• U.S. stocks finished higher on Friday, capping a turbulent week, with the S&P 500 up 5.7%, the Dow up nearly 5%, and the Nasdaq up 7.3%.
• Friday’s gains were fueled by news of tech exemptions from tariffs. The U.S. Customs and Border Protection confirmed temporary exemptions for smartphones, computers, and semiconductors from tariffs. However, these exemptions may be rolled back.
• U.S. futures indicated slight gains, but remained relatively flat.
• Consumer sentiment fell dramatically in early April, and inflation expectations spiked.
• Major banks reported strong earnings, boosted by tariff-driven volatility. Upcoming earnings include M&T Bank, Citigroup, Bank of America, and others.
• Global equities rallied on Monday, driven by the U.S. tech tariff exemptions. European and Asian markets also saw gains.
• U.S. Treasury yields declined on Monday after a volatile week. There are concerns about potential foreign selling of Treasuries.
• Gold continued its climb, reaching record highs. Oil prices rose, supported by U.S. tariff exclusions and Chinese import data. Bitcoin steadied as risk appetite improved.
• Citigroup downgraded its U.S. equities outlook. BlackRock CEO Larry Fink and Bridgewater’s Ray Dalio warned about potential recession risks.

U.S. stocks finished higher on Friday, capping one of the most turbulent weeks in Wall Street history as markets digested rapid-fire tariff headlines from the Trump administration. Despite elevated volatility, all three major indices notched strong weekly gains: the S&P 500 climbed 5.7%, the Dow Jones Industrial Average rose nearly 5%, and the Nasdaq Composite jumped 7.3%.

Friday’s session saw broad gains, fueled late in the day by news that the White House will temporarily exempt electronics — including smartphones, computers, and semiconductors — from the sweeping “reciprocal” tariffs, even the baseline 10% rate. Tech stocks rallied on the exemption, and stock futures extended those gains into Monday’s premarket.

US Market Previous Day:

The S&P 500 rose 1.81% on Friday, the Dow gained 619 points (1.56%), and the Nasdaq added 2.06%. However, the broader picture remains challenging. Since the initial announcement of Trump’s tariff policy earlier this month, the S&P 500 is still down 5.4%, while the Nasdaq and Dow have dropped roughly 5% and 4.8%, respectively.

(Source: TradingView.com)

Last week was also one of the most volatile in recent memory. The CBOE Volatility Index (VIX), often referred to as Wall Street’s “fear gauge,” spiked above 50 on Thursday before easing back. The surge in volatility came amid a roller-coaster stretch that included Wednesday’s historic rally — the third-largest one-day percentage gain for the S&P 500 since World War II — following Trump’s announcement of a 90-day tariff pause for most U.S. trading partners

US Futures Remain Green:

• Dow Jones Industrial Average futures remained higher with gains of 1.12%
• S&P 500 futures showed gains of 1.60%
• Nasdaq Composite futures lead the pack with gains of 1.98%.

Tariff Update:

Late Friday, the U.S. Customs and Border Protection issued guidance confirming that smartphones, computers, and other key tech components will be temporarily exempted from President Donald Trump’s sweeping “reciprocal tariffs.” While the move sparked a brief rally in tech stocks, the White House signaled over the weekend that these exemptions could be partially or fully rolled back in the coming weeks, adding to uncertainty surrounding trade policy.

According to Politico, President Trump is actively negotiating with several trading partners, including Vietnam, India, South Korea, and Japan — countries seen as strategically important in the U.S. effort to counterbalance China. While the 90-day tariff pause applies to most nations, China remains excluded and now faces a 125% duty on exports to the U.S.

Key Economic Data/News:

Adding to the market’s mixed signals, consumer sentiment took a dramatic hit in early April. The University of Michigan’s preliminary reading fell to 50.8 — the lowest since June 2022 and the second lowest in the survey’s 70+ year history — missing expectations for 54.6.

More concerning, consumers’ inflation expectations for the next year spiked to 6.7%, up from 5% in March and the highest level since November 1981. The data underscores the strain of ongoing price pressures and the psychological impact of policy instability, despite recent easing in headline inflation readings.

Earnings Season/Company News:

Earnings season began with a strong showing from Wall Street’s major banks, boosted by tariff-driven volatility in equity markets:

• JPMorgan Chase (JPM): Reported a 48% YoY surge in equity trading revenue, beating analyst expectations. CEO Jamie Dimon warned that S&P 500 earnings estimates have already come down 5% and “will likely fall further.”
• Morgan Stanley (MS): Also exceeded forecasts with a 45% rise in equity trading revenue, benefitting from sharp swings in markets sparked by geopolitical and trade uncertainty.
• Goldman Sachs (GS): Posted $15.06B in Q1 revenue, a 6% increase YoY and above consensus estimates. EPS came in at $14.12, beating the expected $12.35. While equity trading posted record highs, CEO David Solomon cautioned that the bank enters Q2 facing a “markedly different” environment. Goldman shares are down over 13% year-to-date.

