WEEK IN PERSPECTIVE: Rally then retreat amid tariffs fear, inflation worries

This week, U.S. equity markets faced significant volatility, culminating in notable losses across major indices. The S&P 500, which closed above its 200-day moving average early in the week, declined by 1.5%, the Dow Jones Industrial Average by 1%, and the Nasdaq Composite by 2.6%.

A convergence of rising inflation, declining consumer confidence, and trade policy uncertainties amplified market volatility.

The Consumer Confidence Index showed a fourth consecutive decline, and the Expectations Index fell to its lowest level (65.2) in 12 years, with worries about future employment prospects and inflation pacing that downturn. Inflation data this week corroborated the worries after February's core Personal Consumption Expenditures (PCE) price index, the Fed's preferred inflation read, rose by 0.4%, bringing the annual rate to 2.8%.

Also, the final March University of Michigan Index of Consumer Sentiment was marked down to 57.0 from the preliminary reading of 57.9. There was a large month-over-month drop in the Expectations Index, with consumers across all demographics and political affiliations expressing concerns about personal finances, business conditions, unemployment, and inflation.

Ongoing concerns about US trade policy also played a big role this week. President Trump announced a 25% tariff on all imported passenger vehicles starting April 3. He also said reciprocal tariffs will go on for all countries, but that the U.S. will be very lenient. 

Tech stocks led the retreat, but many names participated in this week's slide. The equal-weighted S&P 500 fell 1.2% while NVIDIA (NVDA), Microsoft (MSFT), and Amazon.com (AMZN) dropped 6.8%, 3.2%, and 1.8%, respectively. 

Four S&P 500 sectors registered gains while the remaining seven sectors logged declines ranging from 0.2% (financials) to 3.7% (technology). The risk-off bias this week led the consumer staples sector to log a 1.7% gain.

Copyright © 2024 Briefing.com.

Quantum Private Wealth LLC. is an investment adviser located in Tampa, Florida. Quantum Private Wealth LLC. is registered with the Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Quantum Private Wealth LLC. only transacts business in states in which it is properly registered or is excluded or exempted from registration. A copy of Quantum Private Wealth's current written disclosure brochure filed with the SEC which discusses among other things, our business practices, services, and fees, is available through the SEC’s website at: www.adviserinfo.sec.gov.

Please note, the information provided in this document is for informational purposes only and investors should determine for themselves whether a particular service or product is suitable for their investment needs. Please refer to the disclosure and offering documents for further information concerning specific products or services.