Weekly Market Update

Weekly Market Update

This tumultuous week saw trade tensions and economic uncertainty.
• Monday: US stocks plummeted after President Trump indicated no room for tariff negotiations with Canada and Mexico. The S&P 500 fell 1.7%, while the tech-heavy Nasdaq Composite dropped 2.6%. Nvidia (NVDA) tanked more than 8%.
• Tuesday: Stocks continued to decline, erasing post-election gains as tariffs on Canada, Mexico, and China took effect. The Dow Jones Industrial Average fell nearly 650 points.
• Wednesday: Markets rallied after President Trump provided a one-month auto tariff exemption on Mexico and Canada. However, the Nasdaq remains in correction territory.
• Thursday: Tariff whiplash continued, with stocks plummeting as investors assessed the impact of tariffs on trade war uncertainty. The Dow Jones Industrial Average fell 1%, while the tech-heavy Nasdaq Composite dropped over 2.6%.
• Friday: Stocks seesawed to cap a volatile week on Wall Street, with the Dow Jones Industrial Average rising 0.5% and the S&P 500 gaining 0.5%.

Key Takeaways:
• Trade tensions remain a major concern for investors, with stocks sensitive to tariff-related news.
• The Fed's stance on interest rates has yet to be fully articulated, but policymakers have signaled that they are not in a hurry to cut rates.
• Wall Street strategists point to Trump's likely first order of business: lowering bond yields, even if it comes at the expense of a falling S&P 500.

Market Insights:
• Jason Draho, head of asset allocation Americas for UBS Global Wealth Management, notes that the relevant Trump put right now is for Treasuries, and lower yields may be the best market indicator of success for Trump 2.0 policies.
• The 10-year Treasury yield has risen to 4.28%, but remains lower than its level when Trump took office.

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