Week of April 14, 2025

MARKET MOVEMENTS

Tariffs Paused, Buy Everything!

Last week, President Trump announced a 90-day pause on reciprocal tariffs, except for China, which saw its tariffs raised to 125%. This led to significant market reactions. The DOW surged 2,600 points, and the S&P 500 gained 200 points. Meanwhile, the yield on the US 10-year note fell to 4.40%, down from nearly 4.60% on Friday.

Bonds Shrug off Cooler Inflation Reports

Last week, interest rates rose despite weaker inflation readings from the CPI and PPI reports. U.S. bond funds saw heavy outflows, with investors pulling out $15.64 billion. The March PPI dropped by -0.4%, the largest monthly decline since April 2020, which may affect core-PCE estimates. Investors likely ignored these reports since they covered March inflation and didn't reflect the revised outlook after the tariff announcements.

Calm Start to the Week

Markets are calmer at the start of the holiday-shortened trading week. The Dow Jones is up over 200 points, and the 10-year yield has dropped to 4.40%. With a quieter economic data calendar, tariff headlines will likely dominate. Fed Chairman Jerome Powell speaks on Wednesday at the Economic Club of Chicago. Markets will quiet down Thursday afternoon and close on Friday for the holiday.

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