Charles’ Note: “A little disturbance is okay”…

That’s what President Trump said in his speech to Congress about the turmoil his tariff policy is creating for U.S. stocks.

I’m not so sure about how “little” it is… but we’re definitely getting some “disturbance,” all right.

With about a 3% drop yesterday, the S&P 500 is now at the same level it was at the start of last September.

That’s six months of gains wiped out. 

And the tech-laden Nasdaq fell by about 4% yesterday as well. That puts it in correction territory, which is defined as a 10% drop from a high.

So, what are we to make of it all as investors?

Today, we turn back to Freeport Society cofounder and legendary growth stock investor Louis Navellier.

Louis has been a professional investor for four decades. He’s seen just about every kind of market you can imagine.

As he explains below, despite all the negative news, he’s confident that the market pain is temporary and that the U.S. will grow and prosper.

That’s partly due to the true nature of Trump’s tariffs… and partly due to the ongoing AI Revolution.

Let’s dig in…

Stocks Are in Turmoil, But the Future Is Bright

By Louis Navellier, Editor, Breakthrough Stocks

The stock market is in turmoil… 

Yesterday, the tech-heavy Nasdaq plunged 4%.

That’s the biggest one-day drop since the 2022 bear market.

And over the past month, the Nasdaq, the S&P 500, and the Dow are down about 11%, 7%, and 6%…

As my colleague Charles Sizemore has been writing to you about, we’re living through the “Age of Chaos.”

And it’s in full swing.

Now, the mainstream media is blaming President Trump’s destabilizing approach to tariffs, Ukraine, and government staffing (among other things) for keeping the world on the edge of its seat.

But here’s what’s really behind the selloff – tariff fears and worries that the AI Revolution is slowing down.

Folks, I want to assure you: 

This tariff business is overblown.

And the AI Revolution is not slowing down.

First, we’ll get a lot more than one rate cut this year, no matter what the Fed is telling the press.

And rate cuts are good for stocks.

Second, as I’ve been pounding the table on, Nvidia’s March 20 event dedicated to quantum computing – aka “Q Day” – will be a catalyst that turns this market around.

So, you’ll want to mark Nvidia’s Q Day on your calendar. You’ll also want to set time aside this Thursday, March 13, at 1 p.m. ET for my Next 50X Nvidia Call summit. 

I’m hosting an online briefing on this event – one week before Nvidia’s big reveal. (Reserve your spot now.)

For today, I’ll show you what’s behind the market turmoil. I’ll also show you why I’m not concerned by any of it.

DeepSeek’s False Narrative Has Hit Tech Stocks Hard

Investors in the Nasdaq got up on the wrong side of the bed yesterday.

A lot of it has to do with a Bloomberg report that Apple is delaying its AI upgrades to its Siri system. That’s fueling a narrative that the AI Revolution is slowing down.

But that’s completely off base.

Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s largest chipmaker.

It just announced that February chip sales were up 40.1%. That’s stunning growth.

The problem we have is that rumors about Chinese AI chatbot DeepSeek keep swirling around Wall Street. 

Short sellers (folks who bet on stocks falling) have latched onto this theme. And they’re manufacturing fake article after fake article to perpetuate their bear case. 

But the claim that the U.S. AI buildout will slow because DeepSeek has a better, more energy-efficient product, is blatantly false. DeepSeek crashes all the time!

Unfortunately, the ball is rolling on this story. And it’s hard to stop. That’s why the U.S. tech sector has been hit hard. 

But that’s where the earnings are. Giant tech companies like Apple, Google, Amazon, and Meta are legal monopolies protected by the Trump administration. Notice their CEOs were all at his inauguration and paying for his parties and all that good stuff.

China Is Entering an Economic Tailspin

The tariffs have nothing to do with what’s happening in tech.

Besides, they’re not going to impact you because China just announced massive deflation. 

Everything – food, services, goods, doesn’t matter – is going down in price. 

China is going into this economic tailspin. 

It will be the next Japan. That means massive deflation and zero to negative interest rates for 20 years.

Why am I so bearish on China? 

Demographics. 

Its population is crashing. They forgot to have kids. They don’t have immigration. Other countries that forget to have kids at least have immigration. China doesn’t have that. So, it’s a mess. 

And it’s run by President Xi – an authoritarian who got rid of a lot of his capable officials that used to run the economy. Right now, Xi is running everything.

That’s why you’re not going to see any impact from these higher tariffs on Chinese goods. We’ve got a strong dollar. They have a weak yuan. And there’s deflation in China.

