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Wall Street Faces Significant Declines as Economic Uncertainty Rises
As March draws to a close, Wall Street is bracing for substantial monthly and quarterly losses following another challenging week. The turbulence can be attributed largely to economic and inflation uncertainties, significantly influenced by President Donald Trump’s trade tariffs—both those currently in effect and those proposed.
The recent downturn in the artificial intelligence sector exacerbates the situation, highlighted by CoreWeave’s initial public offering (IPO), which fell short of investor expectations. Priced at $40, CoreWeave—the largest tech IPO in the U.S. since 2021—opened at $39, peaked at $41.92, but ultimately closed at $40. This reflects concerns within the tech industry at a time when inflation data exceeded forecasts, driving down overall market performance.
Market Performance Overview
During the last trading session, the S&P 500 fell by 1.5%, while the Nasdaq Composite dropped 2.6% over the course of the week. The S&P 500 is perilously close to entering correction territory, currently just under a 10% decline from its most recent peak, while the Nasdaq is down approximately 14.3%. As of the market’s close on Friday, the S&P 500 has seen a decline of 6.3% in March, and the Nasdaq has dropped by 8.1%. These declines indicate both indices are on track for their worst monthly performances since late 2022.
In the broader context of the first quarter, the S&P 500 is down 5.1%, while the Nasdaq has experienced a more pronounced decline of 10.3%. Both indices are projected to end their five-quarter streak of gains and face their weakest quarterly results since early 2022.
Upcoming Economic Indicators
The upcoming week is set to be relatively quiet for earnings reports, particularly with no significant announcements from noteworthy companies until mid-April when banks report their financial results. However, two key areas will be under scrutiny: developments regarding tariffs and jobs data.
1. Trade Tariffs
Wednesday, April 2, is a crucial date as President Trump indicated that reciprocal tariffs will take effect, imposing additional levies on U.S. imports from trading partners. Reports suggest the European Union is considering concessions to mitigate the effects of these tariffs. Additionally, temporary exemptions related to previously imposed tariffs on Canada and Mexico under the United States–Mexico–Canada Agreement (USMCA) are set to expire on the same day.
Last week, Trump announced a 25% tariff on autos and auto parts not manufactured in the United States, set to begin April 3. During a recent call with major auto executives, Trump cautioned against raising prices due to these tariffs, asserting that consumers would prefer American-made vehicles despite any potential price hikes.
2. Employment Data
As investors navigate tariff-related news, a series of job data releases will be crucial, culminating in the government’s March employment report on Friday. On Tuesday, the Labor Department will release its Job Openings and Labor Turnover Survey (JOLTS), with expectations of job openings decreasing from 7.74 million in January to about 7.67 million in February. This data is anticipated to reflect the ramifications of the federal workforce reductions implemented by the current administration.
On Wednesday, the ADP will publish its private payrolls report, predicted to indicate that U.S. companies added 120,000 jobs in March—an improvement compared to February’s 77,000, yet significantly lower than January’s revised figure of 186,000. Economists project that March’s nonfarm payrolls growth will reach approximately 122,500, a decrease from February’s 151,000, with the unemployment rate expected to slightly rise to 4.2%. Wage growth is anticipated to remain at 4% year-over-year, consistent with February’s increase.
Key Upcoming Economic Releases
- Monday, March 31: Chicago PMI at 9:45 a.m. ET
- Tuesday, April 1: ISM Manufacturing at 10 a.m. ET, JOLTS Survey at 10 a.m. ET
- Wednesday, April 2: ADP Employment Survey at 10 a.m. ET
- Thursday, April 3: Initial Jobless Claims at 8:30 a.m. ET, ISM Services PMI at 10 a.m. ET
- Friday, April 4: Nonfarm Payrolls Report at 8:30 a.m. ET
The upcoming week will likely bring significant attention to economic trends as traders assess the potential impacts of tariffs and employment data on market sentiments.
Source
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