- Tariff tensions and Fed uncertainty stirred market volatility, with tech stocks under pressure and Fed Chair Powell signaling a cautious, wait-and-see approach amid political scrutiny.
- Retail sales beat expectations, but optimism was muted as investors questioned whether the gains reflected true strength or pre-tariff stockpiling.
- Global markets remained resilient, with international equities and small caps leading, emphasizing the importance of disciplined investing and diversification in uncertain times.
Last Week in the Markets
Last week, the markets were shortened due to the Good Friday holiday, but the news flow was anything but quiet. Despite persistent uncertainties, particularly surrounding tariffs and Federal Reserve policy, global markets still managed to post generally positive results—an encouraging sign that resilience remains a core market characteristic.
Tariffs and Tech: A Tug-of-War
Tariff uncertainty once again dominated the headlines. The latest developments had a noticeable impact on the large-cap growth and technology sectors, with Nvidia facing pressure following news that its business could be directly affected by new tariff implementations. While these headline-grabbing stories generate plenty of short-term concern, it is worth remembering that market leadership tends to shift in such environments—and diversification helps mitigate the pain.
On the economic front, Retail Sales came in stronger than expected—a significant positive surprise. However, markets were hesitant to cheer, as some investors interpreted the strength because of pre-tariff stockpiling, potentially clouding the longer-term trend.
The Fed and the Fight for Independence
Federal Reserve Chair Jerome Powell was at the center of attention again last week. His comments echoed the consensus view that tariffs could lead to lower growth and higher inflation. But more striking was his assertion that the Fed still needs clarity on how the tariff picture will evolve before taking further action—triggering sharp market reactions and dramatic headlines.
In response, President Trump criticized Powell for not having already lowered rates, even suggesting the possibility of removing him from his post—a move that would undoubtedly call into question the Fed’s independence. Despite the theatrics, current market expectations still lean toward rate cuts this year, though more hawkish voices are beginning to emerge.
Market Performance Snapshot
Despite the drama, global equities posted a positive week, led by international stocks. U.S. small caps also had a stronger showing. Interest rates declined, lifting the Bloomberg Aggregate Bond Index slightly. For the year-to-date period, EAFE (developed international markets) remains the leader, followed by commodities, while broad U.S. equity benchmarks remain in negative territory—highlighting the benefits of diversified global exposure.
Looking Ahead: Earnings and Economic Data on Deck
This week will be pivotal. Tariff developments continue to drive market direction, but corporate earnings will also take center stage. Roughly 20% of companies in the S&P 500 report this week, including heavyweights like Alphabet and Tesla. With only 12% of companies having reported so far, early results are underwhelming, as fewer firms are beating expectations compared to typical quarters.
On the economic calendar, keep an eye on manufacturing surveys, housing data, and consumer sentiment—all potential catalysts for market movements.
What Should Investors Do Amid the Whirlwind?
In times like these, when headlines are loud and uncertainty is high, investors often ask: What now? The answer begins with understanding that every investor’s journey is unique. Retirees, those approaching retirement, and younger investors each have different objectives and risk profiles. Still, the core principles of sound investing remain the same—especially in volatile environments.
First, embrace uncertainty. No one can predict the future with certainty. Acknowledging “I don’t know” is not a weakness; it is a strength. It helps prevent emotional, reactive decisions that can derail long-term plans.
Second, trust the process over instinct. Well-constructed portfolios, grounded in diversification, strategic rebalancing, and long-term discipline, are built to weather periods just like this. These systems offer structure and stability when emotions might otherwise take the wheel.
Above all: Stay invested, stay diversified, and stay disciplined. In a world that is always shifting, calm and consistent action—guided by a thoughtful plan—is the foundation of long-term success.
if you have any questions, please don’t hesitate to reach out to us at strategists@brinkercapital.com or at rusty@orion.com. Thank you for your time and trust.