Twenty-five years after the dot-com crash, current market conditions bear striking resemblance to historical inflection points. A confluence of factors, including escalating geopolitical tensions, unpredictable trade policies, and mounting stagflationary pressures, has created an increasingly complex landscape for investment decision-making.

Markets experienced a subtle shift last week as investors rotated capital away from recent outperformers. US equities edged higher, with the S&P 500 up 0.5%, supported by a strong “buy-the-dip” mentality – Bank of America reported the third-largest equity inflow since 2012. However, technical indicators remain weak, with the index still below its 200-day moving average and earnings estimates for Q1 2025 continuing to decline.

Amid the unpredictability of U.S. policymaking, investors are adapting to the noise, as evidenced by declining equity volatility. Investors shouldn’t lose sight of what truly matters: growth, inflation, and the dollar.

US growth is under pressure, with 2025 GDP forecasts sliding. Estimates now range between 1% and 2.2%, with major institutions like Goldman Sachs and Vanguard revising their projections downward. Rising trade tensions, financial tightening, and weakening labor market conditions are key concerns that could further dampen economic momentum.

Inflation remains a looming risk. While recent data has been stable, consumer expectations tell a different story. The latest University of Michigan survey shows households now anticipate inflation at 4.9% in 2025—nearly double earlier projections. Tariff uncertainty and broader economic concerns are fueling these fears, signaling potential turbulence ahead.

The US dollar could become a wild card under a second Trump administration. Key advisors have previously supported policies to weaken the dollar in an effort to boost exports. However, a deliberate devaluation could trigger inflationary pressures, increase import costs, and even challenge the dollar’s status as the world’s primary reserve currency.

With so much noise in the markets, investors should remain geographically diversified and consider holding gold as a hedge. And as sentiment shifts, perhaps it’s time for a different kind of debate – one that asks whether Starbucks is a better investment than Nvidia.