Weekly Market Update

Weekly Market Recap: Tariff Tensions Continue to Impact US Stocks

The market is still reeling from the effects of President Trump's tariff plans on Canada, Mexico, and China. The tech-heavy Nasdaq Composite (^IXIC) took a hit, closing down 1.2% on Monday, while the S&P 500 (^GSPC) fell roughly 0.7%. Consumer discretionary (XLY) stocks were particularly affected, with automakers and other consumer-facing companies feeling the pinch.

On Tuesday, US stocks closed higher as investors assessed China's retaliatory measures against the US tariffs. The Dow Jones Industrial Average (^DJI) gained around 0.3%, while the S&P 500 (^GSPC) rose roughly 0.7%. However, tensions remain high as both countries continue to engage in a tariff tit-for-tat.

Wednesday saw a mixed day for stocks, with earnings from Alphabet (GOOG, GOOGL) and AMD (AMD) falling short. Big Tech got a boost from a jump in Nvidia (NVDA) shares, but other tech-related results were scrutinized for signals about the strength of AI demand.

On Thursday, investors were awaiting Amazon's quarterly report, which ultimately disappointed with worse-than-anticipated first-quarter sales guidance. The tech giant's stock dropped around 3%. Treasury Secretary Scott Bessent's comments on easing borrowing costs also impacted market sentiment.

Friday brought a decline in stocks as investors reacted to the threat of more possible tariffs from the Trump administration. The S&P 500 (^GSPC) moved almost 1% lower, while the tech-heavy Nasdaq Composite (^IXIC) slid around 1.4%. The Dow Jones Industrial Average (^DJI) also fell more than 400 points, or almost 1%.

Key Takeaways:
• Tariff tensions continue to impact US stocks, with consumer discretionary (XLY) and tech-related results being particularly affected.
• China's retaliatory measures against the US tariffs remain a concern for investors.
• Earnings from Alphabet (GOOG, GOOGL) and AMD (AMD) fell short, while Nvidia (NVDA) shares got a boost.
• Treasury Secretary Scott Bessent's comments on easing borrowing costs impacted market sentiment.
• Amazon's quarterly report disappointed with worse-than-anticipated first-quarter sales guidance.

Investment Implications:
• Investors should remain cautious and continue to monitor the situation as tariff tensions escalate.
• Big Tech companies, particularly those in the AI space, may be impacted by the ongoing trade war.
• Consumer discretionary (XLY) stocks may experience volatility due to concerns over tariffs.
• Treasury yields may rise if inflation expectations continue to increase.

What's Next?

As we move into the new week, investors will be watching for further developments on the tariff front. Earnings season continues, with more companies reporting their quarterly results. Market sentiment remains uncertain, and traders should remain vigilant as the situation unfolds.