Good Morning Investors,
Markets are staggering this morning after President Donald Trump dropped the long-anticipated tariff hammer, unleashing the most sweeping overhaul of U.S. trade policy in a generation. Dubbed "Liberation Day," the announcement introduced a baseline 10% tariff on all trading partners, with additional levies for countries deemed to be “trade aggressors.” The result is a global recalibration of supply chains, a collapse in risk appetite, and a fresh bout of volatility that’s only just begun.
Futures Check: Markets in Freefall
U.S. equity futures collapsed overnight, as Wall Street digested the full scope of Trump’s tariff package. Nasdaq-100 futures are down 3.9%, while the S&P 500 is off 3.4% and the Dow has plunged over 1,000 points. Risk assets are under broad pressure as the market confronts not only the immediate economic impact of a tariff wave, but also the likelihood of retaliatory actions from key trade partners. Treasury yields are diving, oil is slipping, and gold—after an early spike—is retracing gains amid cash-raising across portfolios.
Market Framework: Tariff Shock Triggers Sell-Off
Trump’s tariffs are not merely symbolic. The White House confirmed that 185 countries face the new baseline rate, with punitive add-ons pushing effective duties to as high as 54% for Chinese goods and 20% for EU imports. The levies begin rolling out April 5. It’s a fundamental redrawing of the U.S. trade map—one that could quickly translate into higher consumer prices, weaker corporate margins, and a reversal of already-fragile economic momentum.
In the near term, I expect volatility to remain elevated, particularly as investors reassess corporate earnings and margins under a new cost regime. If the tariff levels remain elevated or broaden further, the risk is that this turns from a policy scare into a profit recession. But I still see a path for a more constructive second half. If tax cuts materialize later this year—as expected—and some of the headline trade risk is walked back, markets could find footing into Q4. Until then, technicals remain our best guide: with the S&P 500 and Nasdaq both under their 50- and 200-day moving averages, downside pressure persists.
Strategic Outlook: Charting Opportunity in Chaos
This kind of panic can create price dislocations that favor long-term buyers. While I’m not advocating wholesale dip-buying just yet, I do think it’s a good time to revisit your watchlist. Ask yourself which companies you wanted to own six months ago, and assess whether they’ve now reached more attractive entry points. I’d pay close attention to sectors that are insulated from direct trade pressure, or have domestic demand tailwinds.
One sector I’m watching closely: energy. After years of underperformance, the charts suggest energy stocks may be on the verge of breaking out from a multi-year base. With oil prices retracing but supply-side discipline holding, this could be a contrarian play as we move deeper into the year.
Tariff Tracker: Corporate Fallout Mounts
The fallout is immediate and wide-ranging. Retail giants like Walmart, Target, and Nike are warning of price hikes and margin compression. Apple has the most to lose given its China-dominated supply chain and saw shares fall over 7%. Automakers like Ford and Toyota are scrambling to offer incentives or shift production. Meanwhile, drugmakers enjoyed a brief reprieve after being exempted from initial tariff rounds, but industry leaders are warning that pharma could be next.
Most concerning is the lack of clarity from the White House. What was billed as a reciprocal regime now looks more like a tiered sanctioning mechanism. With that ambiguity, we should expect a wave of corporate guidance cuts, starting in the coming earnings season.
Mortgage Monitor: Rates Flat, Sentiment Falling
In the housing market, mortgage rates held steady, with the 30-year fixed at 6.70%. But demand remains shaky. Mortgage applications fell 1.6% last week, with refinance activity down 6% despite year-on-year gains. Purchase applications rose slightly, but affordability remains a challenge amid tariff-fueled inflation concerns and consumer uncertainty.
The bigger risk is downstream: if tariffs persist and push prices higher, homebuyer confidence may falter just as inventory levels begin to normalize. In short, rates may not rise, but that doesn’t mean housing escapes unscathed.
Analyst Watch: Recalibrating Targets
Amazon: RBC cuts target to $235 from $265, citing cloud headwinds and tariff-related pressure on retail margins.
Meta Platforms: RBC trims target to $740 from $800 amid rising legal risk and platform scrutiny.
Charles Schwab: Raymond James raises target to $90 from $88 on stronger trading volumes.
Landstar System: JPMorgan slashes target to $147 from $177 due to weaker transport demand.
Ncino: Stephens cuts target to $24 from $38, citing slower international bookings.
Closing Thought: Chaos Is Not the End—It’s a Beginning
Tariffs are disruptive, yes—but they are also a catalyst. We are witnessing a market that’s trying to price in an entirely new geopolitical framework. That process won’t be smooth. It will likely involve a re-rating of earnings, a repricing of supply chains, and a rethinking of valuations. But if we see targeted tax relief and easing inflation later this year, the back half of 2025 could still reward those with patience and perspective.
For now, eyes remain on Washington—and on Friday’s payrolls report—as we gauge just how far this correction has to run.
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.