Market Recap - Monthly Market Commentary – June 2025

Market Update

Equities posted strong returns in June as global trade tensions eased.

Global stocks posted solid gains during the month as the U.S. and China agreed to a 90-day tariff reduction. After declining to its 2025 low on April 8th, the S&P 500 Index rallied +18.9% through the end of May. Against this backdrop, risk assets performed well as U.S. job growth remained steady, and inflation continued to decline.

• U.S. stocks rebounded during the month as trade tension de-escalated: Large cap stocks (S&P 500 Index) rose +6.3% and outperformed small caps (Russell 2000 Index) which gained +5.3%. In addition to easing trade tensions, U.S. firms posted first quarter financial results and provided forward guidance that were largely more positive than expected.

• Bonds (Bloomberg U.S. Aggregate Bond Index) declined as longer-term rates rose: The widely followed bond index lost -0.70% as the 10-year U.S. Treasury yield increased from 4.17% to 4.41% (+0.24%).

• International stocks trailed U.S. stocks for the first month since November: Developed market stocks (MSCI EAFE Index) gained +4.6% and topped Emerging Markets (MSCI EM Index) which returned +4.3%. Taiwan, a 17% weight in the EM Index, gained +12.5% on trade policy optimism and sensitivity to recent strength in the U.S. technology sector.

Equities

Technology stocks were the top performing sector for the second consecutive month. 

Equity market volatility subsided in May on mostly positive trade policy developments. The S&P 500 reversed its losses from early in the year, and the index is now positive year-to-date (+1.1%). 

• Large cap technology stocks led the broader market higher: Tech-related mega cap stocks (Amazon, Alphabet, Apple, Meta, Microsoft, NVIDIA, and Tesla) rebounded and collectively returned +13.5% in May. After falling out of favor early in the year, the “Mag 7” stocks have now returned +29.5%, collectively, since the tariff pause on April 9th.

• Policy uncertainty weighed on health care stocks: The health care sector declined -5.6% and is one of the worst performing sectors in 2025 (-3.1%). UnitedHealth, the nation’s largest healthcare insurer, saw its stock drop -27% on a CEO departure and suspension of its 2025 financial guidance due to higher medical costs.

• Non-U.S. stocks continued to perform well: European stocks have returned +20.6% in 2025 as several countries focused on an economic revitalization due to policy uncertainty. German stocks (+31.3% YTD) led returns in the wake of a large economic stimulus plan. Even after its outperformance in 2025, the MSCI EAFE Index price-to-earnings ratio (16.2) remains at a deep discount to the S&P 500 (24.2)1.

Fixed Income

Bond returns were mixed as longer-term Treasury yields rose. 

The Federal Reserve held short-term rates steady in May and remained cautious due to the risks of higher unemployment and inflation. However, the 10-year Treasury yield rose +0.24% in May, which may be due to concerns around the U.S. budget deficit or easing trade tension which could result in stronger than expected economic growth.

• Longer-term rates rose more than short-term: Demand for government bonds was soft in May as Treasury auctions had low volume. This may be due to concerns about the U.S. fiscal outlook, as investors demand higher yields to compensate for rising credit risk.

• High yield (HY) bonds outperformed as investor risk appetite increased: Investors may believe the threat of tariffs to economic growth fell as HY bonds (rated BB and below) gained +1.7%. Further, HY bonds generally have lower duration than IG bonds and were therefore less sensitive to rising yields in May.

U.S. Debt Downgrade

Moody’s downgraded U.S. Treasury bonds due to a continued rise in U.S. government debt.

Moody’s is one of the primary ratings agencies that evaluates the credit worthiness of governments and corporations. On May 16th, Moody’s lowered its U.S. credit rating from Aaa to Aa1, joining Fitch Ratings and Standard and Poor’s (S&P) to downgrade U.S. debt from the top available rating (“triple A”)2. 

