Good Morning Investors,
After one of the most whiplash-inducing weeks in recent market memory, Friday opens with a bit more poise—but the storm clouds haven’t cleared just yet.
Yesterday’s rebound attempt fizzled after China escalated the trade war again, raising tariffs on U.S. imports to 125%—a direct response to President Trump’s ballooning 145% duty on Chinese goods. And while Beijing made it clear this was retaliation, it also suggested it wouldn’t continue hiking tariffs further, signaling a possible plateau in hostilities. Markets took this as a subtle olive branch, with futures creeping higher in early trading.
This is still a growth scare—not a recession. The economy is slowing by design, as labor market softness and policy-driven volatility offer a window for eventual rate cuts without reigniting inflation. It’s noisy, but it’s deliberate.
BEFORE THE BELL
Wall Street futures ticked higher in choppy fashion. The S&P 500 and Nasdaq were up about 0.2–0.3%, with the Dow just above flat. Still, the scars from this week’s tariff turmoil are deep: Thursday saw another sharp selloff with the S&P down 3.5% and the Nasdaq off over 4%, wiping out a good chunk of Wednesday’s historic rally.
Overseas, Japan’s Nikkei closed down nearly 5% while China and Hong Kong staged a modest rebound—buoyed by semiconductors and whispers of state-backed buying. In Europe, sentiment was weaker with markets in the red, while gold surged past $3,200 and the dollar continued its slump, hitting a 10-year low against the Swiss franc.
All eyes now turn to March’s PPI data and the University of Michigan’s sentiment print—both key markers for understanding inflationary trends ahead of the next Fed pivot.
BANKING EARNINGS SET THE TONE
Earnings season kicked off in earnest with results from JPMorgan, Morgan Stanley, Wells Fargo, and BlackRock. The headline? Trading saved the day.
JPMorgan Chase posted a 9% jump in Q1 profit, helped by a 48% surge in equity markets revenue and steady investment banking fees. CEO Jamie Dimon praised the bank’s resilience but warned the U.S. economy is facing “considerable turbulence” driven by tariffs, inflation, and geopolitical risk. First Republic’s acquisition added a modest tailwind, and shares were up pre-market.
Morgan Stanley followed suit, with a 26% jump in earnings and a 45% spike in equity trading revenue—particularly strong in Asia and hedge fund activity. Fixed income also ticked higher. But, like JPMorgan, Morgan Stanley struck a cautious tone on the outlook for investment banking amid policy uncertainty.
Wells Fargo reported a 6% earnings lift, with strong performance in its wealth and investment business. CEO Charlie Scharf urged a timely resolution to trade tensions and warned of a “slower economic environment” in 2025 if uncertainty persists.
BlackRock saw AUM reach a record $11.58 trillion, but profit fell 4% due to rising expenses. CEO Larry Fink said client conversations are dominated by "uncertainty and anxiety," reminiscent of prior dislocations like COVID or the GFC. Still, inflows into ETFs and defensive products suggest investors are repositioning, not retreating.
OTHER CORPORATE HEADLINES
Alphabet laid off hundreds in its platforms and devices unit following earlier voluntary exits. Stellantis shipments fell 9% YoY due to North American disruptions. Tesla suspended new orders for Model S and X in China, a clear casualty of the tit-for-tat tariff escalation. Meanwhile, JD.com launched a massive fund to support Chinese exporters shifting to domestic sales. Lucid announced a targeted acquisition of Nikola’s Arizona assets, aiming to hire 300 former employees.
Notably, Chevron’s Venezuela export authorizations were partially revoked, and BP warned of weak gas trading performance. UBS hired Evan Raine to boost its M&A push in telecoms. Logitech withdrew its 2026 forecast, citing Trump’s unpredictable tariff policy.
MACRO FRAMEWORK
Investor anxiety is running hot. The dollar index fell another 1% Friday, with the Swiss franc hitting its strongest level against the greenback since 2015. Gold, the week’s undisputed winner, broke out to another record high. Treasury yields ticked higher, with the 10-year nearing 4.41%, as inflation data looms.
Despite Thursday’s rout, the major indexes are still on track for a strong week—thanks entirely to Wednesday’s post-tariff-pause surge. The S&P is set for a 3.8% gain, the Nasdaq up 5.1%, and the Dow higher by 3.3%. But make no mistake: the gains are fragile, and the macro backdrop remains volatile.
Still, I maintain this is a bottoming phase—not a collapse. The wild swings we’re seeing are consistent with historical turning points, and if tariffs are scaled back and debt markets stabilize, the stage is set for a second-half rally.
STRATEGIC OUTLOOK
This remains a policy-induced slowdown, and that is exactly what I flagged back in March. The administration wants room to refinance debt and potentially roll out tax incentives ahead of Q3. If inflation softens and tariffs are walked back—or even hinted to be—this market can reprice quickly.
I’ve been saying for weeks: this is a buying opportunity for long-term investors. Stick with structural themes—AI infrastructure, enterprise software, defensive growth—and remain patient. Markets don’t wait for the all-clear. They bottom when everyone’s looking the other way.
As Jamie Dimon put it: hope for the best, but prepare for a wide range of outcomes. Investors who stay focused on fundamentals, defensive quality, and strategic rebalancing should find footing amid the chaos.
Please feel free to reach out to me on LinkedIn or by email if you would like help navigating this market environment or have any planning-related questions.
Dan Sheehan
This newsletter is for informational purposes only and should not be considered as investment advice. Please consult with your financial advisor about your specific situation.