Markets Rally, But the Clock’s Ticking
Stocks bounced hard to start the week, with big help from the “Magnificent Seven” mega-cap tech names and signs that President Trump’s upcoming tariffs might be narrower than feared. His comment that he “may give a lot of countries breaks” gave bulls just enough hope to rush back into risk.
The S&P 500 gapped up on Monday, closing back above its 200-day moving average and found support at that level on Tuesday, with a fresh MACD crossover.
Still, Tuesday’s late-day pullback was a reminder that this rally is resting on shaky ground.
U.S. consumer confidence sank to a four-year low in March — not exactly the kind of stat that screams “recovery.” With a 92.9 reading, we’re only a few points away from the mid-COVID era, when Consumer Confidence was down in the low 80s.
At the same time, fears are rising that recent tariff moves (25% on Canadian and Mexican goods, and a doubled rate on Chinese imports) could hit corporate earnings and drag down economic growth.
The Economic Dashboard This Week
It’s a big week for data, and Monday kicked things off with a mixed read: Services PMI stayed above 50, pointing to growth, while manufacturing dipped just below, at 49.8. That’s the line between expansion and contraction — and we’re hovering right on it.
Here’s what’s still ahead:
- Wednesday: Durable goods orders (expected to decline)
- Thursday: Q4 GDP revision and jobless claims
Friday: Personal income & spending, plus the Fed’s favorite inflation metric — core PCE
If those numbers show strength, markets could build on this rally. If not? That April 2 tariff drop could hit a market already on edge.
What’s Priced In? Not Much.
The market’s currently assigning just a 16% chance of a rate cut at the May FOMC meeting. That tells you investors aren’t expecting the Fed to rescue them — not yet. But the longer uncertainty hangs around (on trade, inflation, and political reshuffling), the more volatility becomes the baseline.
Is the Bull Market Over?
Not necessarily. But this is what a correction looks like: elevated valuations getting knocked down a peg by policy chaos and shaken confidence. It doesn’t mean the longer-term trend is broken — especially with employment still strong and potential tailwinds from tax-cut extensions and deregulation later in the year.
Compare the unemployment claims in 2025…
The unemployment claims just prior to the Great Recession…
In 2007, we had 300-350K unemployment claims per week before breaking out of that range in 2008. Our current 220K unemployment claims per week pale in comparison.
Still, don’t mistake this bounce for a bottom. Until we get clarity on trade policy — and until consumer sentiment rebounds — it’s smart to assume the market will stay choppy.
What to Watch Now
Mark your calendar for April 2. That’s when the reciprocal tariffs go live, and we’ll find out just how aggressive this trade policy really is. If the new rules are focused and targeted, the market could breathe easy. If not? We could be staring down another leg lower.
Either way, this isn’t the time to get overly aggressive — or overly defensive. Stay in the game, stay hedged, and keep your eyes on the data.