• Moody’s rating still represents a low default probability for the U.S.: The U.S. national debt is approaching $37 trillion and is expected to expand by nearly $2 trillion per year. Moody’s recognizes that the U.S. remains a dependable borrower but no longer believed it was worthy of the top rating.

• Fitch and S&P Global Ratings have both previously downgraded U.S. credit quality: S&P took similar action to downgrade U.S. debt in 2011, and Fitch lowered their U.S. credit rating in 2023. Each firm lowered their rating one notch below their top rating and cited similar reasons for the downgrade (fiscal challenges, a growing debt burden, and repeated debt limit standoffs).

• Stocks rebounded after prior downgrades: The S&P 500 declined -2.6% the week after the recent Moody’s downgrade. In similar fashion, stocks were negative the first week after the Fitch and S&P downgrades, but these losses ended up being short-lived. A resilient labor market, easing trade tensions, and solid quarter for corporate profits could be potential catalysts that lead stocks higher longer-term.

Tariffs 

Trade tensions eased in May as the U.S. and China agreed to lower tariffs for 90 days. 

Tariff rhetoric has driven market volatility in recent months. However, the rollback of tariffs with China and recent advancements with the European Union led to investor optimism in May. 

• The U.S. and China agreed to lower tariff levels for 90 days: The U.S. rate on Chinese imports was reduced from 145% to 30%, and Chinese levies on U.S. goods fell from 125% to 10%. The news provided hope of a potential trade deal between the #1 and #2 economies.

• Tariffs to remain in effect following court ruling: Several U.S. businesses filed petitions recently to halt tariffs. On May 28th, the U.S. Court of International Trade ruled President Trump exceeded his authority on many of the new tariffs levied on U.S. trading partners. However, the administration appealed, and a federal court temporarily reinstated tariffs the next day. The levies will remain in place while judges weigh the underlying legal justification.

• Tariffs were a source of market volatility during the first Trump administration: 2018 was a volatile period as the S&P 500 Index declined as much as -13.5% from its high and lost -4.4% for the year. However, the index rose sharply in 2019 (+31.5%) as trade deals were made and consumer spending remained steady. It is important to note tariffs are only one input into asset prices and equity markets have been resilient over longer time periods3

Economic Calendar

Consumer confidence jumped the most in four years on tariff pause. 

U.S. consumer confidence rebounded in May from a near five-year low with the improvement being broad-based across income and age ranges4. Individuals were more upbeat about the health of the labor market and business conditions, especially following the rollback of U.S.-China tariffs in mid-May. 

• New job growth exceeded expectations: +177k jobs were created in April, above the forecast (+133k), and the 12-month average (+152k). The unemployment rate was steady at 4.2%. A strong labor market could be the key to the U.S. avoiding an economic recession. A steady decline in new jobs or a rise in weekly jobless claims could be cause for concern.

• The Consumer Price Index (CPI) declined for the third consecutive month: Prices rose by +2.3% (annualized) in April, below the forecast (+2.4%) and lowest reading since February 2021. Prices declined for gasoline, groceries, and air fares. The upcoming May report will be heavily scrutinized as it is expected to capture the initial effect of new tariffs.

• The House passed the President’s new tax bill, which is now headed to the Senate: The bill would extend Trump’s first-term tax cuts, provide certain individuals with new tax relief, and incentivize small businesses to create jobs and expand operations. However, the bill is also expected to increase the U.S. debt burden, and some economists believe it has the potential to worsen economic inequality2.

Market Recap - Indices Lose Ground In Excitable Week

The major indices lost ground this week, rattled by rising long-term rates associated with deficit angst, and driven by consolidation interest after a huge run off the April 7 lows.

The week began in an excitable way, with Moody's downgrading the U.S. credit rating, and it ended in an excitable way, with President Trump noting Apple (AAPL) will face a tariff of at least 25% if the iPhones sold in the U.S. are not made in the U.S., and that he is recommending a straight 50% tariff for the EU, effective June 1, because "the trade talks are going nowhere."

