Yes, trade policy will steal the headlines this week, but don’t miss the important data coming your way.

First up, Tuesday’s NFIB Small Business Optimism Index. This report offers a detailed pulse on Main Street. It gives insights into how small businesses are thinking about hiring, investment, and the future overall. Last month’s numbers showed rising concern, so this one could reveal whether that nervousness is turning into action. Thursday and Friday bring March inflation data. Importantly, these releases won’t reflect the latest round of tariffs, so think of them as the calm before the storm.

Also on Thursday, we get a budget balance update. Normally this might fly under the radar, but given the state of the U.S. deficit and the noise around DOGE, this could pique interest for markets and media alike. And finally, Friday’s University of Michigan Sentiment Survey will round out the week. Based on the recent trend, we’re not expecting optimism, but we’ll be watching to see if consumers are still feeling the squeeze. Plenty to unpack!

The Macro Week In Review

Liberation Day: Why The Mag 7 Plunged

The Macro Week Ahead

👊 "Liberation Day" Beatdown

The stock market was “liberated” from trillions of dollars of value last week as President Trump surprised even the most ardent protectionists with the announcement of elevated “reciprocal” tariffs. Fiscal policy uncertainty has been a persistent drag on equity markets in recent weeks, and this latest move added a fresh layer of volatility to an already fragile landscape.

💥 Surveying The Wreckage

U.S. Equity Markets 1-Month Returns:

• S&P 500: -13.3% 📉

• Nasdaq 100: -14.8% 📉

• Dow Jones: -11.3% 📉

• Russell 2000: -13.1% 📉

Key U.S. Sectors 1-Month Returns:

• Utilities: -5.4%

• Consumer Staples: -5.6%

• Health Care: -9.2%

• Consumer Discretionary: -13.5%

• Financials: -14.3%

• Technology: -16.5%

Select S&P 500 Stocks 1-Month Returns:

• Microsoft (MSFT): -7.4%

• Tesla (TSLA): -15.9%

• Amazon (AMZN): -16.6%

• Nvidia (NVDA): -17.3%

• Apple (AAPL): -20.8%

☯️ Trump Vs. Powell ... Again

As the global economy teeters on the edge of a potential regime shift, Friday’s developments suggest rising tension between the White House and the Federal Reserve.

Labor market figures were broadly solid last week, as ADP, jobless claims, and payrolls all pointed to ongoing strength. The unemployment rate ticked up to 4.2% from 4.1%.

However, markets were more focused on Fed Chair Jerome Powell’s comments. As equities plunged on Friday, Powell remained measured, saying the Fed was “well-positioned to wait for greater clarity before considering policy adjustments.” Earlier that day, President Trump had taken to social media to pressure Powell to cut rates.

The market reaction was swift. The probability of a rate cut by the May Fed meeting fell from 55% to 30% by the end of Powell’s speech.

📅 The Week Ahead: Watching The Dominoes Fall

With tariffs officially enacted on April 5 and 9, the full impact won’t show up in the data immediately. However, early signs are emerging. We’ve seen a preemptive inventory buildup and a spike in the ISM Prices Paid Index to cycle highs, classic signs of supply chain padding.

Meanwhile, consumer sentiment has dropped sharply as households brace for potential job losses and inflation. Interestingly, Johnson Redbook Retail Sales remain strong at +5.0% y/y (week of 3/28). This suggests spending habits haven’t yet to shift, but should tariffs filter down to consumer prices (instead of being absorbed into supplier margins), we anticipate a slowdown in retail spending.

🔍 Final Thoughts: Eyes On Retaliation

Trade policy remains highly fluid. As we write this, global markets are bracing for potential retaliatory moves from U.S. trading partners. Treasury Secretary Scott Bessent summed up the administration’s stance:

“My advice to every country right now is do not retaliate.”

This seems unlikely, as many countries have already started to articulate their responses, and those who haven’t will certainly face political pressure to do so. We’ll continue to monitor developments closely and keep you updated as this rapidly evolving situation unfolds.

Macro Job Board

VP, Quantitative Investment Strategies Research @ Morgan Stanley (New York)

Conduct independent research on quantitative investment strategies across all asset classes with a focus on volatility in macro assets and equities. Experience in non-linear systematic strategies involving options for alpha generation or hedging is required.

VP, Global Macro Research Strategist @ Citi (New York)

Expected to collect, outline and explain information giving insights that drive creative solutions in the Macro environment in which our clients businesses operate. Their insights provide clarity the client needs to make investment decisions.

Global Macro Research Analyst @ Goldman Sachs (Washington, DC)

This candidate will closely monitor political and policy developments 
and assist economists to publish timely and innovative research on macroeconomic, political, and policy developments and their economic impact. They will also work on economic research projects and publications.

What We Read This Weekend

🐻 President Trump’s Mindless Tariffs Will Cause Economic Havoc

⚠️ Hedge Funds Hit With Steepest Margin Calls Since Covid Crisis

🐉 China Punches Back On Trump Tariffs

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