Anna's Markets Recap

_{Just facts, you think for yourself}

Saturday, 5:23 AM

April 5, 2025

Good morning news friend! Here is a quick recap of what happened in the markets this week. 📰🌟

Economic & Market Overview

Early in the week, stocks fell amid escalating trade tensions, but by Friday, the market rebounded strongly— the S&P 500 advanced by 1.8% and the Nasdaq Composite rose by 2.1% in one day, erasing earlier losses and achieving their strongest weekly gains in over a year.

Trade policy played a significant role in driving investor sentiment. The U.S. introduced new import duties, which triggered retaliatory tariffs from China. Tariffs for 75 countries were paused for 90 days.

China’s tariffs stand at 145% while tariffs for US products in China received a 125% tariff.

Producer prices for March fell by 0.4%, suggesting that wholesale inflation may be easing. However, consumer inflation expectations spiked to 6.7%, a level not seen since 1981.

Bond markets reflected the broader uncertainty, with the 10-year U.S. Treasury yield climbing from about 4.0% to nearly 4.58% before moderating to around 4.48%.

This sharp change was partly due to foreign investors selling U.S. Treasurys amid the trade tensions, a move that might raise borrowing costs for consumers and businesses.

By Friday, gold had blasted through the $3,200 per ounce threshold for the first time ever, climbing as high as about $3,244/oz in intra-day trading​.

Technology & Growth

Alphabet announced plans to invest around $75 billion to expand its data centers, while Microsoft projected more than $80 billion in cloud infrastructure spending, reflecting ongoing investments in cloud and artificial intelligence.

Tesla, after reporting a 13% drop in first-quarter sales to 336,000 vehicles and missing expectations amid rising competition, saw its shares recover following a report that Elon Musk might reduce his political advisory role.

Apple faces pressure from U.S.-China tensions, with tariffs on Chinese imports up to 145%. Over one million Chinese workers make iPhones, but shifting production to India or Vietnam will take years. A U.S.-only supply chain could raise iPhone costs to $3,500.

Financial Institutions

JPMorgan Chase reported first-quarter profits above expectations, supported by higher interest rates that increased net interest margins, loan growth, and consumer credit card spending.

Wells Fargo and Morgan Stanley posted Q1 profits that surpassed expectations, and Bank of America traded higher as investors anticipated its upcoming report.

Long-term yields climbed rapidly during the week, potentially boosting banks’ lending profits if economic growth does not slow, while Federal Reserve remarks on market liquidity provided additional support.

Consumer Staples & Healthcare

President Trump vowed to target pharmaceutical imports, which caused shares of AbbVie and other large drugmakers to slip. Regulatory actions also influenced the market; for example, AbbVie initiated legal action to block state laws aimed at limiting drug prices.

The FDA expanded approval of Eli Lilly’s drug Omvoh to include treatment for Crohn’s disease. In addition, both Johnson & Johnson and AbbVie introduced new products—such as AbbVie’s autoimmune drug Rinvoq, which received European approval.

UnitedHealth Group’s shares rose following a government announcement that Medicare Advantage reimbursement rates for 2026 would increase by 5.06%. This update raised margins for insurers such as UnitedHealth and Humana.

Energy & Industrial

Exxon Mobil's stock dropped after crude oil prices fell to levels not seen in about four years. Oil prices declined as traders responded to the possibility of a recession caused by trade tensions.

Brent crude dropped below $60 per barrel and U.S. oil inventories exceeded expectations. At one point, Exxon fell about 15% from its level before the tariff announcements.

Later in the week, energy stocks recovered as investors began purchasing oversold names. Exxon Mobil released an update indicating that higher oil and gas prices earlier in the quarter would increase its first-quarter profit by nearly $900 million.

Sources: Investopedia, Reuters.

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Baked with love,

Anna Eisenberg ❤️