Major US stock indexes finished the holiday-shortened week mixed. Smaller-cap indexes outperformed, with the Russell 2000 Index posting gains, while the Dow Jones, S&P 500 and Nasdaq Composite indexes all closed the week lower. The Tech sector was a notable decliner during the week, due in part to news that the U.S. government would add new restrictions on exports of chips to China in a further escalation of the ongoing trade war between the world’s two largest economies. Hawkish comments from Fed Chair Jerome Powell appeared to add to the negative sentiment in the latter half of the week. On the macro side, US consumer spending rose 1.4% yoy in March, the highest monthly increase in over two years, as consumers rushed to buy cars ahead of the Trump administration’s 25% tariff on automobiles. Treasury yields were all lower on the week with the belly outperforming (and the long-end the laggard). The hawkish comments from Fed Chair Powell on Wednesday triggered some risk-off market sentiment that helped drive gains in the Treasury market. In Europe, the ECB cut its key deposit rate by another 25 basis points to 2.25%, as expected, and signaled more easing. The STOXX Europe 600 Index ended 3.93% higher. The dollar tumbled for the 3rd straight week, to its lowest since the first week of October. The dollar Index is down over 3.6% since Liberation Day. Meanwhile, crude oil prices rallied and gold ripped higher on the week to new record highs. Bitcoin managed gains for a second straight week.
Have a great week-end
Charles for the team