Market Drama

Welcome to this week’s Market Drama! 

Stock Market Update:

• S&P 500: Down 0.2% for the week, up 2.5% year-to-date.
• Nasdaq: Down 0.5% for the week, up 1.1% year-to-date.
• Why is the market up year-to-date?
  • Financials have surged ~8% this year, while Tech remains down 1%.
  • Tech stocks have yet to recover from the impact of DeepSeek’s news.

• Tariff Uncertainty:
  • Monday: Markets opened down 2% following President Trump’s announcement of a 25% tariff on imports from Canada and Mexico, plus 10% levies on Chinese imports.
  • Monday Afternoon: Tariffs on Canada and Mexico were postponed for 30 days, easing market concerns through Thursday.
  • Friday: Markets sold off slightly heading into the weekend.
  • Weekend: New concerns emerged regarding potential additional tariffs.
• Jobs Data:
  • Last month’s job report: 143,000 jobs added (vs. expectations of 175,000).
  • 3-month average: 241,000 jobs, well above the 165,000 average of the past 12 months.
• Employment Trends:
  • • Unemployment rate: Dropped to 4.0%, below the long-term average of 5.7% and better than expectations of 4.1%.
    • Average hourly earnings: Increased to 4.1%, exceeding expectations of 3.8%.
      • Good news: Wage growth is outpacing inflation, boosting consumer spending (which drives 68% of the economy).
      • Bad news: Higher wages could contribute to rising service inflation.
• Earnings:
  • 60% of S&P 500 companies have reported earnings.
  • 77% exceeded expectations, surpassing the 10-year average of 75%.
  • Headline Company: Amazon missed expectations

Next Week: 

• CPI inflation data
• Retail sales data

Stay tuned for next week.

– Andres