Should You Buy a S&P 500 Index Fund Before April 2?

The broader benchmark S&P 500 index has gotten off to a less-than-ideal start in 2025, down about 4% this year. It also briefly flirted with correction territory from highs seen in mid to late February. Concerns about the economy, growth, and President Donald Trump's trade war seem to be weighing on the market, although it had also gotten expensive after a two-plus-year bull run.

The path forward remains murky, with Trump seemingly changing his mind on tariffs by the day and investors reexamining how far the administration will go to achieve its goals. A key deadline in the saga is fast approaching. Should investors buy the market before April 2?

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The significance of April 2

On the campaign trail, Trump talked up his plan to implement tariffs and continue work from his first term in order to level the playing field and make American businesses more competitive. Of course, there is a wide dispute on the impact of tariffs and what they accomplish over time. Many economists believe they are effectively a tax on U.S. consumers and could drive up inflation.

Upon taking office, Trump began to implement tariffs, which seemingly have hit the market pretty hard. Many investors assumed the administration would use tariffs largely as a bargaining chip and not actually implement them to the magnitude discussed in the campaign. However, Trump has implemented 25% tariffs on all steel and aluminum imports. He's also levied 25% tariffs on Canadian and Mexican imports and 20% tariffs on China. However, Trump then delayed tariffs on many Canadian and Mexican imports until April 2.

Trump also plans to levy sweeping reciprocal tariffs, charging countries the same level of tariffs they impose on U.S. goods. These are also slated to go into effect on April 2. On March 17, Trump still seemed set to implement said tariffs, saying, "April 2 is a liberating day for our country." Trump also told reporters he has no plans to ease up on tariffs despite concerns about the market.

Image source: Getty Images.

Should you take Trump at his word?

Investors have been trying to figure out whether to take Trump at his word since he was sworn into office. The famed deal maker can be unpredictable, after all, and doesn't seem to mind keeping people in the dark. While investors and strategists argue over how much the market is responding to tariffs, there certainly seems to be a lot of movement on days when Trump announces tariff-related news.

If the president goes ahead with all of his tariff plans, it will be another signal to investors that Trump is serious about what he says and is likely willing to live with some market pain to achieve his administration's broader goals. If Trump forges some kind of trade deals with Mexico and Canada, then perhaps he really does plan to use tariffs as more of a negotiating tactic. It's also entirely possible the administration punts again and decides to delay tariffs for another few weeks or a month.

Either way, investors should not try to trade this event. As I mentioned above, Trump is unpredictable, and short-term trading is bad practice in general. Even if you think you know the outcome of an event, you never truly know how the market will respond. The psychology of the stock market has puzzled investors since the dawn of the stock market.

Now, that doesn't mean you can't buy a stock or even invest in the S&P 500 right now. Just make sure you are taking a long-term approach. Tariffs from Trump's first term are still in effect, and the market has rocketed since then. History tells us that stocks will eventually move higher, even if there is short-term volatility or a sell-off. That's why it's never a bad idea to dollar-cost average, where you invest a similar amount of money over regular intervals, which tends to smooth out your cost basis over time.

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Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.