Weekly Change:

• Dow Jones Industrial Average: -2.5%

• Nasdaq Composite: -2.5%

• S&P 500: -2.6%

• Russell 2000: -3.5%

• S&P Midcap 400: -3.6%

Market Recap - Trade War De-Escalation Fuels Winning Week

It was a winning week for stocks.

The S&P 500 and Dow Jones Industrial Average turned positive again for the year, sitting on a 1.3% and 0.3% gain, respectively in 2025 after this week's moves.

The market was enthused by a notable easing in the trade war with China. Both the U.S. and China agreed to a 90-day reduction in tariffs, which went into effect Wednesday. The U.S. dropped tariffs on China from 145% to 30% and China dropping tariffs on the U.S. from 125% to 10%.

The good news for the market is that the reductions were larger than expected. The less than good news for the market is that the reductions expire in 90 days if both sides can't reach a more permanent trade deal.

The market was focused on the positive takeaway, fueling an everything-rally. Moves were helped by short-covering activity and a fear of missing out on further gains.

Also, there was an emerging view that stocks were due for a period of consolidation after a big run since the April lows, but that didn't materialized in a meaningful way. The continued resilience acted as an additional upside catalyst for stocks.

The S&P 500 was down 17.8% for the year and down 21.4% from the all-time high it reached on February 19 at its April 7 low (4,835.04).

With Friday's close, the benchmark index is 23.2% higher than its April low and 3.2% below its all-time high.

Increased attention to mega caps and large-cap tech stocks had an outsized impact on the major equity indices. NVIDIA surged 16% and Apple was up 6.4% from last Friday.

On the flip side, UnitedHealth was a huge laggard, dropping 23.3%. It's one of the most influential names in the price-weighted Dow Jones Industrial Average, sinking following the news that CEO Andrew Witty is stepping down for personal reasons and that the company is suspending its 2025 outlook as it grapples with higher-than-expected medical costs.

Market participants were also weighing a big slate of economic news, including an April Consumer Price Index that lacked any tariff inflation shock, and a cool Producer Price Index report for April.

The calendar also included April reports for retail sales, and industrial production; weekly initial and continuing jobless claims; and May reports for the Philadelphia Fed Index, Empire State Manufacturing Survey, and NAHB Housing Market Index that, collectively, were mixed relative to expectations.

Treasury yields moved noticeably higher, but that didn't deter stocks. The 10-yr yield rose above 4.50% at its high this week before settling at 4.44%, which is six basis points higher than last Friday. The 2-yr yield jumped ten basis points from last week to 3.98%.

Market Recap - A Macro Focus

There wasn't a lot of change in the major indices this week, which continued in a consolidation pattern following the huge run off the April 7 lows.

A nine-session win streak for the S&P 500 was broken on Monday, serving as a precursor to a week where outsized moves were reserved for individual stocks with news, like Dow component Walt Disney, which impressed with Q1 results and better-than-expected guidance for the full year, and Alphabet, which struggled on concerns about AI challenges to its search business.

It was a huge week of earnings reporting, yet most of the market's concentration was on the macro picture that included the following highlights:

• OPEC+ agreeing to raise its production output in June by 411K barrels per day.

• The U.S. trade deficit hitting a record $140.5 billion, as imports surged in a tariff frontrunning move.

• India launching attacks on nine sites in Pakistan, and Pakistan vowing a response to those attacks.

• An indication that Treasury Secretary Bessent and U.S. Trade Representative Greer will meet China's Vice Premier He Lifeng in Switzerland this weekend with an aim of de-escalating the tariff/trade situation.

• The People's Bank of China lowering its 7-day reverse repurchase rate by 10 basis points to 1.40% and the required reserve ratio by 50 basis points to 9.00%.

