In the last two weeks, inflation continued to ease and job growth remained solid, even as the unemployment rate ticked up—highlighting a mixed but resilient economic backdrop. Meanwhile, the Trump administration’s flurry of trade actions, tariff shifts, and global dealmaking efforts caused historic volatility in the markets. Let’s dive in!
- U.S. AI Investment: Nvidia announced plans to produce AI supercomputers domestically for the first time, signaling a strategic supply chain shift amid evolving tariff policies. The move aims to meet rising AI demand while enhancing resilience and reducing reliance on overseas manufacturing.
- 90 Deals in 90 Days: The Trump administration aims to secure 90 trade deals in 90 days following a temporary tariff pause, but limited staffing and market volatility are creating headwinds. Experts suggest the pace may be unrealistic, with priorities likely to shift toward a smaller group of key partners.
- Inflation Cools Further: Consumer price inflation slowed more than expected in March, with the annual rate falling to 2.4%, its lowest level since early 2021. While this eases pressure on the Federal Reserve, upcoming tariffs may complicate future inflation trends and rate decisions.
- Market Volatility Response: President Trump acknowledged the recent stock market downturn but framed it as necessary short-term pain to address long-term trade imbalances, particularly with China. Despite mounting losses, he reaffirmed his commitment to the tariff plan, signaling continued market uncertainty ahead.
- Auto Tariff Reversals: President Trump hinted at temporary exemptions for auto tariffs to give carmakers time to shift supply chains, adding to a growing list of adjustments and delays. Markets responded with modest gains, but economists warn the continued policy shifts are creating lasting uncertainty for businesses and investors.
- Tech Tariff Reprieve: The White House has exempted smartphones, computers, and other key electronics from President Trump’s reciprocal tariffs, easing pressure on major tech firms like Apple. The move follows market turmoil and aims to give companies time to shift production to the U.S., helping stabilize investor sentiment.
- TikTok Deadline Extended: President Trump granted ByteDance another 75 days to finalize a sale of TikTok’s U.S. operations, pushing the deadline to mid-June. While multiple bidders are in talks, any deal still requires approval from both U.S. and Chinese authorities, with national security and trade policy deeply intertwined in the negotiations.
- Labor Market Steady: U.S. payrolls rose by 228,000 in March, surpassing expectations and signaling continued labor market strength despite rising trade tensions. However, unemployment edged up to 4.2%, and wage growth slowed, adding to concerns over the potential impact of new tariffs on future hiring.
- Meta Monopoly Trial: Mark Zuckerberg testified in a landmark FTC antitrust case over Meta’s acquisitions of Instagram and WhatsApp, facing scrutiny on whether the deals aimed to neutralize competition. The trial could lead to a breakup of Meta’s business empire, with significant implications for its advertising model and market dominance.
Over the next two weeks, markets will closely monitor the release of the Q1 GDP estimate and PCE inflation data, both key indicators for assessing economic momentum and potential Fed policy moves. Globally, geopolitical attention will remain on ongoing Middle East tensions and U.S. trade diplomacy, while earnings season continues to influence equity market sentiment. We hope you had a great holiday weekend!
Footnotes:
SFM Market Commentary: 4/18/25
In the last two weeks, inflation continued to ease and job growth remained solid, even as the unemployment rate ticked up—highlighting a mixed but resilient economic backdrop. Meanwhile, the Trump administration’s flurry of trade actions, tariff shifts, and global dealmaking efforts caused historic volatility in the markets. Let’s dive in!
Over the next two weeks, markets will closely monitor the release of the Q1 GDP estimate and PCE inflation data, both key indicators for assessing economic momentum and potential Fed policy moves. Globally, geopolitical attention will remain on ongoing Middle East tensions and U.S. trade diplomacy, while earnings season continues to influence equity market sentiment. We hope you had a great holiday weekend!
Footnotes: