Weekly Market Insights | Markets React to White House Tariffs

Stocks fell broadly last week as domestic and foreign markets reacted to the White House’s tariffs.

The Standard & Poor’s 500 Index declined 9.08 percent, while the Nasdaq Composite Index fell 10.02 percent. The Dow Jones Industrial Average dropped 7.86 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, lost 7.39 percent.^1,2

Under Pressure
Stocks rallied the first half of the week as markets tried to anticipate the potential impact of tariffs previously announced by the White House.³

Soon after the closing bell on Wednesday, President Trump’s new tariffs surprised markets. Global markets reacted to the news overnight.⁴

Markets opened lower on Thursday, and the selling continued through Friday. Treasuries rallied in a flight to quality as investors moved to the sidelines. The yield on the 10-year Treasury note closed Friday at 4.0 percent. Bond yields generally fall when bond prices rise.^5,6

Powell’s Speech

Federal Reserve Chair Jerome Powell gave a previously scheduled and much-anticipated speech on Friday. He explained:

The labor market is in good shape and not a significant source of inflation.
Longer-term inflation expectations are “well anchored and consistent with our 2 percent inflation goal” – despite higher expectations for inflation over the short term.
Regarding consumer sentiment, while consumers “may not feel great about the economy now, they still keep spending.” He added that the same happened during the pandemic.
The Fed’s policy stance is “well positioned to wait for greater clarity… (on the likely effects of trade and fiscal policy, for example) before considering any changes in monetary policy.”⁷

Footnotes and Sources

^{The Wall Street Journal, April 4, 2025}
^{Investing.com, April 4, 2025}
^{MarketWatch.com, April 1, 2025}
^{The Wall Street Journal, April 2, 2025}
^{MarketWatch.com, April 3, 2025}
^{The Wall Street Journal, April 4, 2025}
^{MarketWatch.com, April 4, 2025}