In this video, Vanessa Welch, Empower vice president for financial insights, and Marta Norton, Empower chief investment strategist, address how major indices responded to the current macroeconomic situation with steep declines today. Here is a transcript:

Vanessa Welch: I'm Vanessa Welch here with Marta Norton, our chief investment strategist. And Marta, we are seeing a significant sell-off today — all major indices posting steep declines. What's getting hit the hardest?

Marta Norton: So, it's a “risk off” day in the markets. NASDAQ down 4%, small caps down something close to that. We're seeing Bitcoin off meaningfully. The areas that are holding up are those areas that are considered defensive, areas like consumer staples — down less than 1% — but the broad market really taking it on the chin.

Welch: Marta, you and I were talking earlier, and you shared that you believe President Trump's comments over the weekend really spurred a lot of this volatility. If you happened to miss it, the president said he would not rule out a recession — instead describing the economy as being in a period of transition right now. Marta, are you surprised that this rattled investors so much?

Norton: Well, think about what Trump has pointed to as a marker of his success in the past. He's often looked to the equity market and, when it rallies, sees it as an endorsement of his policies. So, I think it's a real mind shift for folks — for people to think that President Trump is actually going to look through this volatility as he pushes forward a tariff agenda. I think that is something that's the real driver and the real shift for investors to grapple with today.

Welch: So, does this change the facts on the ground? I mean, we already knew that tariffs were coming.

Norton: No, it really doesn't change the facts on the ground. We don't have any new or meaningfully different information around tariffs. The idea here — and the context here — is that valuations were very high heading into 2025. Analyst estimates for earnings were quite high. There was a lot of enthusiasm around a very business-friendly Trump administration. So, as we take a look at tariffs and think of them not just as negotiating tools but as a cornerstone of the America First fiscal policy, I think that is why we're seeing the volatility and why there's some vulnerability in the markets today.

Welch: Yeah, and the question that I keep hearing from people over and over again is: “Is this just a temporary blip, or the beginning of something more concerning?” And investors also want to know how to respond. What would you say there, Marta?

Norton: If you have a well-diversified portfolio, you are likely ready for this. Hang tight. Focus on your financial goals.

Welch: Yeah, sounds like patience and perspective are really, really crucial right now, Marta. Thanks for those reminders. And as always, thanks for your great insights. And big thanks to all of you for watching Market Moves. We'll be back on Wednesday to analyze the CPI report. Have a great week.