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Moneta Markets

Weekly market wrap 31 March – 4 April 2025

April 4, 2025 |

Daily Market Update: April 4, 2025

Overview:
April 4, 2025, Wall Street experienced a tumultuous session, closing with significant losses as fears mounted over the economic fallout from President Donald Trump’s newly imposed tariffs. The sweeping trade measures, including a baseline 10% tariff on all U.S. imports and higher levies on key trading partners, triggered widespread sell-offs, reigniting recession concerns and marking the steepest single-day decline since the COVID-19 crisis in 2020.

Major Indices:

  • The Dow Jones Industrial Average plummeted by over 1,679 points, a 3.98% drop, closing at 40,545.93.
  • The S&P 500 shed 274.45 points, or 4.84%, ending at 5,396.52, wiping out $2.4 trillion in market value—its largest one-day loss since March 2020.
  • The Nasdaq Composite fell 1,050.44 points, a 5.97% decline, to 16,550.61, driven by heavy selling in tech and retail stocks.

Sector Highlights:

  • Banking: U.S. bank stocks took a beating as Trump’s tariffs clouded the outlook for dealmaking and loan demand. Major players like Citigroup, Bank of America, and JPMorgan Chase saw declines ranging from 7% to 12.1%, reflecting fears of reduced economic activity and tighter margins.
  • Energy: Oil prices cratered, with Brent crude dropping 6.42% to $70.14 per barrel and WTI crude falling 6.64% to $66.95 per barrel—the steepest single-day decline in three years. The plunge was fueled by tariff-related demand fears and OPEC+’s surprise decision to boost supply starting in May.
  • Technology: Big Tech led the rout, with Apple sinking 8-9.3% amid concerns over its China-centric supply chain, losing over $310 billion in market value. Nvidia dropped 5.6%, and Microsoft fell 3%. Analysts warn that Trump’s tariffs could disrupt Big Tech’s ambitious U.S. data center expansion plans, adding further pressure.
  • Retail: Retail giants like Nike (-14.4%), Ralph Lauren (-16.3%), and Best Buy (-17.8%) were hammered as tariffs on production hubs like China, Vietnam, and Indonesia threatened higher costs and slimmer margins.
  • Pharma: Pharmaceutical stocks bucked the trend, surviving the market rout relatively unscathed due to tariff exemptions on imported drugs. However, uncertainty lingers as companies lobby for phased implementation to mitigate future risks.

Commodities:

  • Gold: After hitting a record high above $3,160 per ounce earlier in the session, gold pulled back slightly, closing down 0.85% at $3,106.99 per ounce. The retreat followed the broader market sell-off but underscored its safe-haven appeal amid tariff turmoil.
  • Oil: The energy sector was the hardest hit among S&P 500 sectors, down 7.5%, as crude prices collapsed under the dual pressure of tariffs and increased OPEC+ output.

Market Sentiment:
The CBOE Volatility Index (VIX), Wall Street’s “fear gauge,” surged to 30.02—its highest close since August 2024—signaling heightened investor anxiety. Analysts from JPMorgan and Goldman Sachs raised U.S. recession odds to 40% and 35%, respectively, citing the tariffs’ potential to disrupt global trade, inflate costs, and stifle growth. Traders are now pricing in aggressive Federal Reserve rate cuts, with expectations of up to 100 basis points by year-end.

Looking Ahead:
All eyes are on today’s U.S. payrolls data and Fed Chair Jerome Powell’s speech, which could provide critical clues about the economy’s resilience and the Fed’s response to mounting pressures. Retaliatory measures from China, the EU, and other nations loom large, potentially exacerbating global market volatility. Investors remain on edge, bracing for further fallout as the full scope of Trump’s trade policies unfolds.

Key Takeaway:
April 4, 2025, marked a stark reversal from the optimism that followed Trump’s November election win, as his tariff agenda upended markets and reignited fears of a global economic downturn. With uncertainty dominating, safe-haven assets like bonds and gold remain in focus, while riskier sectors face a challenging road ahead.

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