Stocks fell sharply in response to the Trump administration’s announcement of a broad range of harsher-than-expected tariffs, which fueled concerns around the potential for slowing economic growth, resurgent inflation, and a possible recession. Small-cap stocks lagged as the Russell 2000 Index lost about 10% and ended the week down over 30% from its all-time high, while the S&P 500 Index posted its worst weekly performance in over five years. The tariff announcement led to the largest one-day decline for some indexes since 2020 on Thursday, and stocks continued to slide through Friday. Several countries, including China, began to announce retaliatory tariffs and plans for negotiations with the U.S., adding to trade war fears and broader uncertainty around global trade policy. Expectations for the number of Federal Reserve interest rate cuts in 2025 jumped following the announcement, as investors wagered that negative growth effects from the new policies will force the Fed to ease monetary policy to support the labor market and spur economic growth. U.S. Treasuries generated positive returns during the week, benefiting from the risk-off sentiment surrounding the Trump administration’s newly announced tariffs. The STOXX Europe 600 Index ended 8.44% lower, the biggest drop in five years. Gold ended the week lower. Crude prices collapsed this week, plunging from five-week highs to four-year lows. Bitcoin ended the week unchanged.
Have a great week-end
Charles for the team