The S&P 500 snapped a four-week losing streak with a marginal gain on Friday, but market volatility remained elevated as investors navigated trade policy uncertainty and a Federal Reserve policy update.
At the close:
Dow Jones Industrial Average: +31 points (+0.1%)
S&P 500 Index: +0.04%
NASDAQ Composite: +0.5%
Key Market Drivers
1. Trump Signals Flexibility on Reciprocal Tariffs
President Donald Trump said Friday that his administration would show “flexibility” on reciprocal tariffs, which are set to take effect on April 2.
This follows weeks of uncertainty over U.S. trade policy, with shifting rhetoric from the White House causing investor unease. The decision by the European Union (EU) to delay retaliatory tariffs on U.S. whiskey has raised hopes that diplomatic talks may ease tensions between Washington and Brussels.
However, ongoing tariff uncertainty leaves markets vulnerable to further volatility.
2. Mixed Signals from the Federal Reserve
The Federal Reserve left interest rates unchanged this week, as widely expected. However, its updated economic projections sent mixed signals:
Maintained expectations of 50 basis points in rate cuts this year
Raised inflation forecasts, which could limit the Fed’s ability to cut rates
The Fed’s uncertainty over the inflationary impact of tariffs adds another layer of complexity to its decision-making. With inflation projected to stay above 2%, traders remain skeptical about how aggressively the Fed will ease policy in 2025.
3. FedEx Stock Plunges on Profit Warning
FedEx (NYSE:FDX) dropped over 6% after cutting its annual profit and revenue forecast. The company cited:
Weak U.S. industrial activity
Lower-than-expected demand for its services
FedEx’s warning highlights broader economic uncertainty and slowing corporate earnings growth, reinforcing concerns about the resilience of the U.S. economy.
Market Outlook: Monitoring Key Indicators
To track the market’s response to trade and Fed policy, investors should watch technical indicators such as:
Relative Strength Index (RSI): Identifying overbought/oversold conditions
Moving Averages (50-day & 200-day): Gauging market trends
Volatility Index (VIX): Measuring investor sentiment
For real-time market data, leverage FMP APIs: S&P 500 Historical Data API (Track index trends & price movements) Economic Calendar API (Stay updated on key economic events like Fed decisions & tariffs)
Final Thoughts
Despite snapping a losing streak, the S&P 500 remains in a fragile state, with trade uncertainties and Fed policy shifts keeping investors on edge. With April 2 tariff deadlines and earnings season approaching, volatility is likely to persist.
Key Watchpoints for Next Week:
Fed officials’ speeches & inflation data Updates on U.S.-EU trade negotiations Corporate earnings guidance (especially in the industrial & tech sectors)