By: Jeffrey Buchbinder, Chief Equity Strategist, LPL Financial, Adam Turnquist, Chief Technical Strategist, LPL Financial, Jeffrey J. Roach, Chief Economist, LPL Financial, Kristian Kerr, Head of Macro Strategy, LPL Financial, and Lawrence Gillum, Chief Fixed Income Strategist, LPL Financial

Markets got quite a surprise from the Trump administration last week in the form of tariffs above even the most aggressive forecasts, increasing the risks to economic growth and corporate profits. China quickly retaliated, Europe may follow with tariffs of their own, and some countries may boycott American goods. Some of these tariffs will be passed along to already inflation-weary consumers in the form of higher prices, which will drag down consumer spending while also putting anticipated Federal Reserve (Fed) rate cuts into question. However, there are some possible silver linings once the dust settles. We’re past peak uncertainty and maybe peak pessimism as well. Tariff rates should go down from here as negotiations begin. Interest rates should head lower as the deficit narrows, bringing borrowing costs down. Oil prices are down sharply. And tax cut extensions will be larger and easier to pass. Long-term investors may want to consider doing a little rebalancing into stocks this week after recent bond market gains. More active traders may want to wait for better headlines before stepping in.

After much anticipation, the tariff band-aid was finally ripped off on Wednesday, April 2. Unfortunately for the stock market, the news was painful as the White House rolled out 10% universal tariffs on all imports coming into the country, with additional duties levied on countries operating with large trade deficits with the U.S. The size and scope of the tariffs caught the market off guard, causing a sharp sell-off in global equity markets as market participants assessed the potential impact of the new trade policies on economic growth, inflation, interest rates, and corporate profits. Here we share some of our key takeaways from the news (there’s a lot to unpack) and discuss some silver linings that didn’t get much attention last week and may set the stage for a durable stock market low.

Read the full commentary here: Weekly Market Commentary 04.07.2025