• The FOMC voting to leave the target range for the fed funds rate unchanged at 4.25-4.50%, and Fed Chair Powell declaring that the Fed will be patient before making any policy moves as it needs to see more data to understand better how the new administration's policies are affecting economic activity.

• The Bank of England lowering its cash rate by 25 basis points to 4.25%, as expected.

• President Trump announcing the first trade deal with the UK, which will involve keeping the baseline 10% tariff rate; and noting that a number of other trade deals should be following soon.

• President Trump touting the reconciliation bill and suggesting one should buy stocks now.

The best-performing sectors this week were the industrials (+1.1%), consumer discretionary (+0.8%), and utilities (+0.5%) sectors. The worst-performing sectors were the health care (-4.3%), communication services (-2.4%), and consumer staples (-1.1%) sectors.

The 2-yr note yield increased four basis points on the week to 3.88%, while the 10-yr note yield added six basis points to 4.38%. The U.S. Dollar Index jumped 0.4% to 100.42, garnering some support from the market's expectations for the next rate cut getting pushed out to the July FOMC meeting.

• Dow Jones Industrial Average: -0.2% for the week / -3.0% YTD

• S&P 500: -0.5% for the week / -3.8% YTD

• S&P 400: +0.5% for the week / -5.6% YTD

• Nasdaq Composite: -0.3% for the week / -7.2% YTD

• Russell 2000: +0.1% for the week / -9.3% YTD

Market Recap - Another Winning Week as Earnings Roll In

The stock market had another winning week.

The S&P 500 closed 2.9% higher than last Friday, logging its ninth-straight win at the end of the week. The Nasdaq Composite was 3.4% higher than Friday's close and the Dow Jones Industrial Average registered a 3.0% gain. 

Factors contributing to the inclination to buy included:

• Optimism around the trade war situation after China suggested that it is leaving the door open for trade talks with the U.S.

• Positive responses to earnings from Microsoft, which increased 11.1% from last week, and Meta Platforms, which increased 9.1% from Friday

• Momentum after S&P 500 surpassed its 50-day moving average (5,582)

• Reacting to the March Personal Income and Spending Report, which showed a nice 0.7% jump in personal spending and unchanged readings for both the PCE and core-PCE Price Indexes on a month-over-month basis, and the April Employment Situation report, which showed a 177,000 increase in nonfarm payrolls and a 4.2% unemployment rate

• Apple was left out of the rally, dropping 1.9% this week following its earnings report and Amazon received a muted response to its earnings results, settling 0.5% higher than last week. 

The broad advance left ten of the 11 S&P 500 sectors higher. The technology (+4.0%), communication services (+4.2%), and industrial (+4.3%) sectors were the top performers. The energy sector was alone in the red by Friday, dropping 0.7%. 

There's still some headwinds in play, though. Some economic data is weakening, keeping fear about a recession part of the market narrative. 

The April Consumer Confidence Index slumped to 86.0 (Briefing.com consensus 88.3) from 93.9 in March, pulled down by the lowest reading for the Expectations Index (54.4) since October 2011; meanwhile, average 12-month inflation expectations jumped to 7.0% from 6.0%, hitting their highest level since November 2022.

Market participants were also digesting a relatively soft initial jobless claims number, along with another contractionary reading in the ISM Manufacturing Index in April (i.e., a reading below 50%), and a Q1 GDP report that triggered some stagflation worries with real GDP down 0.3% and the GDP Price Deflator up 3.7%.

Market Recap - S&P 500 Exits Correction Territory In Winning Week

The stock market had a strong showing this week.

The S&P 500 (+4.6%) exited correction territory, rising 10.9% from its low close in April 8 (4,982.77). The Nasdaq Composite jumped 6.7% this week and the Dow Jones Industrial Average registered a 2.5% gain. 

