Good Morning Investors,
Markets are opening the week on firmer footing after a chaotic fortnight of tariff escalations, corporate handwringing, and a bond market that looks more like a volatility index than a safe haven. Yet here we are—with equity futures pointing higher, led by a rally in tech, and the narrative shifting once again.
Friday’s surprise tariff exemption on smartphones and computers offered temporary reprieve to a sector battered by uncertainty. Apple jumped over 5% premarket, Nvidia followed, and the Nasdaq staged a comeback bid. But just as quickly, the goalposts shifted again. Over the weekend, President Trump and Commerce Secretary Howard Lutnick clarified that these exemptions may be short-lived, part of what they’re now calling a "special focus" tariff approach. Semiconductors appear next on the list.
The question, as always, is whether this is still a growth scare—or the early innings of something more severe. I remain in the former camp. These fits and starts, erratic headlines, and policy pivots are all part of a deliberate softening strategy. In my March thesis, I suggested the White House would lean into tariffs to generate deflationary slack, before moderating its stance in time for debt financing and possible tax reform in H2. That’s still the roadmap I see unfolding.
BEFORE THE BELL
Global markets reacted positively to the latest exemption list, even if the messaging remains unclear. Futures are up across the board—S&P 500 futures gained 1.5%, the Nasdaq rose 1.7%, and the Dow tacked on 388 points. European and Asian tech shares led the charge, while oil climbed on stronger Chinese crude import data and softening fears of immediate global slowdown. Gold, the standout winner of last week, eased slightly.
Tech is getting a bounce, but it’s fragile. Trump’s Truth Social post on Sunday disputed media reports about permanent exemptions, suggesting that these products are simply shifting tariff categories. And with semiconductors now in focus for national security review, the broader electronics complex may not be out of the woods.
TARIFF WHIPLASH, TECH RESURGENCE
Trump's tariff oscillation has created more noise than signal—but that’s the point. The administration is testing how far it can push policy leverage without breaking the economy. The Magnificent 7 index remains under pressure, down 5% since the April 2 announcement, but saw sharp intraday reversals last week. Short-covering, bargain hunting, and expectations of Fed support helped steady the tape.
As we enter the second full week of earnings season, tech’s leadership role is being tested. Key product exclusions lifted Apple, Dell, and others temporarily, but the looming threat of sector-specific tariffs remains a headwind. That said, the exclusion of smartphone and computer hardware from the 125% levy was no accident—it signals awareness that breaking supply chains would trigger unintended economic consequences.
STOCKS TO WATCH
Alphabet & Nvidia: Backing a new AI venture, SSI, co-founded by former OpenAI scientist Ilya Sutskever, highlighting the continued race for AI scale and compute power.
Apple & Dell: Beneficiaries of Friday’s tariff exclusions. Watch for volatility as policy statements evolve.
Meta: Facing an antitrust trial that could redefine the social media landscape. The FTC wants to unwind its Instagram and WhatsApp deals—a case with massive implications for M&A precedent.
BP: New Gulf of Mexico oil discovery could support its U.S. production ramp.
Chevron & Exxon: FTC reviewing executive board bans tied to recent acquisitions. Meanwhile, Venezuelan exports remain in limbo amid payment uncertainty.
Pfizer: Scraps development of a weight-loss pill following liver toxicity concerns.
Sony: Raising PS5 prices across Europe and the UK amid inflation and FX volatility.
Ryanair & Telefonica: Restructuring regional exposure amid regulatory pressure and performance risk.
U.S. Steel: Trump reiterates opposition to foreign ownership, clouding the Nippon deal.
MARKET FRAMEWORK
Despite last week’s mid-week rebound, sentiment remains strained. The S&P 500 is down 6% since the April 2 tariff announcement. The 10-year Treasury yield soared last week, raising questions around rate volatility and stock-bond correlations. Piper Sandler called the bond action a "new negative" that injects further instability into an already murky macro environment.
We’re seeing rising rate volatility, thin liquidity, and diminished corporate guidance. Companies like Delta and JPMorgan have used the word “murky” to describe outlooks. I’d go a step further—it’s indecisive uncertainty. It creates mispricing.
STRATEGIC OUTLOOK
We remain in a bottoming process. It’s uncomfortable, contradictory, and often irrational—but that’s how turning points look. As I said last month, the confluence of rate pressure, tariff noise, and sentiment collapse is part of the shakeout.
What matters is discipline. Big picture macro data is softening. Retail sales on Wednesday could show strength in March as consumers pull forward purchases ahead of higher prices—but weakness is expected to emerge by Q3. The Fed, for its part, remains on hold. If inflation behaves and political pressure mounts, the case for cuts is back on the table by summer.
I still see a strong second-half recovery as plausible—driven by reduced policy risk, debt roll refinancing's, and stimulus hints ahead of the election window. Until then, elevated volatility should be viewed as opportunity. I continue to advocate selective buying in secular winners—AI, infrastructure, healthcare—and disciplined cash deployment.
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.