What happened last week…
On Wednesday, President Donald Trump announced a 90-day pause on reciprocal tariffs, lowering it to a baseline of 10% on imports, for some countries after reportedly more than 75 countries have contacted U.S. officials to negotiate a deal. Trump also announced that the tariff on China will increase to 125% in what Trump said was “the lack of respect that China has shown to the World’s Markets.” The White House later clarified that the tariff on China will be 145%.
Earlier that day a 104% tariff went into effect on China. In response, China levied an 84% tariff on imports from the United States, then later increased that tariff to 125%. Prior to the tariff pause, reciprocal tariffs went into effect across the globe, which resulted in retaliatory tariffs by the impacted countries. The European Union approved a 25% tariff on U.S. imports starting April 15, with a second set of tariffs set to begin on May 15. However, after Trump’s tariff pause announcement, the European Union said it will pause its retaliatory tariffs for 90 days. Also, Trump said he would soon announce a “major tariff on pharmaceuticals,” which was previously spared from tariffs.
After the tariff pause announcement, the three major indices finished the Wednesday session with historic performances: DJIA (7.87%), S&P 500 (9.52%), NASDAQ (12.16%). The three major indices landed in the green for the week with performances as follows: DJIA (4.95%), S&P 500 (5.70%), NASDAQ (7.29%).
JPMorgan Chase (JPM) CEO Jamie Dimon said the tariff policy of the United States could result in higher prices of goods. In his annual shareholder letter, Dimon said, “We are likely to see inflationary outcomes, not only on imported goods but on domestic prices, as input costs rise and demand increases on domestic products.” Dimon continued, “Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth.”
The inflation rate year-over-year for March landed below expectations (2.6%) as it decreased to 2.4% from 2.8%. It is the lowest since September 2024 (2.4%). The rate peaked at 9.1% in June 2022. Meanwhile, the core inflation rate year-over-year for March also landed below expectations (3.0%) as it decreased to 2.8% from 3.1%. It was the lowest reading since March 2021 (1.6%).
Happening this week…
Q1 earnings season continues this week.
The stock market will be closed on Friday in observation of Good Friday.
Thanks for reading!
- The Rockline Team
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