Weekly Market Update

Weekly Market Update: Tariff Turbulence Continues

As we head into the second week of April, the stock market remains in a state of flux due to President Trump's ongoing tariff policy. The S&P 500 and Dow Jones Industrial Average have experienced historic gains and losses over the past few days, leaving investors uncertain about the market's direction.

Key Takeaways:

1. Tariff Uncertainty Remains: Despite Wednesday's rally, economists and strategists are cautioning that the current state of play is still shrouded in uncertainty. The 90-day tariff delay may be temporary, and prolonged uncertainty could lead to further market volatility.
2. Recession Risks Remain: Economic growth data has slowed to start 2025, and the fear of businesses investing less as they wait for more information on tariffs continues to cast a shadow over the outlook for stocks.
3. Consumer Sentiment Tumbles: Consumer sentiment has plummeted to its lowest level since 2022, with consumers expecting inflation to surge in the year ahead due to President Trump's tariff policies.
4. China Raises Duties: China has raised duties on imports of US goods to 125%, effective Saturday, in response to Trump's ballooning reciprocal tariffs on China.

Market Performance:
• The S&P 500 (^GSPC) rose 1.8% on Friday to cap a chaotic week.
• The tech-heavy Nasdaq Composite (^IXIC) climbed 2.1%.
• The Dow Jones Industrial Average (^DJI) advanced 1.5%.

Expert Insights:
• Renaissance Macro's Neil Dutta cautions that "this is more 'sell the rip' than 'buy the dip'" due to prolonged uncertainty.
• Northwestern Mutual Wealth Management Company's Brent Schutte notes that "there's still a lot of uncertainty out there," and the outlook for publicly traded companies remains murky.

Upcoming Events:
• First quarter earnings season begins in earnest this week, with results from JPMorgan (JPM), Wells Fargo (WFC), and BlackRock (BLK) expected to be released.
• The benchmark 10-year Treasury yield (^TNX) is expected to continue its upward trajectory.