Closing Recap 

U.S. markets experienced a brutal sell-off last week, closing near lows as escalating trade tensions and cautious Fed commentary triggered the worst weekly performance since the COVID-19 pandemic onset in March 2020. Major indices saw significant declines, marking the seventh losing week in the last eight. 

Looking Ahead 

The week ahead is poised to be crucial as markets attempt to navigate the fallout from the recent trade-driven sell-off while digesting key economic indicators and central bank insights. Attention will be squarely focused on the US Consumer Price Index (CPI) release on Thursday, which will provide a critical reading on March inflation pressures before the full impact of the latest tariff escalations is felt, significantly influencing expectations for the Federal Reserve’s policy path. Alongside inflation data, the release of the FOMC Minutes from the March meeting on Wednesday will offer valuable context on the Fed’s internal discussions regarding the economic outlook and balance sheet policy prior to the heightened trade tensions. 

Furthermore, the commencement of the Q1 earnings season on Friday, starting with major banks, shifts focus to corporate health and forward guidance, which will be paramount given the increased economic uncertainty. International developments, including UK GDP data on Friday, will also be monitored, all under the shadow of the ongoing trade conflict which promises continued potential for market volatility as investors process this dense flow of information.

Key Takeaways Historic 

• Sell-Off: Major US indices suffered steep weekly losses: S&P 500 (-9.08%), Dow Jones (-7.86%), Nasdaq (-10.00%), Russell 2000 (-9.70%). 
• Trade War Escalation: China’s decision to match U.S. tariffs intensified the trade conflict, acting as the primary catalyst for the market plunge. China announced extra 34% tariffs, added US companies to an unreliable list, imposed rare metal export controls, and suspended some US chicken imports. 
• Extreme Volatility: Markets saw brief, sharp bounces on unconfirmed rumors (Treasury Secretary Bessent urging moderation) and specific news (Trump’s tweet on potential Vietnam tariff cuts benefiting consumer stocks like NKE, DECK), but these rallies were short-lived. 
• Bear Market Territory: The Nasdaq Composite fell over 22% from its recent highs, entering defined bear market territory, while the Russell 2000 was down 27% from its peak. 
• Flight to Safety: Investors fled equities for the relative safety of bonds, pushing Treasury yields lower. The 10-Year Treasury yield dipped below 4%.
• Week Ahead Focus – Inflation: All eyes turn to crucial US CPI data (Thu) to gauge March inflation pressures before the latest tariff impacts. 
• Week Ahead Focus – Fed Insights: The FOMC Minutes (Wed) will be parsed for details on the Fed’s thinking prior to the tariff escalation and their views on slowing balance sheet runoff.

Market Overview 

The past week witnessed a dramatic downturn in U.S. equity markets, culminating in the sharpest sell-off since the early days of the pandemic. The catalyst was a significant escalation in the U.S.-China trade war. Following new U.S. tariff announcements, China swiftly retaliated with an additional 34% tariff on U.S. goods effective April 10th, added 11 U.S. companies to its “unreliable list,” imposed export controls on key rare earth metals, suspended certain U.S. chicken imports, and initiated an anti-monopoly probe into DuPont China. 

Index	Up/Down	%	Last
DJ Industrials	-2,231.07	5.50%	38,314
S&P 500	-322.44	5.97%	5,074
Nasdaq	-962.82	5.82%	15,587
Russell 2000	-83.51	4.37%	1,827

The magnitude of the decline was severe. The Nasdaq’s drop pushed it firmly into bear market territory (down >20% from highs), while the small-cap Russell 2000 suffered an even steeper decline (-27% from highs). The Energy sector within the S&P 500 was particularly hard-hit, plummeting 14% over just two days. The intense risk aversion sent investors rushing into government bonds, causing yields to fall significantly, which subsequently impacts borrowing costs like mortgage rates.

Looking ahead, the market seeks clarity amidst the wreckage. The intense focus now shifts to upcoming economic data releases, particularly the US Consumer Price Index (CPI) for March (Thursday). While this data predates the latest round of tariffs, it will provide a vital baseline reading on underlying inflation pressures and heavily influence the ongoing debate about the Fed’s policy path. Is inflation proving sticky even before new trade frictions, or is there underlying softness? The answer will be critical. 

Complementing the CPI data, the FOMC Minutes from the March meeting (Wednesday) will offer a retrospective look into the Fed’s deliberations before the trade situation deteriorated further. Investors will scrutinize the text for nuances regarding the conditions necessary for policy easing, the rationale behind slowing the pace of balance sheet reduction, and the degree of consensus (or division) among policymakers regarding the economic outlook and rate projections.

Economic Data Calendar (Week of April 7th – 11th)

After a tumultuous week dominated by trade war headlines and Fed speak, the market will turn its attention to key inflation data and the details behind the last Fed meeting. The ongoing tariff situation and its potential economic fallout will continue to loom large.

• MON: N/A (No major US/UK data listed) 
• TUE: N/A (No major US/UK data listed) 
• WED: FOMC Minutes (March Meeting) 
• THU: US CPI (Mar) 
• FRI: UK GDP (Feb), US PPI (Mar), US UoM Prelim Consumer Sentiment (Apr), US Earnings Season Begins (Q1 25)

Commodities, Currencies, and Treasuries 

Commodity markets faced significant pressure last week, reflecting growth concerns stemming from the trade war escalation. Both WTI and Brent crude oil prices registered notable declines. Gold prices also fell substantially, possibly caught in broader market liquidation rather than acting purely as a safe haven. In currency markets, the Euro saw minimal change against the US Dollar, while the Dollar strengthened against the Japanese Yen, a move somewhat counterintuitive to typical risk-off dynamics. The most significant move occurred in the bond market, where investors flocked to safety, causing a sharp drop in Treasury yields, with the benchmark 10-Year yield falling below the 4% threshold.

Asset	Last Level	Weekly Change	Unit / % Change
WTI Crude	61.99	-4.96	USD/bbl
Brent Crude	65.58	-4.56	USD/bbl
Gold	3035.4	-86.3	USD/oz
EUR/USD	1.0951	-0.0099	Rate
USD/JPY	146.92	0.83	Rate
10-Year Note Yield	0.03992	-0.00062	Yield (%)