Market Turmoil Amid Escalating Trade Tensions: A Weekly Recap (April 7–11, 2025)
This past week, global financial markets experienced heightened volatility due to escalating trade tensions and economic uncertainties. Here's a breakdown of the key developments:
Stock Market: Rollercoaster Ride Amid Tariff Turmoil
The U.S. stock market witnessed significant fluctuations
Early Week Decline: The S&P 500 approached bear market territory, falling nearly 19% from its February highs by April 7.
Midweek Rebound: On April 9, the S&P 500 surged 9.52%—its largest one-day gain since 2008—following President Trump's announcement of a 90-day pause on new tariffs, excluding those on China.
End-of-Week Volatility: Despite the rebound, markets remained unstable, with the S&P 500 closing at 5,363.36 on April 11, up 1.8% for the week but still down nearly 9% year-to-date.
Bond Market: Yields Surge Amid Inflation Fears
Bond markets also faced turbulence:
Yield Spike: The 10-year Treasury yield rose sharply, reaching 4.5% by April 9—the largest three-day increase since 1982.
Mortgage Rates Climb: Consequently, mortgage rates increased, with the average 30-year fixed rate hitting 7.1%, adding pressure to the housing market.
Tariff Impacts: Global Trade Tensions Escalate
Trade policies significantly influenced market dynamics:
U.S. Tariffs: President Trump imposed a baseline 10% tariff on most imports, with a staggering 145% on Chinese goods.
Retaliation: China responded with 125% tariffs on U.S. products, while Canada and Mexico implemented up to 25% tariffs on select U.S. goods.
Global Impact: These measures disrupted supply chains and dampened investor confidence, leading to significant market sell-offs worldwide.
Consumer Sentiment: Confidence Plummets
The University of Michigan's Consumer Sentiment Index dropped to 50.8 in April, its lowest since the COVID-19 pandemic, reflecting growing concerns over inflation and job security amid the trade war.
Looking Ahead
As trade negotiations continue and markets seek stability, investors should brace for ongoing volatility. Monitoring policy developments and economic indicators will be crucial in navigating the uncertain landscape ahead.
