10% annual returns over the long term.

✅ Ultra-Low Cost – At 0.03%, IVV offers one of the lowest expense ratios on the market.

✅ Diversification & Stability – With exposure to 500 of the largest U.S. companies across multiple sectors, IVV minimizes the risk tied to any single company or industry.

Bearish Factors:

❌ Market Risk – IVV reflects the performance of the U.S. market. If the market drops, IVV drops with it.

❌ Tech Concentration – Heavily weighted in tech stocks, which can underperform during rate hikes or regulation fears.

❌ Currency Risk – For international investors, a strong U.S. dollar can impact returns when converted back into local currency.

Current Market Sentiment 

⚠️ Recently, market sentiment took a hit following Trump’s Tariffs Liberation Day’. It stirred fears of a potential trade war, triggering a broad market selloff.

IVV, as a tracker of the S&P 500, is particularly sensitive to macroeconomic shocks like this, especially those that impact multinational companies.

Investors are now split—some view this as a short-term overreaction and a dip-buying opportunity, while others are pulling back, fearing prolonged geopolitical tensions.

Emotional Drivers at Play:

• Fear of renewed trade wars and economic slowdown or potentially recession.
  
• Frustration over market unpredictability tied to political headlines.
  
• Optimism from long-term investors who see this as a temporary shakeout.

IDDA Point 5 – Technical

On the weekly chart, the pattern has been in an overall uptrend and recently reached a new resistance level at 614. Two notable downtrends, or ‘pullbacks,’ can be seen—one during the March 2020 pandemic and another in 2022.

The future cloud is bullish however it is thinning. Previously the candlesticks have been sitting just above the cloud. 

The most recent candlestick reflects the significant market drop caused by Trump’s tariffs and has now dipped inside the Ichimoku cloud, reaching 507, which is a key psychological level and touching the 38% Fibonacci retracement level.

The lower band of the cloud is acting as support. If the price breaks through and falls below the cloud, it could signal downward momentum.

Investors who see this dip as a buying opportunity can consider these following buy limit entries:

Buy Limit Ideas

• $507.61 – High risk (current market price)
• $476.43– Medium risk
• $443.40 – Low risk

Invest Diva Confidence Compass Questions-

Before entering a trade at any level, ask yourself:

1. If I buy at this price and the price drops another 50%, how would I feel?
   Would I panic, or would I buy more to average down?
   
2. If I don’t buy at this price and the stock rallies, will I regret missing the opportunity?

Investing is personal. Only enter trades that align with your individual goals, timeline, and risk tolerance.

Final Thoughts 

Recent tariff threats have caused some worry about a trade war and a potential recession, which has made the market uncertain.

For investors looking to take advantage of this, the iShares Core S&P 500 ETF (IVV) can be a great option.

It tracks the S&P 500 Index, giving you exposure to 500 of the largest U.S. companies like Apple, Microsoft, and Amazon.

This ETF is beginner-friendly, low-cost, and highly diversified, making it popular amongst long-term investors who want steady growth and passive income.

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If you enjoyed my blog post about the ‘Trump Tariffs Trigger Stock Plummet: Could the S&P 500 ETF (IVV) Be a Recession-Proof Investment?’, you’ll love my post on ‘Uber’s Shock Update: How Its Venture into Self-Driving Vehicles Could Send This Stock Into Overdrive’

Disclosure: I am not a financial advisor, and this is not financial advice. This information is for educational purposes only. This post about Trump Tariffs may contain affiliate links, meaning I get a commission if you decide to make a purchase through my links, at no cost to you. Please see the terms of service page for more information.