Earnings to Watch This Week

• Monday (Pre-market): M&T Bank
• Tuesday (Pre-market): Citigroup, Bank of America, PNC Financial, Johnson & Johnson
• Tuesday (After-hours): J.B. Hunt, United Airlines
• Wednesday (Pre-market): U.S. Bancorp, Citizens Financial, Prologis, Abbott Laboratories
• Wednesday (After-hours): Kinder Morgan, CSX Corp
• Thursday (Pre-market): Truist Financial, State Street, American Express, Fifth Third Bancorp, Regions Financial, UnitedHealth Group, Charles Schwab, Huntington Bancshares, D.R. Horton, Marsh & McLennan
• Thursday (After-hours): Netflix

Global Market Trends:

Global equities rallied on Monday, buoyed by the U.S. decision to exempt certain tech products from its sweeping reciprocal tariffs, which lifted risk sentiment and triggered a broad-based move higher. European stocks opened firmly in the green, with the pan-European Stoxx 600 index gaining 2.2% by mid-morning in London. Technology stocks led the charge, up 2.8%, while oil and gas names surged 3.7% despite ongoing concerns around softer crude demand forecasts for 2025. Financials also saw solid gains, with European banks rising nearly 3%.

In Asia-Pacific, markets closed higher across the board following President Donald Trump’s temporary reprieve on tariffs affecting smartphones and other consumer electronics. Hong Kong’s Hang Seng Index jumped 2.4%, led by a 2.34% climb in the Hang Seng Tech Index. Japan’s Nikkei 225 added 1.18%, and South Korea’s Kospi advanced 0.95%, while Australia’s S&P/ASX 200 gained 1.34%.

Notably, the divergence between U.S. and European equity performance has widened; while the S&P 500 is down nearly 11% year-to-date, the STOXX 600 has fallen just 4.4%, with Germany’s DAX even turning positive for the year.

Debt Market:

(Source: TradingView.com)

U.S. Treasury yields declined on Monday as investors assessed the implications of the latest tariff exemptions following a historically volatile stretch for bond markets. The benchmark 10-year yield dropped over 5 basis points to 4.44%, while the 2-year yield edged down 3.8 basis points to 3.916%. This pullback follows a dramatic surge in yields last week, during which the 10-year note posted one of its steepest two-day increases on record—rising more than 50 basis points.

Despite President Trump’s 90-day tariff reprieve, yields briefly climbed again on Friday before retreating Monday, reflecting lingering uncertainty and cautious repositioning. Traders are increasingly focused on potential foreign selling of Treasuries, particularly by large holders like Japan and China, amid speculation that U.S. trade and foreign policy shifts could trigger portfolio adjustments by overseas central banks and institutions.

Commodities and Other Assets:

As U.S. President Donald Trump ratcheted up his tariff war on the world, gold continued to climb, reaching a succession of record highs. The precious metal hit a fresh peak of $3,245.28 an ounce on April 11 and has surged 28% since bottoming at $2,536.71 on November 14 — shortly after Trump’s re-election. Investor concerns over the stability of the U.S. dollar as the global reserve currency and the reliability of U.S. Treasuries as a safe-haven asset have further boosted gold’s appeal amid growing geopolitical and economic uncertainty.

Oil prices rose on Monday, supported by U.S. tariff exclusions and Chinese data showing a strong rebound in crude imports for March. China’s crude oil imports jumped nearly 5% year-over-year, bolstered by increased flows from Iran and a recovery in Russian deliveries. However, gains were capped by concerns that the intensifying U.S.-China trade war could weigh on global growth and dampen fuel demand. Despite Monday’s uptick, both Brent and WTI have shed roughly $10 per barrel since the start of April. Analysts are dialing back expectations: Goldman Sachs now forecasts Brent to average $63 and WTI $59 for the rest of 2025, with Brent and WTI falling to $58 and $55, respectively, in 2026.

(Source: TradingView.com)

Bitcoin steadied on Monday as risk appetite improved slightly following the U.S. administration’s move to exempt certain Chinese imports from new tariffs. The crypto market has been highly volatile in recent weeks, rocked by the escalating trade conflict between the world’s two largest economies. Bitcoin had fallen as low as $74,000 but rebounded sharply after Trump signaled a willingness to backtrack on some of his tariff threats. Nonetheless, sentiment remains fragile, with traders cautious about the potential for further retaliatory moves from Beijing.

Market Sentiment:

Citigroup downgraded its outlook on U.S. equities and cut its S&P 500 year-end target, citing mounting tariff uncertainty and its likely toll on corporate earnings. The bank now expects the index to end the year at 5,800 — down from its prior estimate of 6,500 — and reduced its EPS projection for the S&P 500 to $255 from $270. Citi joins a growing list of brokerages, including Goldman Sachs and Bank of America, that have slashed their forecasts below the 6,000 level.

Meanwhile, BlackRock CEO Larry Fink warned Friday that the U.S. economy is “very close, if not in, a recession,” though he noted this is not a financial crisis and emphasized his belief in the long-term resilience driven by megatrends like artificial intelligence. On Sunday, Bridgewater’s Ray Dalio echoed Fink’s concern, saying the U.S. is “very close to a recession,” and cautioned that mishandling the current environment could lead to a situation “worse than a recession.”