Equity Markets Mostly Lower on Tariff Fears

Stocks trended higher for much of last week until Friday, when a Friday slide pulled several of the major benchmark indexes lower. Only the Dow and the Global Dow ended the week with gains, while the NASDAQ, the S&P 500 and the Russell 2000 finished in the red. Last Friday, word that the president would enforce tariffs against Canada, China and Mexico cooled investors’ appetite for risk, sending bond yields and the dollar higher. Crude oil prices ended the week on an uptick but not enough to prevent prices from closing last week lower.

Fed Paused Rate Cuts

The Federal Open Market Committee (FOMC) met last week and decided, unanimously, to maintain the current federal funds target rate range at 4.25%-4.50%. While noting that both the economy and the labor market remained solid, inflation stayed elevated. The FOMC made its decision despite President Trump’s request that it cut interest rates. Subsequent to the meeting, Federal Reserve Chair Jerome Powell indicated that the Fed needed to allow the economic policies of the Trump administration to be articulated prior to making any assessment.

Eye on the Week Ahead

This week’s focus is on the labor sector with the releases of the JOLTS report and the employment situation. Overall, employment has been steady, which has factored into the Fed’s decision to maintain rates.