Weekly Market Update for March 28, 2025
by Jared Plotz, Director of Research
It was another week of sideways action for major markets. Stock indices did move upwards early in the week on hopes for narrower tariff actions as well as some better economic data. But indices were dragged lower as optimism faded amidst softer confidence readings and tougher tariff rhetoric. The S&P 500 declined -1.5% this week, while the Nasdaq fell -2.6%. The 10-Year Treasury yield, an interest rate indicator, closed the week unchanged at 4.25%, as was the 6-Month US Treasury, a favorite of our US Treasury strategy, which ended the week at 4.22%.
“Hard” economic data remained resilient this week. Final Q4 GDP was revised up to 2.4%, from 2.3% prior. Pending home sales, March’s PMI Composite, durable goods orders, and unemployment claims were all better than expected. “Soft” economic data continues to drift lower. March consumer confidence and consumer sentiment both weakened further. Also, PCE inflation was slightly hot. This dynamic speaks to the continued strength of the economy, but also building worries due to tariffs and other policy unknowns.
The Trump administration is slated to announce additional tariffs on trading partners next week. The degree they do so remains in the air, and this uncertainty is a daily pressing item for markets. It seems likely that policy is tightening on autos, lumber, semiconductor chips, aluminum, and pharmaceuticals. An additional 25% tariff is already set for all automobiles produced outside the US. The rate will initially begin at 2.5% but ramp to 25% over time. This is a major blow to Asian automakers, while Mexico is trying to get some preferential treatment. “Reciprocal” tariffs on other major trading partners, including the EU and Japan, will be clarified next week.
Next week brings job openings (JOLTS) data for February on Tuesday, as well as the ISM manufacturing reading. Then on Friday, we will get the March employment report. Expectations are for 125,000 jobs to have been added last month, with the unemployment rate ticking up to 4.2%.
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