The tariff rollercoaster continued Wednesday, with President Donald Trump partially walking back levies on Mexico and Canada, offering a temporary reprieve until April 2nd. However, unlike previous tariff relief announcements, stocks failed to rally, suggesting investor fatigue with trade policy uncertainty.
Markets
1️⃣ Trump’s Tariff Pause Fails to Lift Markets
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Mexico Tariff Rollback: Trump announced that Mexico will not face tariffs on goods covered under USMCA, following discussions with President Claudia Sheinbaum
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Canada Tariff Adjustment: A similar tweak was applied later in the day.
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China Tariffs Remain in Place.
Despite this, investors showed little enthusiasm, with stocks initially recovering but then sliding further. This shift suggests markets are less willing to react positively to short-term trade headlines and are focused on broader economic risks.
One clear sign of growing uncertainty: The Federal Reserve’s Beige Book report mentioned the word “uncertainty” 45 times, underscoring concerns about the economic outlook.
2️⃣ Stocks Slide Further—Tech and Financials Hit Hard
🔻 The $NASDAQ(.IXIC)$ fell 2.6%, entering correction territory (-10% from its high) 🔻 Tech stocks tumbled 2.8%, as AI hype faded $NVIDIA(NVDA)$ $Palantir Technologies Inc.(PLTR)$ 🔻 Financials dropped 1.7%, extending a rough stretch for banks
$XLK
Key Sector Moves: Tech Woes Continue: AI-driven stocks have struggled in early 2025, as investors question whether massive spending on AI infrastructure will deliver the expected returns. Marvell Technology plunged 20%, despite an earnings beat—their AI-driven growth story didn’t impress enough. Financials’ Slump Suggests Economic Worries: Banks are economically sensitive, and their continued decline signals growing recession concerns.
However, there was a glimmer of hope after hours: $Broadcom(AVGO)$ surged 11% after beating expectations and expressing strong confidence in AI demand.
$AVGO
3️⃣ Recession Signals? Jobs Report & Consumer Spending in Focus
Jobs Data Coming Today: Economists expect 158,000 new jobs (up from January’s 143,000). Unemployment rate expected to hold steady at 4%. Recent rise in jobless claims is fueling fears of an economic slowdown
Gasoline demand dropped 1.5% last week vs. last year, hinting at a possible slowdown in consumer spending—a crucial factor for GDP growth.
4️⃣ Market Sentiment: Risk Aversion Growing
📉 The $S&P 500(.SPX)$ is down 4% from its recent record high, as investors shift toward defensive sectors like healthcare. Tech’s dominance is fading: S&P 500 Consumer Staples have outperformed Tech by over one standard deviation—a rare occurrence that signals a risk-off environment.
Outlook: Rate cut expectations are rising, which could provide a safety net for markets. Big tech earnings remain a wild card—Broadcom’s positive report could stabilize sentiment. The Fed may step in if economic conditions deteriorate further.
🔍 Bottom Line: Caution Rules, as Market Looks for Clarity
Markets are losing patience with trade policy uncertainty—tariff reprieves are no longer enough to drive optimism. Tech remains under pressure, financials signal economic concerns, and investors are shifting toward defensive sectors. jobs report could be a major catalyst—either reassuring markets or fueling more recession fears…
For now, the market is in a “wait-and-see” mode, with volatility likely to persist…
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This summary is for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making investment decisions.
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