In the final full week of the first quarter, global markets experienced significant volatility, driven by President Trump's upcoming tariff announcements and concerns over the US economy. The S&P 500 (^GSPC) declined nearly 3%, while the Dow Jones Industrial Average (^DJI) fell approximately 2%. The tech-heavy Nasdaq Composite (^IXIC) suffered the most, dropping close to 4%. With the focus shifting between tariffs and labor market data, investors brace for a potentially tumultuous period ahead.
As the first week of April approaches, all eyes are on President Trump's anticipated "Liberation Day" announcement, where reciprocal tariffs are expected to be unveiled. Market analysts from Goldman Sachs predict that the initial proposed tariff rates could be higher than anticipated, possibly double the rate expected by investors. This uncertainty has already affected consumer sentiment, with inflation expectations rising sharply in March. Recent economic data indicates slowing growth and sticky inflation, further unsettling the market.
The upcoming week will also see critical updates on the labor market, including the release of the March jobs report. Economists anticipate a modest slowdown in job creation, with an estimated addition of 135,000 jobs compared to February’s 151,000. While the unemployment rate is expected to remain stable at 4.1%, any deviation from forecasts could amplify fears of a sharper economic deceleration. Additionally, earnings guidance from companies suggests a growing number are warning of potential underperformance due to tariff-related challenges.
Beyond the economic indicators, specific days within the week hold their own significance. Monday brings regional manufacturing data, followed by job openings and manufacturing indices on Tuesday. Wednesday features private payroll data and durable goods orders, while Thursday provides insights into jobless claims and service sector performance. Finally, Friday culminates with the highly anticipated nonfarm payrolls report, offering a comprehensive snapshot of the labor market's health.
With tariffs looming and economic data indicating potential headwinds, the coming weeks present both risks and opportunities for investors. Analysts stress the importance of recalibrating expectations amidst these uncertainties. As the earnings season begins in mid-April, corporate responses to tariff pressures will be closely monitored, influencing market dynamics significantly. Investors must navigate this complex landscape carefully, balancing optimism with caution as new information unfolds.