Market Update
Stocks endured their worst weekly performance since the COVID crisis, with the S&P 500 declining by 9.08% amid escalating trade tensions. Consumer discretionary, industrials, communication services, financials, and energy sectors faced the steepest declines, while utilities remained relatively stable.
Despite early-week gains, markets turned negative in response to President Trump’s tariff announcement on Thursday and comments from Federal Reserve Chair Jerome Powell, suggesting the administration’s economic policies could increase risks of unemployment and inflation.
Economic Update
March employment data surpassed expectations with the addition of 228,000 jobs. The unemployment rate increased slightly to 4.2%, and average hourly earnings rose modestly, reflecting continued wage growth.
The manufacturing sector contracted in March due to lower new orders and higher input prices. Conversely, the services sector showed resilience, expanding despite higher operating costs driven by strong customer demand.
Looking Ahead
This week’s inflation report, specifically the Consumer Price Index (CPI), will provide insights into consumer prices and potential future Fed policy responses. Investors will closely monitor these figures to gauge the trajectory of inflation, which rose by 0.2% in February and 2.8% over the past year.
Markets are pricing what seems to be a worst-case tariff scenario. Any reprieves or reductions in tariffs imposed by the US could provide equities with an immediate rally.
For a more detailed analysis of last week’s markets and economic trends, check out the latest issue of Market Week.
Follow us on Facebook for these weekly updates and articles at Unify Financial Advisors Facebook Page.
Thank you for reading! You are welcome to contact me directly with questions or comments.
Regards,
David Bennett
