Weekly Market Insights
Stocks traded in a mixed fashion last week as investors navigated trade and tariff developments, varied earnings, and generally favorable economic data. The S&P 500 slipped 0.24% over the week but remained 2.45% year-to-date.
The week began with sharp declines due to the implementation of tariffs by the U.S. on Mexico, Canada, and China. However, markets recovered as the U.S. and Mexico reached an agreement to delay tariffs, easing immediate concerns about an escalating trade war. Additional relief came when Canada postponed its tariffs, and China signaled a delay in its retaliatory measures, leading to a rebound in equities midweek.
Earnings results from major tech companies weighed on investor sentiment, but softer inflation data and a global bond rally provided support. The market also responded positively to dovish signals from central banks, including the Bank of England’s downgraded growth outlook for 2025, which helped stocks stabilize after a bout of volatility.
The week closed on a mixed note. A lukewarm jobs report initially buoyed markets on Friday, but rising consumer inflation expectations triggered selling pressure, leaving the S&P 500 down by the end of the session.
Bonds were mostly flat with the 10-year treasury yield losing about .10% for the week while the US Dollar is trading at if lowest level in weeks. Tariffs and trade war talks coupled with fears of inflation and a falling USD provided the perfect backdrop for gold to rally to new highs with industrial metals performing even better. Oil was the clear looser in the commodity space, trading down nearly 4% for the week.
This week, all eyes are on inflation data with the CPI (retail inflation) due on Wednesday and the PPI (wholesale inflation) on Thursday, Recently, the declining trend of inflation has stalled, even ticking up slightly, leading to a pause in rate cuts making every inflation and jobs report crucial. President Trump is also expected to announce reciprocal tariffs on countries imposing tariffs on U.S. goods, likely affecting the EU, Thailand, Taiwan, Vietnam, Japan, Malaysia, and India who are some of our largest trading partners. This could certainly cause some volatility along with the 778 companies that will be reporting earnings this week.
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Past performance is not indicative of future results. This material is not financial advice or an offer to sell any product. The statements contained herein are solely based upon the opinions of Edward J. Sabo and the data available at the time of publication of this report, and there is no assurance that any predicted or implied results will actually occur. Information was obtained from third-party sources, which are believed to be reliable, but are not guaranteed as to their accuracy or completeness.
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