Things started relatively weak as stocks dropped on Monday in response to chatter that President Trump and his team are looking into whether the president can remove Fed Chair Powell, which fostered concerns about attacks on the Fed's independence. Also, China warned of retaliation against countries that curtail their trade with China because of U.S. pressure in trade negotiations.

The mood shifted later in the week when President Trump declared that he has no intention of firing Fed Chair Powell. He also indicated he won't play hardball with China in any negotiations and that China's tariff rate will come down substantially (but not to zero) if a deal can be reached

The upside bias was aided by short-covering activity and contrarian-minded buying interest driven by reports of a pervasive bearish mindset. Outsized gains in the mega cap space contributed to the overall performance. The Vanguard Mega Cap Growth ETF jumped 7.4%.

The outperformance of the mega caps was also reflected in S&P 500 sector performance. The technology sector bounced 7.9%, the consumer discretionary sector surged 7.4%, and the communication services sector rose 6.4%. 

The huge batch of earnings news this week was headlined by a few mega caps. Tesla saw an 18.1% increase after a dour Q1 earnings report that was tempered by Elon Musk indicating he will be curtailing his DOGE work. Alphabet shares jumped 6.8% after reporting earnings.

This week also featured pleasing price action in the Treasury market, providing added support to equities. The 10-yr yield was six basis points lower than last week at 4.27% and the 2-yr yield was four basis points lower than last week at 3.76%.

Market Recap - Tariff Headlines Remain Top of Mind

The stock market was mostly lower at the end of this turbulent week.

The market started the week strong amid relief that smartphones, laptops, semiconductors, solar cells, and other electronic items will be exempt from the 10% global tariffs and the 125% tariff rate on imports from China.

Enthusiasm was limited due to the understanding that imports from China are still subject to the 20% fentanyl-related tariff.

Other tariff-related headlines this week included:

• Section 232 investigations have been announced for semiconductor, semiconductor equipment, pharmaceuticals, and pharmaceutical ingredients, laying the groundwork for likely tariff increases

• Bloomberg reports that the EU and US have made little progress on trade talks and that the EU expects most tariffs to remain in place.

• Bloomberg reports that China has ordered airlines to stop taking Boeing (BA) deliveries.

• President Trump also suggested there may be tariff adjustments for the auto sector

In corporate news, NVIDIA announced that it expects Q1 results to include up to $5.5 billion of charges associated with H20 products due to export restrictions for China. AMD also announced an expected impact of $800 million.

UnitedHealth suffered a significant decline after reporting disappointing earnings and guidance. 

• Nasdaq Composite: -2.6% for the week / -15.7% YTD

• S&P 500: -1.5% for the week / -10.2% YTD

• Dow Jones Industrial Average: -2.7% for the week / -8.0% YTD

• S&P Midcap 400: +0.8% for the week / -12.7% YTD

• Russell 2000: +0.0% for the week / -15.7% YTD

Market Recap - The Pause That Refreshes

It was far from an ordinary, or boring, week on Wall Street. 

The trading action was frenetic, along with the tariff headlines, while the action across asset classes was confounding.

In a nutshell, stocks rallied, Treasuries languished, the dollar got pounded, and gold prices surged. It was all related to the tariff war that culminated with a stunning announcement by President Trump on Wednesday that he is pausing the reciprocal tariff for most countries, except China, for 90 days to allow time to negotiate new deals. In the meantime, a 10% baseline tariff rate will still apply for all countries.

As for China, the tariff sparring hit a fevered pitch this week. President Trump ramped up the tariff rate for imported Chinese goods to 145%. China came back on Friday and said it is implementing a 125% tariff rate on imported U.S. goods and will be ignoring any further tariff actions by the U.S. The respective tariff rates should effectively bring trade between the rivals to a standstill, which will have knock-on effects for supply chains and business inventories.

The latter point notwithstanding, the stock market was overjoyed Wednesday by the 90-day pause announcement and engineered a stunning relief rally that was exacerbated by short-covering activity. The S&P 500 logged a 9.5% gain, its third-largest single-day gain since World War II, while the Nasdaq Composite soared 12.2% for its biggest gain since 2001.

