Markets were on the rope this week regarding tariff policies. Will they shake off the blows or are they just trying to stay on their feet?
Monday
S&P 500 1.76% | NASDAQ 2.64%
Markets plummeted on news of the imposition of 25% tariffs on Canada and Mexico’s goods starting Tuesday, March 4th. Chinese tariffs were also set to increase, sending major tech companies and broad markets lower on persistent inflationary concerns.
Tuesday
S&P 500 1.22% | NASDAQ 0.35%
As expected, China and Canada imposed retaliatory tariffs following the U.S. levy announced on Monday. Equity markets took the backlash while bond markets saw some bounce back after Monday’s shift to safety.
Wednesday
S&P 500 1.12% | NASDAQ 1.46%
Markets fell early as tariff forecasts are expected to stunt economic growth. The White House has indicated that it will take some time during this transition but will generate more jobs and additional revenue with the onshoring of manufacturing later down the road. Markets rebounded by midday on news that automakers would get a 1-month window before tariffs kicked in.
Thursday
S&P 500 1.78% | NASDAQ 2.61%
Markets wasted little time pushing the eject button on Thursday morning. The sell-off continued as a large increase in the trade deficit (increased imports) proved that U.S companies are stocking up on materials and goods ahead of the ever-moving tariff deadline. Large deficits in trade weaken U.S. GDP forecasts which are now projected to decline in the 1st quarter of 2025..
Friday
S&P 500 0.55% | NASDAQ 0.70%
Markets swung wildly on the day as the jobs added figures came in relatively close, but just shy, of forecasts. The Volatility Index (VIX) was above 23 the entire day (comfort level hovers at 18 or below). A strong labor market was the silver lining in a week where the market took punches like a punching bag.
Conclusion
S&P 500 3.10% | NASDAQ 3.45%
The pause in tariffs threw markets into disarray as guidance continues to change from week to week. If a stable policy directive is put in place, markets could return to an environment of less price movement. The problem is that it doesn’t seem to be in sight at this moment. The major indexes all declined as a fall in U.S. production worried outlook. We appear to be in a slugfest in the first couple rounds of a potential trade war, but markets are waiting for the opportunity to gain back its strength. If the tariffs reset trade imbalances this could prove beneficial for economic stimulus in terms of job creation. On the other hand, worries could continue to mount that this could last longer than desired and weaken economic growth.
~ Your Future… Our Services… Together~
Your interest in our articles helps us reach more people. To show your appreciation for this post, please “like” the article on one of the links below:
FOR MORE INFORMATION:
If you would like to receive this weekly article and other timely information follow us, here.
Always remember that while this is a week in review, this does not trigger or relate to trading activity on your account with Financial Future Services. Broad diversification across several asset classes with a long-term holding strategy is the best strategy in any market environment.
Any and all third-party posts or responses to this blog do not reflect the views of the firm and have not been reviewed by the firm for completeness or accuracy.