While some investors are worried about the new US tariff measures, some analysts are more optimistic.
News Analysis
US stocks suffered in their worst week since the Covid-19 recession.
The S&P 500 ended at 5,074 on April 4, down 9.08% in a week. The Dow Jones industrial average fell 7.86% to close at 38,314. The Nasdaq fell 10.02% to close the week at 15,587. Meanwhile, the Small-Cap Russell 2000 fell 9.7%, ending at 1,827.
The deal began aggressively early in the week, with bargain hunters returning to the market, shaking some complicated reports about the US economy.
The report also showed that the price payment index surged to 69.4, rising ahead of market expectations of 64.6 from 62.4 the previous month. It marked the highest reading since June 2022, showing rising costs for US companies, and also confirming that inflationary pressures are back in the economy.
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Things changed drastically on the afternoon of April 2nd after Washington announced a new mutual tariff system. Tariffs for Vietnamese and Chinese products were set at 46% and 34%, respectively.
Markets tend to respond negatively to tariffs as they raise concerns about deglobalization and fragmentation of global trade.
Deglobalization is expected to narrow revenue in two ways in these companies. In terms of cost, imported products from countries such as Vietnam and China are high, which affects rising prices and economic declines, thus facing revenue prices.
Additionally, the epic Seven stocks, including Tesla, Apple and Nvidia, which have a significant presence in China, have been sold due to fear of Beijing’s retaliation.
Sales deepened and expanded on April 4th as China coincided with US tariffs.
The April 4 sale also collided with McDonald’s and Berkshire Hathaway.
Glen Smith, chief investment officer at Flower Mound, Texas-based GDS Wealth Management, was encouraged by the news, with a $1.2 billion worth.
“Even with tariff uncertainty and federal job cuts, the economy still shows that jobs are creating at a robust pace, and employment growth is undoubtedly the most important economic indicator,” he told The Epoch Times.
However, he noted that employment data is retrospective and does not show how employers will function in the coming months.
Smith said the stock market remains within the typical market corrections, even if it had fallen below the mid-March decline.
“The stock market corrections tend to be faster along the way and faster along the way. We believe investors should be looking for opportunities to buy,” he said.
Emily Bowersock Hill, CEO and founding partner of Bowersock Capital Partners in Lawrence, Kansas, has expressed concern about tariff retaliation by other countries. Her company has reduced the S&P 500 year-end target from 6,000 to 5,700.
John Zolidis, equity analyst and president of Quo Vadis Capital, believes the media is exaggerating the impact of tariffs on financial markets.
“Remember, the media business model is to promote engagement. There is an increase in engagement, especially when there is something new. “Therefore, we should not be surprised that tariff coverage focuses on amplifying basic human emotions.”
