Asset Management Weekly Market Commentary

Market updates for the week ending
April 11, 2025

Key observations

• The U.S. announced a 90-day pause on reciprocal tariffs on its trading partners, excluding China, mid-day on Wednesday which led to short covering and a sizable rally in U.S. equity indices. The S&P 500 turned out its best one-day performance since October of 2008 on Wednesday, but market participants appeared eager to sell into any strength and forced the S&P 500 sharply lower on Thursday. Friday initially had the feel of a buyer’s strike as market participants didn’t want to be too long or too short going into a weekend, but stocks staged an afternoon rally as investors positioned for some positive market moving news.
• Treasury yields rose sharply over the balance of the week due to concerns that liquidity was drying up and that governments and central banks abroad would be less willing to buy U.S. government debt in the coming quarters as they seek leverage in trade negotiations. Results from 10- and 30-year Treasury auctions mid-week were encouraging and briefly allayed concerns surrounding demand from abroad. The move higher in yields appeared to attract some buyers late in the day Friday and the 10-year yield closed just a few basis points shy of 4.50%.
• The U.S. Dollar Index (DXY) weakened materially over the balance of the week, closing at its lowest level in three years. Dollar weakness alongside the sharp rise in Treasury yields is a worrisome combination as it points toward capital flight out of the U.S. The trend of capital being repatriated abroad may have further to go, putting additional downward pressure on the dollar and upward pressure on yields, providing a tailwind for foreign stocks and bonds and a headwind for U.S.-based assets.

What we're watching

• Quarterly reporting season ramps up in a big way this week with 44 S&P 500 constituents slated to post results. Names such as Bank of America, Goldman Sachs, Netflix, and UnitedHealth Group are reporting this week, and could dictate the near-term direction for stocks, assuming an absence of market-moving news on the tariff/trade front.
• March Retail Sales are released Wednesday with the consensus expecting Control Group sales to rise 0.6% after a 1.0% rise in February.
• Initial Jobless Claims for the week ending April 12 and Continuing Claims for the week ending April 5 are released Thursday. Initial claims for unemployment insurance are expected to rise modestly to 225k from 223k the prior week.