This week, U.S. markets will be closely watching President Donald Trump’s evolving tariff policies, as his trade pronouncements have fueled widespread uncertainty among investors. With crucial economic data due soon and a high-stakes House vote to avert a federal government shutdown, the coming days promise to be eventful.
1. Tariffs in Focus
Trump’s trade policies are once again under scrutiny. His near-daily announcements and reversals have contributed to market volatility, with the S&P 500 slumping to its worst week in half a year and the tech-heavy Nasdaq Composite sliding into correction territory.
Recent Moves:Last week, Trump temporarily delayed 25% tariffs on most goods from traditional trading partners Canada and Mexico until April 2, covering products included in a previous trade deal. However, he remains firm on his tariff stance, particularly on Chinese goods, where recent increases have prompted retaliatory measures.
Market Reaction:Analysts at ING lament that the “on-and-off nature of Canadian/Mexican tariffs shows that predicting trade policy is fast becoming a fool’s game.” These constant policy shifts are clouding the outlook for inflation and growth, raising fresh fears of an economic slowdown.
2. U.S. Economic Data Release
Investors are eagerly awaiting the all-important Consumer Price Index (CPI) for February, which will offer an updated view of U.S. inflation—the first full month of Trump’s current administration.
CPI Expectations:Early forecasts suggest that the headline CPI may cool to 2.9% year-over-year, compared to 3.0% previously, with a slight month-on-month easing. This data is critical as it will be one of the last indicators available before the Federal Reserve’s policy meeting on March 18-19.
Additional Indicators:Other key reports include the Job Openings and Labor Turnover Survey (JOLTS) and a forward-looking University of Michigan consumer sentiment survey, both of which will shed further light on the economic landscape.
For real-time updates on these data releases and other earnings-related events, investors can utilize the Earnings Calendar API.
3. Government Shutdown Risk
House Republicans are set to vote on a temporary funding bill designed to keep the federal government open through September 30.
Key Features of the Bill:The proposal includes $13 billion in cuts to nondefense discretionary spending, a $6 billion increase in defense expenditures, and enhanced funding for border security.
Political Dynamics:Despite expected opposition from Democrats—who view the deep cuts and expanded presidential control over spending as problematic—Republican leaders are confident in securing unanimous party support. However, Senate approval will require at least 60 votes, likely necessitating bipartisan backing to prevent a shutdown.
4. Bank of Canada Rate Decision
The Bank of Canada is anticipated to lower its borrowing costs by a quarter-point to 2.75% from 3.00% following U.S. tariff actions against Canada.
Focus on Forward Guidance:The decision will be closely monitored for any signals on how Trump’s trade policies might influence Canada’s economic outlook.
5. Earnings Ahead
A raft of quarterly earnings from key tech players is scheduled for release this week, with Oracle (NYSE:ORCL) set to report after market close.
Broader Implications:Trump recently announced that Oracle, in partnership with ChatGPT-maker OpenAI and Japan’s SoftBank (TYO:9984), will invest $500 billion in AI infrastructure via the Stargate joint venture.
Other Tech Reports:Upcoming earnings from Adobe (NASDAQ:ADBE) and DocuSign (NASDAQ:DOCU), along with insights from retailers such as Dick’s Sporting Goods (NYSE:DKS) and Kohl’s (NYSE:KSS), will provide further clues about the state of the U.S. consumer market.
Investors can also gain additional perspective on how various industries are performing amid these uncertainties by referring to the Industry Classification API.
As policymakers grapple with trade policy and fiscal challenges, market participants will be watching closely for clues on the future direction of U.S. economic growth. With a mix of tariff uncertainty, crucial economic data releases, and legislative battles over government funding, this week promises to be pivotal for both investor sentiment and market performance. Stay tuned for further updates as these developments unfold.