A sizable portion of those gains were given back in Thursday's session before some renewed buying interest helped cut the losses. The sticking point for many was the realization that a 90-day pause is still only a pause, and there is no certainty that a deal will be reached with all countries. Moreover, the baseline 10% tariff rate is still significantly higher than before, and the tariff rate for China is debilitating from a trade standpoint.

Other pressing issues included the losses in both the dollar and Treasuries, which were construed as an overarching sign of growth concerns, deficit concerns, and waning confidence/interest in U.S. assets on the part of foreign investors. The U.S. Dollar Index fell 3.1% this week to 99.78 and the 10-yr note yield jumped 48 basis points to 4.49% in spite of some otherwise friendly CPI and PPI reports for March.

The S&P 500, which saw a low of 4,835.04 on Monday, hit a high of 5,481.34 on Wednesday before settling the week at 5,363.36.

Nine of the 11 S&P 500 sectors scored gains this week, none bigger than the information technology sector (+9.7%). The two losers were energy (-0.4%) and real estate (-0.2%). The former was impacted by demand concerns, while the latter lagged on the spike in interest rates.

• Nasdaq Composite: +7.3% for the week / -13.4% YTD

• S&P 500: +5.7% for the week / -8.8% YTD

• Dow Jones Industrial Average: +5.0% for the week / -5.5% YTD

• S&P Midcap 400: +2.8% for the week / -12.8% YTD

• Russell 2000: +1.8% for the week / -16.6% YTD

Market Recap - Navigating Market Volatility – April 2025

Market Volatility – April 2025

New U.S. tariffs re-ignite stock market volatility. U.S. stock markets declined by –10.5% in total on Thursday and Friday in reaction to new U.S. tariffs that will impact trade with “virtually every country in the world”. The S&P 500 Index has now declined –17.3% since its all-time high of 6147 on February 19th. The volatility continued into Monday April 7th, with U.S. stocks declining as much as -5% in early trading.

The benefits of portfolio diversification have been evident during the selloff. While U.S. stocks have suffered in 2025, international stocks, bonds and some commodities have been more resilient, highlighting the value of diversification. 

We knew the tariffs were coming. Why is the stock market responding this way?

• Tariffs were larger than expected. A baseline tariff of 10% was enacted on foreign countries with a trade surplus with the U.S. Additional reciprocal tariffs, ranging from 11% to 50%, were levied on more than fifty countries that charge tariffs on U.S. imports. Reciprocal tariffs on some large U.S. trading partners include the Eurozone (20%), China (34%), Japan (24%), Vietnam (46%), and India (26%)1.

• Tariffs were not empty threats and appear to be a key piece of policy agenda. The tariffs that were forewarned were carried out, highlighting that they were not simply a negotiating tactic. Investors are now concerned tariffs could slow business spending and consumer demand, resulting in a period of slower economic growth and higher unemployment in the U.S. 

• Businesses and consumers may come under greater stress. The impact of recently enacted tariffs on U.S. corporations cannot be fully understood at this time. The uncertainty caused by new policies has caused analysts to reassess corporate earnings forecasts for 2025. Further, the short-term impact of tariffs on the price of goods and services for U.S. consumers is unknown.

How are tariffs affecting different asset classes, sectors, and regions?

• Growth and momentum-oriented stocks have underperformed. Areas of the market that performed well in 2024 have declined the most in 2025. While the S&P 500 has returned -13.4%, year-to-date, the “magnificent seven” stocks (Alphabet, Amazon, Apple, Meta, Microsoft, NVIDIA, and Tesla) collectively declined -24% over the same period. 

• Higher yielding defensive sectors have outperformed. Higher yielding sectors like consumer staples (+1.3%) and utilities (-0.8%) have provided investors with better protection during the selloff. The yield factor (-4.7%) has outperformed year-to-date as many investors have shifted to a more defensive posture.

