The S&P 500 lost 9.1% last week amid worries about the impact of the U.S. President Donald Trump’s reciprocal tariffs on global economic growth and inflation. The index is now down 13.7% since the start of the year.
The U.S. imposed 10% blanket tariffs on all countries and additional duties on specific trading partners including China and Japan. Tariffs on Canada and Mexico, the U.S.’s largest trading partners, had previously been announced. Chinese goods imported into the U.S. will face a 54% tariff rate starting April 9.
China plans to impose an extra 34% tariff on U.S. goods starting April 10.
The escalating trade war has raised concerns about a possible global recession. Beijing will also limit exports of key rare-earth minerals and placed 11 U.S. companies on an “unreliable entity” list.
Data last week showed the U.S. goods and services deficit narrowed more than projected in February to $122.7 billion, according to the US Census Bureau and the Bureau of Economic Analysis. The deficit declined $8 billion from $130.7 billion a month earlier.
The March employment report showed nonfarm payrolls rose by 228,000, well above the 140,000 jobs increase expected in a survey compiled by Bloomberg. However, February payrolls had a downward revision to a 117,000 increase and January payrolls were revised down to a 111,000 increase, for a net downward revision of 48,000 jobs. The unemployment rate rose to 4.2% in March from 4.1% in February, compared with a 4.1% rate expected.
All sectors of the S&P 500 were in the red. Energy had the largest percentage drop, sliding 14%, followed by 11% decline in technology, a 10% loss in financials and a 9.4% decrease in industrials.
This week, the Q1 reporting season will kick off with reports expected from companies including JP Morgan Chase (JPM), Wells Fargo (WFC), Progressive (PGR), BlackRock (BLK), Constellation Brands (STZ) and Delta Air Lines (DAL).
Economic data will include February’s consumer credit report and March’s consumer and producer price indexes.
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