Markets Mixed Amid Tariff Relief and Fed Uncertainty

The Major Markets closed the Good Friday holiday shortened trading week mixed, but with losses in the domestic market. For the S&P 500, this stands as the 11th week of losses this year.

The week began promisingly with an 80-basis point gain on Monday. The market was buoyed with news released the prior weekend that a number of items classified under the Harmonized Tariff Schedule of the United States (HTSUS) would be exempt from the earlier 10% global tariffs and the 145% tariff rate from China.

The positive sentiment was short-lived as selling pressure reemerged Tuesday and Wednesday, closing lower. Wednesday was marked by a speech by Fed Chair Jerome Powell at the Economic Club of Chicago. After his opening remarks, Powell was asked about a number of topics including tariffs, interest rates, employment, as well as the recent market volatility. One question that jumped out was about the idea of the Fed serving as some sort of backstop to the markets with the following question and answer:

Raghuram Rajan:
Well, let me turn to financial markets. We’ve seen some volatility, especially stock market volatility. I mean the levels of the VIX are up to the levels they were in the early days of the pandemic, coming off somewhat now. Some people believe the Fed will intervene if the stock market plummets. The so-called Fed put. 
Are they correct?

Jerome Powell:
I’m going to say no with an explanation. So what I think is going on in markets is markets are processing what’s going on and it’s really the policies, particularly the trade policy. And really the question is, where’s that going to come in? Where’s that going to land? And we don’t know that yet. And until we know that, you can’t really make informed assessments. That would still be highly uncertain, once you know what the policies are, it’ll still be highly uncertain what the economic effects will be. So markets are struggling with a lot of uncertainty and that means volatility.

 

Major Markets		YTD as of 04/18/2025
	Nasdaq
	Dow Jones Industrial
	S&P 500
	MSCI World
	MSCI EM
	Russell 2000
	Bar US Agg Bnd

S&P Sectors		YTD as of 04/18/2025
	Comm. Services
	Cons. Discretionary
	Cons. Staples
	Energy
	Financials
	Health Care
	Industrials
	Info. Technology
	Materials
	Real Estate
	Utilities
		Agent/Broker Dealer Use Only

As highlighted previously, the VIX spiked to a closing high of 52 the week prior. This stands as the highest level for the volatility index since April 1 of 2020 in the midst of the Covid pandemic.
Given the drastic action that the government took during that period of time, it’s not surprising that some might ask what the Fed or other government agencies might do in response to this market downturn. However, it appears that the Fed and the Trump administration will hold the current course for the time being until a more finalized plan around tariff rates is reached.

https://content.govdelivery.com/accounts/USDHSCBP/bulletins/3db9e55

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