S&P 500: Bank Earnings and CPI in Focus After Market’s Worst Week Since 2020

Markets Suffer Steepest Weekly Losses Since 2020 as Tariffs Trigger Broad Selloff

Stocks plunged last week, posting their worst performance in over four years, as traders reacted to the Trump administration’s sweeping tariff announcement and China’s aggressive retaliation. Fears of a trade-induced recession drove major benchmarks sharply lower, triggering a spike in volatility and a broad-based selloff across all sectors.

The S&P 500 dropped 9.08%, the Nasdaq tumbled 10.02%, and the Dow Jones Industrial Average lost 3,269 points, or nearly 10%. The Russell 2000 fell into bear market territory with an 18.08% year-to-date decline, underscoring the risk-off sentiment dominating the market.

Why Did Stocks Break Down So Hard?

Markets unraveled after Trump declared April 2 “liberation day” and announced reciprocal tariffs, including a 34% levy on imports from China, Vietnam, Taiwan, and Thailand. China responded in kind, escalating the trade standoff and amplifying fears of global economic fallout. The S&P 500’s 6% decline on Friday reflected full-blown capitulation.

Investor anxiety surged, with the Cboe Volatility Index spiking 51% to 45.31, its highest level of the year. Selling pressure was relentless, with 95% of US-listed stocks ending the week in the red.

Which Sectors and Stocks Took the Biggest Hit?

Energy and technology led declines, down 14.64% and 11.46% respectively. Small- and mid-cap stocks bore the brunt, shedding 9.39% and 8.95%. Value stocks held up better than growth, though both faced heavy losses.

Among individual names, Restoration Hardware collapsed 38.5%, followed by Sabre (-29.9%), Capri Holdings (-28.5%), Celanese (-28.4%), and Micron (-26.8%).

The few standouts included Rocket Companies (+18.5%)  and Sunrun (+17.7%), which rallied despite the broader carnage.

Economic Data Underscores Tariff Toll

The March ISM Manufacturing PMI slipped back into contraction at 47.8, with new orders weakening and prices rising sharply due to tariff-related costs. Services remained barely in expansion at 50.8. Fed Chair Jerome Powell acknowledged “higher inflation and slower growth” as probable outcomes but emphasized that the full effects remain uncertain.

Meanwhile, nonfarm payrolls rose by 228,000 in March, beating expectations. Still, the unemployment rate ticked up to 4.2%, and strong job growth failed to calm investor nerves.

Where Are Yields and Commodities Headed?

Treasury yields dropped sharply on safe-haven demand, with the 10-year yield falling below 4% for the first time since October. The two-year yield fell to 3.68%. WTI crude declined over 9% to $62.61, while gold eased 1.8% to $3,035.

What Should Traders Watch Next Week?

Markets will be laser-focused on Thursday’s Consumer Price Index and Friday’s Producer Price Index reports, which could heavily influence Fed rate expectations. Key earnings from JPMorgan, Wells Fargo, and BlackRock will also test sentiment.

With trade tensions escalating and monetary policy uncertainty growing, downside risks remain high. Unless tariff threats de-escalate, markets could continue probing for a bottom.

More Information in our Economic Calendar.