Weekly Market Update

Weekly Web Post: Tariff-Induced Volatility Continues to Affect US Stocks

As we continue to navigate the uncertain landscape of President Trump's tariff policies, US stocks remain volatile. Despite a temporary reprieve for tech companies and consumer electronics, investors are bracing for potential tariffs on pharmaceuticals and semiconductors.

Key Takeaways:
• US stocks edged higher on Monday as investors focused on tech's temporary reprieve from President Trump's tariffs.
• The S&P 500 trimmed bigger gains to rise a healthy 0.8%, while the Dow Jones Industrial Average was up around 0.7%.
• Tech-heavy Nasdaq Composite fell around 0.1% after all three indexes ticked higher earlier in the trading day.
• On Tuesday, US stocks drifted lower as investors considered the latest developments on President Trump's tariffs, including a potential auto sector reprieve and concrete steps toward new semiconductor duties.
• The benchmark S&P 500 dropped around 0.2%, while the Dow Jones Industrial Average shed just over 150 points, or around 0.4%.
• US stocks tumbled on Wednesday with tariff fears returning to Wall Street in earnest, as Nvidia revealed costly new curbs on chip exports to China and Fed Chair Jerome Powell warned of the challenging impacts to come from the uncertainty around President Trump's trade policy.
• The major averages closed the week lower, with the Nasdaq and Dow falling over 2.5%, while the S&P 500 was down around 1.5% for the week.

What's Next:

As investors continue to navigate this uncertain landscape, it's essential to stay informed about the latest developments in trade policy. With potential tariffs on pharmaceuticals and semiconductors looming, the impact on US stocks could be significant.

Insight from Experts:
• Michael Gapen, Morgan Stanley US chief economist, noted that President Trump's policies have made regular economic data "noisy," complicating investors' outlooks on the market.
• Gapen also emphasized the importance of looking at monthly employment reports to gauge the labor market's health and potential impact on the economy.

Recommendation:

Consider diversifying your portfolio by investing in sectors that are less affected by tariffs, such as consumer staples or healthcare. However, keep in mind that no investment is completely immune to market volatility.