A Volatile Week for U.S. Stocks Amid Escalating Trade Tensions

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Main Content:

1.    Major indexes weekly performance 

2.    U.S stocks weekly wrap 

3.    S&P 500 sector index weekly/month performance 

4.    China/Hong Kong stocks weekly wrap 

5.    Singapore stocks weekly wrap 

6.    Major indexes weekly chart and technical support & resistance levels

U.S.

For the week of Apr 11, U.S. stocks closed higher after a volatile week in which a slew of trade-related headlines continued to dominate investor sentiment. The week opened with equities sharply lower, extending losses from the prior week, as negative sentiment intensified ahead of Wednesday’s implementation of the Trump administration’s latest round of tariffs. However, on Wednesday, President Donald Trump announced that he was authorizing a 90-day pause on the higher reciprocal tariffs for most countries, effective immediately, to allow time for negotiations. The news sent stocks rocketing higher, with the Nasdaq Composite gaining over 12% and logging its second-best day on record. Refer to below major indexes performance table for the week.

Key highlights for the week and next:

1.    After flirting with a 20% decline from its peak on February 19, a threshold that separates bear from bull markets, the S&P 500(SPX) posted its third-largest daily gain since World War II. The rally followed a White House announcement of a 90-day pause on the newly proposed "reciprocal" tariffs for those countries that did not retaliate to the April 2 announcement. 

2.    The tariff rate now moves lower to 10%, except for China, whose tariff rate was increased to 145%. In response, China raised its tariffs on U.S. imports to 125% 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.

3.    Compared with the April 2 tariffs, the 10% universal baseline rate now looks moderate and manageable for the economy. However, the big jump in levies for China, the U.S.'s biggest source of imports, suggests that the average tariff rate is still poised to jump to about 20% – 25% from 2.3% in 2024. 

4.    The March CPI offered some encouraging news for policymakers. Inflation unexpectedly cooled, as core CPI dropped to 2.8% from 3.1%, the slowest since March of 2021 when inflation first started surging. 

5.    Volatility near historic extremes, with more room to fall than rise. The volatility index (VIX), also known as the fear index, has spiked to the highest since the early days of the 2020 pandemic. The index has been that high only eight times in the past 35 years. what history shows is once the VIX index has exceeded 43 (it reached a high of 52 on 4/8/25), forward six- and 12-month equity-market returns have been strong. That is not because volatility itself is good, but because spikes in volatility tend to occur when pessimism is already priced in. 

6.    Consumer sentiment lowest in nearly three years. The University of Michigan reported that its Index of Consumer Sentiment’s year-ahead inflation expectations surged to 6.7% in April, the highest level since 1981. The overall index reading declined for the fourth straight month to 50.8, down 11% from March and the lowest level since June 2022. 

7.    Treasury yields surge on trade war concerns. The yield on the benchmark 10-year Treasury note rose to well over 4.5% by Friday morning after ending the prior week under 4%.

SPX sectors in play

10 out of the 11 SPX sectors recorded weekly gains. Technology(XLK), Financials(XLF) were among top gainers this week, while Energy(XLE) and small Real Estate(XLRE) sector lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

On Wednesday Apr 9, the SPX index had an intraday high-low range of 532.91 points and closed 9.5% higher, in just one day! Watch out its high-low range 4948-5480 for further market direction going forward. Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

China stock markets recorded a weekly loss, but declines were tempered by hopes that the spiraling trade war with the U.S. would lead Beijing to roll out fresh stimulus that would boost the economy. The Shanghai Composite Index(SSE) fell 3.11% while the blue chip CSI 300 was down 2.87%. In Hong Kong, the benchmark Hang Seng Index slumped 8.47%. (refer to the above weekly performance table). Both the CSI 300 and Shanghai Composite indices advanced for four straight trading days ended Friday following reports that top government leaders met Thursday to discuss additional stimulus to counter higher U.S. tariffs.

Key highlights for the week and outlook for China/HK:

1.    On Friday, China raised tariffs on U.S. goods to 125% from 84% starting April 12, a day after the Trump administration clarified that the total tariffs on China reached 145%. However, Beijing called the U.S.’s latest increase a “joke” and appeared to rule out any more increases on its part. “The U.S.’s repeated imposition of abnormally high tariffs on China has become a numbers game, which has no practical economic significance,” a Ministry of Commerce spokesperson said in comments posted on its site. “If the U.S. continues to play the numbers game of tariffs, China will ignore it.” 

2.    U.S. levies may reduce China’s gross domestic product between 1% and 2% this year, a forecast by economists that predated the past week’s tariff escalation. Regardless of the magnitude of headline tariff increases, economists think that Beijing has the capacity to offset their impact through more fiscal stimulus. Given that China’s economy has been deleveraging for the past several years in the aftermath of a nationwide property bubble, policymakers have more room to maneuver. Moreover, China’s leaders have clearly signaled their intention to boost domestic consumption, a trend that is expected to continue.

Refer to below .HSI stocks top 40 performance of the week.

Click below SSE and .HSI indexes for their weekly charts. 

SSE weekly chart

.HSI weekly chart

Singapore

The Straits Times Index (STI) slumped 8.19% to close at 3512.53 this week, the index gave back all its yearly gain and losing 7.26% YTD at end of the week. A massive selloff intr-week that hit lowest since last Aug, before recouping some losses by Friday. The decline was led by banks and few large caps. Despite the weekly decline, certain sectors, such as hospitality and banking, showed resilience, with companies like ST Engineering, Sembcorp Ind, SGX, SingTel remain in strong uptrending.

Refer to below STI stocks top 40 performance of the week.

Click below for STI weekly chart.

STI weekly chart

Source: Some contents and data excerpted from various public market reports. Please comment to claim copyright ownership of any material, and I will remove it if necessary.