That means the prices of Chinese goods coming into America are also going down.

But that’s not all…

The Real Story Behind Trump’s Tariffs

Then there’s Canada and Mexico.

I’m sorry about the price of tequila going up from Trump’s tariffs. I’m sorry about baby-back ribs going up in Canada. And I wouldn’t buy eggs from our northern neighbor because they’re facing a 168% tariff. 

But as I mentioned on Fox News last week, Commerce Secretary Howard Lutnick says there’ll be no tariffs on the auto industry. They don’t want to disturb that industry – it’s a big one. 

And Canada has a new leader, Mark Carney. He used to run the Bank of Canada and the Bank of England. And he’s talking tough on tariffs, reminding folks that Canada beat the U.S. in hockey. But as tough as he can talk, the U.S. is 78% of the Canadian exports.

Also, Carney is a professional fellow who has never run for political office before. He will be able to work with Lutnick. Together they will be able to negotiate, and cooler heads will prevail.

Why I See Four Rate Cuts Coming in the U.S.

Europe has a lot going on. 

Germany was going to spend half a trillion euros on infrastructure and defense, and their interest rates skyrocketed. 

The problem is they can’t put together a ruling coalition. You may remember when Germany had an election, they ignored the party that had the second biggest share of the votes, the Germany-first AfD party.

So, the party with the most votes, the center-right CDU is still working with Olaf Scholz’s center-left party, the SPD. And they’re trying to get help from the Green Party to form a ruling coalition. But the Greens don’t like their defense spending and all that stuff. So, they’re in chaos.

Here’s the deal: The world’s in a recession. 

Mexico contracted in the fourth quarter. So did Britain, France, and Germany. 

Germany’s been contracting for over two years. 

And Asia’s a mess. 

This has led interest rates to collapse around the globe. 

Which means we’re going to have four rate cuts this year in the U.S. 

I don’t care what the Fed says. We’re going to have four cuts because things are collapsing.

Positive Signs for the U.S. 

In the U.S., we’re going to contract in the first quarter because foreign exporters are dumping goods here to get ahead of Trump’s tariffs. 

As a result, our trade deficit went up 34% in January. And due to how GDP is calculated we’re going to have to contract in the first quarter. (A rising trade deficit reduces net exports, which is a key component of GDP.)

But we’ll be growing in the second quarter, and we’ll avoid a recession, which is typically defined as two straight quarters of shrinking GDP.

Trump obviously doesn’t want a contracting economy. There are going to be tax cuts, which are pro-growth. 

They also want to take the DOGE savings and give some of that back to consumers. 

So, I’m very comfortable and confident that we’ll grow and prosper. 

Remember, tariffs are designed to bring jobs back to America.

We already have onshoring investments totaling $1.1 trillion. Earlier this month, Taiwan Semiconductor said it would invest $100 billion in three more chip manufacturing plants, along with two packaging facilities in Arizona.

Honda is building its new hybrid Accord in Ohio instead of Mexico. 

And Trump will try to get the German auto companies to boost their production in America to avoid tariffs, too.

It’s going to get interesting. 

It’s going to get very, very interesting. 

Trump is even willing to give their workers in Germany U.S. visas to come over here and work. 

Our electricity is a quarter of the cost of German electricity. So, we have a huge advantage. 

Canada also has an advantage because they have a lot of that cheap hydroelectric. That’s why there’s so much manufacturing in Ontario.

So, hang in there. I know you’ve been hurting. But the pain won’t last.

Sincerely,

Louis Navellier

Editor, Breakthrough Stocks

P.S. Don’t forget that a major turning point for the market will take place on Thursday, March 20. That’s when leading AI chipmaker Nvidia will announce a major move into quantum computing.

I predict Nvidia will figure out a way to marry AI with quantum computing in a way no one has ever done before. We’re talking about the possibility of a new technological breakthrough that could affect industries worth a combined $46 trillion.

Nvidia is still a solid “buy” for long-term investors. But if you want to make really outsized gains in quantum computing, look at the “pure play” quantum companies that Nvidia and other Big Tech companies are partnering with.

To learn more about that strategy, join me at my Next 50X Nvidia Call. Again, it’s this Thursday, March 13, at 1 p.m. Eastern.

My goal is to get you ahead of the crowd and ahead of the news outlets because by the time everyone on the street has heard about this, it will be too late.

Here’s that link again to reserve your spot.