Oil and Stocks Show Unusual Link in 2025 as Trump Tariffs Shake Global Markets
Oil and U.S. stocks are moving in sync in 2025 amid Trump’s trade tariffs, raising concerns about market risks and slowing global growth.
In 2025, something strange is happening in the financial world: oil prices and U.S. stocks are rising and falling together — and that has investors on edge.
Usually, oil and stocks don’t follow the same path. One might go up while the other drops, which helps investors spread risk. But this year, they’ve been moving in almost perfect sync. The reason? Worries about the global economy and unpredictable trade policies from the U.S. government.
A Strong Connection That’s Hard to Ignore
Since President Donald Trump returned to office in January, markets have been reacting sharply to his new wave of tariffs. These trade actions have sparked fear about slower global growth, and that fear is pulling oil prices and stock prices into lockstep.
In March, the connection between Brent crude (the global oil benchmark) and the S&P 500 index reached a correlation of 0.9 — almost a perfect match on the chart. That kind of link is rare and signals that both markets are being driven by the same concerns.
“The oil price isn’t being driven by inflation anymore. It’s all about growth,” said Shaniel Ramjee, co-head of multi-asset funds at a European investment firm. “That’s why oil and stocks are moving more closely together.”
Trade Policy Jitters Are Fueling the Pattern
Markets got a short-lived boost when Trump announced he would ease tariffs on several countries, even while increasing pressure on China. Stocks and oil both climbed, but oil prices quickly fell again, reminding investors how fragile the situation remains.
Analysts say this kind of behavior happens when investors are anxious about the future. “Oil and stocks usually track each other more closely when people are worried about an economic slowdown,” said one market strategist. “Right now, that worry is everywhere — and it’s made worse by policy surprises from Washington.”
Investors Are Rethinking Their Strategies
This tight link between oil and stocks is creating headaches for fund managers who rely on diversification to manage risk. Tim Evans, a veteran energy market advisor, pointed out that even if traders notice this trend, it’s still tricky.
“Just because oil and stocks are moving together doesn’t make it easier to predict where either one is headed,” Evans said. “If you’re confident about stocks, you’re probably better off trading the stock market than guessing where oil is going.”
Gold Takes the Spotlight as Oil Loses Its Shine
As oil becomes more volatile, some investors are turning to safer bets like gold. A key gold futures contract recently hit an all-time high as demand for the metal surged.
“We’re not bullish on oil right now,” said Luc Filip, head of investments at a Swiss private bank. “Tariffs are hurting demand, and that makes the oil outlook weaker.”
Other investment leaders agree. “Oil is more vulnerable when the economy starts to slow down,” said Antonio Cavarero, a top asset manager. “At a time like this, we’d rather be in parts of the market that aren’t at the mercy of sudden policy decisions.”
Ramjee added that if the U.S. tones down its aggressive trade stance, oil might start moving on its own again. “If tariffs ease up, the oil-stock connection could fade. But for now, growth worries are keeping them tied together.”
To handle the uncertainty, his team has taken a cautious approach — building up positions in gold and gold mining stocks, trading less often, and scaling back on risk as markets continue to swing.
Oil and stocks acting like twins in 2025 is more than a market quirk — it’s a sign of deeper anxiety about the global economy. And until trade tensions settle, investors may keep playing it safe.
