Stocks wrapped up another volatile week with mixed results. The S&P 500 (SPX) gained 0.28%, while the Dow Jones Industrial Average (DJIA) ended the week with a loss of 1.14%. The tech benchmarks Nasdaq Composite (NDAQ) and Nasdaq-100 (NDX) fell by 0.62% and 0.47%, respectively.
The S&P 500 managed to edge higher on Thursday, despite slumping in the last hour of trading on President Trump’s threats to fire Fed Chair Jerome Powell. The broad market index rose as investors – including the institutional ones – bought the dip after Trump backpedaled on his most punitive tariffs and signaled willingness to negotiate with the U.S. trading partners. At the same time, the blue-chip DJIA was driven down by a tumble in UnitedHealth stock following its disappointing guidance.
Meanwhile, the Nasdaq Composite and Nasdaq-100 fell over the second half of the holiday-shortened week, driven down by a renewed slump in semiconductor stocks following enhanced restrictions on exports to China. The tariff theme apparently continues to sway the market’s direction, with the uncertainty running high.
Economists warn that tariffs could cause a recession if fully implemented and remain in place for some time. Although Trump signaled that trade negotiations with several countries could lead to lower tariffs, reigniting Wall Street hopes, the on-again-off-again rollout of the levies could also damage the economy. The notable drop in consumer sentiment and a surge in household inflation expectations are a testament to the extent of harm caused by the lack of policy clarity.
Meanwhile, Federal Reserve Chair also contributed to the dampening investor sentiment. Jerome Powell reiterated that the Trump administration’s tariffs are “significantly larger than anticipated,” threatening to slow the economy and raise inflation further. At the same time, he continued to emphasize that the Fed’s preference to “wait for greater clarity” on the impact of policy changes.
While stock market declines are not generally seen as a cause for the central bank to step in and cut interest rates, this “wait and see” approach is now drawing fire from different directions – not to mention President Trump’s dissatisfaction. Many analysts and strategists are now wondering whether the Fed is already behind the curve, refusing to act only to be forced into stronger actions later by the unforgiving reality.
Three Economic Events
Here are three economic events that could affect your portfolio this week. For a full listing of additional economic events, check out the TipRanks Economic Calendar.
» April’s S&P Global Manufacturing PMI and Services PMI (preliminary readings) – Wednesday, 04/23 – PMI indices are leading economic indicators used by economists and analysts to gain timely insights into changing economic conditions, as the direction and rate of change in the PMIs usually precede changes in the overall economy.
» March’s Durable Goods Orders – Thursday, 04/24 – This report measures the cost of orders received by manufacturers for durable goods, such as vehicles and electrical appliances. As those durable products often involve large investments, they are sensitive to the economic situation. The report helps assess the state of U.S. production activity and reflects the demand for big-ticket goods, which is dependent on both the forecasted state of consumer sentiment and the economy in general.
» April’s Michigan Consumer Sentiment Index and UoM 5-year Consumer Inflation Expectations – Friday, 04/25 – These reports portray the results of a monthly survey of consumer confidence levels and consumers’ views of long-term inflation in the United States. The level of confidence affects consumer spending, which comprises about 70% of the U.S. GDP. The inflation expectations index is used as a component of the Fed’s Index of Inflation Expectations calculations.
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