• Foreign stocks decoupled from U.S. stocks. International developed market stocks (MSCI EAFE Index) returned +1.6% outperforming the S&P 500, which returned -13.4% year-to-date, driven by a more favorable central banking environment abroad.

• Bonds have benefited from flight to quality. The Bloomberg US Aggregate Bond Index returned +3.7% year-to-date, reflecting the safe-haven demand for fixed income instruments.

What positive events could bring stability to markets?

Although the situation currently looks dire, there are some key developments to watch for that may turn the tide for U.S. equity markets. Key events to monitor include:

• Progress with tariff negotiations. It will be important to monitor how countries respond to the tariffs and negotiate with the U.S. There could also be potential for foreign companies to work directly with the U.S. government on making U.S. investments to avoid tariffs. It was reported on Friday, April 4 that Vietnam has approach the U.S. about negotiating a tariff deal. 

• Continued stability in U.S. economic data. New jobs created in March (+228,000) increased more than the forecast (+140,000) and were above the +117,000 jobs created in February. Interest rates have also declined in recent days, which may help lower borrowing costs, including mortgage rates. 

• Possible action by the Federal Reserve (the Fed) to calm markets. The last time U.S. stocks declined more than 10% over two trading days was during the COVID stock market decline in March 2020. At that time, the Fed acted quickly to cut interest rates and implement quantitative easing to provide liquidity and support the economy. Should tariff based volatility continue, the Fed may be compelled to take action to backstop the U.S. capital markets.

What actions should I take during this heightened market volatility?

• Review asset allocations. Recheck portfolio asset allocation to ensure it is appropriately diversified and aligned with the investor’s age, risk tolerance, and financial goals. 

• Rely on professional asset management. Professional portfolio managers are equipped to navigate volatility, identify undervalued opportunities, and make tactical adjustments to mitigate downside risk.

• Maintain discipline and a long-term perspective. Market declines vary in magnitude and frequency, but they have been common throughout history and are generally temporary. Staying invested with a well-diversified portfolio is the key to success. A disciplined, diversified, and informed approach should help investors navigate current market conditions and position for future opportunities.

Market Recap - Rally then Retreat Amid Tariffs Fear, Inflation Worries

This week, U.S. equity markets faced significant volatility, culminating in notable losses across major indices. 

The S&P 500, which closed above its 200-day moving average early in the week, declined by 1.5%, the Dow Jones Industrial Average by 1%, and the Nasdaq Composite by 2.6%.

A convergence of rising inflation, declining consumer confidence, and trade policy uncertainties amplified market volatility.

The Consumer Confidence Index showed a fourth consecutive decline, and the Expectations Index fell to its lowest level (65.2) in 12 years, with worries about future employment prospects and inflation pacing that downturn. Inflation data this week corroborated the worries after February's core Personal Consumption Expenditures (PCE) price index, the Fed's preferred inflation read, rose by 0.4%, bringing the annual rate to 2.8%.

Also, the final March University of Michigan Index of Consumer Sentiment was marked down to 57.0 from the preliminary reading of 57.9. There was a large month-over-month drop in the Expectations Index, with consumers across all demographics and political affiliations expressing concerns about personal finances, business conditions, unemployment, and inflation.

Ongoing concerns about US trade policy also played a big role this week. President Trump announced a 25% tariff on all imported passenger vehicles starting April 3. He also said reciprocal tariffs will go on for all countries, but that the U.S. will be very lenient. 

Tech stocks led the retreat, but many names participated in this week's slide. The equal-weighted S&P 500 fell 1.2%. 

Four S&P 500 sectors registered gains while the remaining seven sectors logged declines ranging from 0.2% (financials) to 3.7% (technology). The risk-off bias this week led the consumer staples sector to log a 1.7% gain.