The Week on Wall Street
Stocks moved lower last week as investors swung from exuberance to disappointment on news over tariffs and inflation.
The Standard & Poor’s 500 Index fell 1.53 percent, while the Nasdaq Composite Index retreated 2.59 percent. The Dow Jones Industrial Average slid 0.96 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, declined 1.29 percent.1,2
An Up and Down Week
Stocks started the week with a sharp rally after the White House said it may “give a lot of countries breaks” on reciprocal tariffs. The positive momentum continued into Tuesday, with the Nasdaq and S&P 500 outpacing the Dow.3
Then, midweek, news that the White House was planning additional tariffs on all cars made outside the U.S. rattled markets.4,5
On Friday, investors reacted to a warmer-than-expected inflation report and lower consumer sentiment, putting further pressure on stocks as the week closed.6
Noise vs Signal
There can be a lot of noise in the market from time to time. This can make it hard for investors to interpret information as they search for the actual signal.
Last week, investors were trying to interpret the White House decision to impose tariffs on all cars and some car parts made outside of the U.S. While some automakers are domestic and others are foreign-based, the question is whether companies will absorb the additional costs, pass them on to consumers, or look to build factories in the United States.7
Separating the noise from the signal may take time, which can be more challenging when the markets react to new tariff updates as they are announced.
Weekly Riddle
It can only be broken with force, yet it can be dulled by contact with a piece of paper. What is it?
Last week’s riddle: Out of the 100 years in the 20th century, there is only one that reads the same upside down as it does right side up. What year is it?
Answer: 1961.
John Dombroski Jr. may be reached at (480) 991-1055
or [email protected] www.grandcanyonplanning.com
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