Client Login

Last Week on Wall Street – April 5th, 2025

  S&P 500: -9.19%      DOW:  -7.83%       NASDAQ:  -9.99%      10-YR Yield: 4.01%

What Happened?

Markets kicked off April with a sharp and unsettling pullback, officially entering bear market territory after one of the steepest weekly selloffs in recent years. Volatility surged as investors reacted to sweeping new tariff proposals from the Trump administration, measures that, for the first time, would apply blanket tariffs across all global trade partners, including countries not previously targeted. Additional levies aimed at major players like China and the EU further signaled a dramatic shift toward protectionism, catching global markets off guard.

The prospect of a full-scale trade reset sent shockwaves through equities. Investors began pricing in a future marked by elevated inflation and tighter margins, as rising input costs threaten to squeeze U.S. companies and drive consumer prices higher. Manufacturing, industrials, and consumer discretionary sectors bore the brunt of the selloff.

In response, pressure is mounting on Fed Chair Jerome Powell to cut interest rates to cushion the potential drag on economic growth. So far, Powell is staying the course, emphasizing a data-dependent approach. The labor market continues to show strength, with steady job gains and low unemployment offering the Fed some flexibility, for now.

In the articles below, we’ll take a deeper look at “Liberation Day” and the political stance of the Trump administration, examine the paradoxes within the labor market, and explore how the Fed is navigating rising inflation risks and escalating trade tensions.

Trump Tariff Chart: Full List of Countries Hit With ‘Reciprocal’ Tariffs

  • 10% blanket tariff on every county taking effect April 5th.
  • 34% additional tariff on Chinese imports.
  • 20% additional tariff on the European Union.
  • 25% tariff on “all foreign made automobiles” taking effect April 3rd.

The key takeaway – Markets were caught off guard by what former President Donald Trump dubbed “Liberation Day”—a sweeping and aggressive trade policy announcement aimed at reshaping America’s global trade position. Trump’s plan calls for a dramatic expansion of tariffs on nearly all imports into the United States, regardless of origin, rattling investors and reigniting fears of a global trade war.

The core of the proposal? A “mirror tariff” regime where U.S. import duties would match or exceed the tariffs imposed by foreign countries on American goods. The policy isn’t just targeting historic trade rivals like China—it would apply across the board, including key allies and low-tariff trading partners. Even nations with relatively low barriers to U.S. goods but high export volume, such as Brazil and Australia, would face steep new costs under the proposed framework. The clear message: if you want access to the U.S. consumer, you’ll have to pay for it.

The rationale behind the move is in line with Trump’s long-standing “America First” ethos. His stated goal is to reindustrialize the U.S. by making imported goods more expensive, thereby incentivizing domestic production and supply chain reshoring. Analysts argue the plan risks higher inflation, consumer pain, and retaliatory tariffs that could damage American exporters. Supporters say it’s a bold strategy to rebalance decades of trade deficits and revive American manufacturing.

While details remain fluid, the prospect of a more insular U.S. trade regime has global investors reassessing exposure to export-driven economies and multinational companies with significant U.S. revenue. Currency volatility surged and equity markets dipped following the announcement, as traders grappled with the potential fallout of a dramatic reshuffling of global trade flows.

US Hiring Picks Up, Showcasing Solid Job Market Ahead of Tariffs

  • U.S. nonfarm payrolls increase to 228,000 over the 140,000 expectations.
  • Unemployment rose from 4.2% to 4.3%.
  • U.S. hourly wages remained the same at 3.0%

The key takeaway – Towards the end of last week investors got a healthy dose of encouraging economic news, but you’d hardly know it by looking at the market reaction. The U.S. labor market surprised to the upside, with a dramatic surge in employment that blew past expectations. Job creation came in strong, typically the kind of headline that signals economic strength and sparks investor optimism. Under normal circumstances, this would’ve been front-page fuel for a rally. But last week wasn’t normal.


The upbeat jobs report was shrouded by the release of President Trump’s proposed global tariff framework, which rattled markets and triggered a broad risk-off move. The result? Even with labor strength in the spotlight, equities took a hit as investors braced for renewed trade uncertainty and the potential for inflationary ripple effects.


Underneath the headlines, the labor market story remains a resilient one — albeit with a twist. While total employment increased sharply, the unemployment rate ticked up as well. This seeming contradiction boils down to data classification: the unemployment rate is derived from a separate household survey, and much of the increase stemmed from a rise in labor force participation and adjustments in reporting, rather than a true deterioration in job prospects.
In short: more people are entering or re-entering the workforce, a sign of economic confidence, even as the system catches up with accounting for them.

Analyst find this significant because a strengthening labor market typically spells good news for the economy, more jobs mean more spending power, more growth, and more cushion against shocks. But against the backdrop of rising protectionist rhetoric, markets are torn between positive domestic signals and global policy headwinds.


As we’ve seen before, the market can be right for the wrong reasons, or wrong for the right ones. For now, a strong labor report is playing second fiddle to geopolitics.

Powell Warns of Higher Prices, Weaker Growth After Tariff Plan

  • Fed Chair Jerome Powell stands strong and holds rates steady amidst the Trump Administration’s tariff plan.
  • The Fed stands on a fine line between stoking inflation and boosting economic growth.

The key takeaway – Federal Reserve Chair Jerome Powell finds himself navigating treacherous economic waters as President Trump’s expansive tariff plans send ripples through global markets. The central bank faces a dual challenge: managing potential inflationary pressures from increased tariff costs while supporting economic growth that could be hampered by escalating trade tensions.

In a recent address, Powell expressed caution regarding the Fed’s capacity to counteract the economic slowdown induced by tariffs. He emphasized that while the Fed can adjust monetary policy to influence demand, its tools are less effective against supply-side shocks, such as sudden increases in import prices due to tariffs. This limitation underscores the complexity of the current economic landscape, where policy decisions must carefully weigh the risks of stoking inflation against the need to sustain growth.

Market reactions have been swift and volatile. The announcement of tariffs led to significant sell-offs, with major indices experiencing sharp declines. Investors are recalibrating their expectations, anticipating that the Fed may need to adjust interest rates to mitigate the economic impact of ongoing trade disputes. However, the central bank’s ability to maneuver is constrained by the delicate balance between curbing inflation and fostering economic expansion. This reflects the Fed’s cautious stance on challenges of addressing supply-side shocks with demand-focused tools. As tariffs threaten to elevate consumer prices and dampen business investment, the central bank’s role becomes increasingly complex.  

From Around the Watercooler