Market Update—Week of May 27, 2025

Posted on May 28, 2025 by George Gallagher

Presented by Mark Gallagher

Strong earnings and hiring data helped ease concerns around softening consumer sentiment last week. In a notable development, China granted tariff exemptions on roughly $40 billion in U.S. goods—an encouraging sign for trade stability. The S&P 500 posted gains, marking its third positive week in the past four.

Quick Hits

Beyond the headlines: What could the “big, beautiful bill” mean for markets?
Report releases: New home sales increased meaningfully in April.
Financial market data: U.S. equities moved lower as investors digested concerns over U.S. government deficit spending.
Looking ahead: The focus this week will be on durable goods orders, Fed policy, consumer confidence, and personal spending.

Keep reading for an in-depth look.

Beyond the Headlines: What Could the “Big, Beautiful Bill” Mean for Markets?

Last week, the House of Representatives narrowly passed President Trump’s “big, beautiful bill,” a sweeping tax and spending proposal that is the centerpiece of his second-term economic agenda. Although it still faces debate in the Senate, the bill outlines major shifts in tax policy, federal spending, and regulation that could shape financial markets in the months and years ahead.

Here’s what investors should know:

Key Features of the Bill

Tax Cuts Extended and Expanded

Makes the Tax Cuts and Jobs Act permanent, including lower individual and corporate tax rates
Raises the standard deduction $1,000 for individuals and $2,000 for joint filers through 2028
Temporarily increases the child tax credit to $2,500 per child
Increases the SALT deduction cap to $40,000 for households earning less than $500,000
Introduces tax exemptions for tips, overtime, and interest on auto loans for U.S.-made vehicles

Spending Reductions and Work Requirements

Adds work requirements for Medicaid and SNAP recipients, which may reduce enrollment
Restricts Medicaid coverage for certain services

Border Security and Immigration

Allocates $70 billion for border enforcement, including more than $46 billion for wall construction
Implements a 3.5 percent remittance tax on money sent abroad by noncitizens

Education and Energy Provisions

Expands Pell Grants for vocational training
Ends subsidized federal student loans
Accelerates the phaseout of clean energy tax credits, ending them by 2025

Potential Market and Sector Impacts

Certain sectors may benefit if the bill becomes law:

U.S. automakers may gain from income tax breaks and auto loan incentives.
Defense and construction firms could benefit from increased border spending.
Traditional energy firms may gain an edge as clean energy subsidies are rolled back.
For-profit and trade schools could expand under new grant access, potentially easing service inflation and labor shortages.

Fiscal Concerns and Investor Implications

Initial estimates show that the bill, in its current form, could increase the deficit. Given the recent Moody’s Ratings downgrade of U.S. sovereign credit and a weak 35-year Japanese government bond auction, markets are showing signs of stress around long-term debt sustainability. Yields crept higher in May, possibly reflecting concern about the bill’s impact. If the bill is enacted without offsets, it could prompt further scrutiny from credit agencies. In addition, a rising deficit may limit fiscal flexibility during downturns or emergencies.

Although the “big, beautiful bill” presents opportunities for select industries, it raises important questions about long-term fiscal risks. As the Senate weighs the legislation, investors should watch for revisions that could affect sectors, taxes, and interest rates.

If you’d like to discuss how these developments may affect your financial plan or portfolio strategy, we’re here to help.

Report Releases—May 19–23, 2025

Existing Home Sales: April (Tuesday)
Existing home sales continued to cool and mortgage rates continued to rise, along with the 10-year U.S. Treasury yield and credit spreads.

Expected/prior month existing home sales monthly change: +2.0%/–5.9%
Actual existing home sales monthly change: –0.5%

Preliminary S&P Global US Composite PMI: May (Thursday)
The S&P Composite PMI rose from 50.6 to 52.1. Services and manufacturing saw improvements, with the latter moving out of contractionary territory.

Expected/prior month S&P services PMI: 50.6/50.8
Actual S&P services PMI: 52.3
Expected/prior month S&P manufacturing PMI: 50.2/49.8
Actual S&P manufacturing PMI: 52.3

FOMC Member Commentary: (All-Week)
Last week, Fed officials emphasized caution amid economic uncertainty. Chair Jerome Powell defended Fed independence, and board member Philip Jefferson noted fiscal concerns post-downgrade. Other members highlighted financial stability, trade risks, and credit access. Overall, the tone was measured, with no indication of imminent rate changes.

New Home Sales: April (Friday)
Consumer new home sales rose at the highest level since February 2022 as builders increased incentives.

Expected/prior month new home sales: –0%/+2.6%
Actual new home sales: +10.9%

The Takeaway

Home sales were mixed; new home sales rose sharply but existing home sales continued to slow.
Purchasing manager confidence rose in the services and manufacturing segments of the economy.

Financial Market Data

Equity

Index	Week-to-Date	Month-to-Date	Year-to-Date	12-Month
S&P 500	–2.58%	4.32%	–0.82%	11.62%
Nasdaq Composite	–2.45%	7.48%	–2.70%	12.77%
DJIA	–2.43%	2.45%	–1.56%	8.39%
MSCI EAFE	1.33%	4.87%	16.28%	12.69%
MSCI Emerging Markets	–0.06%	5.40%	10.08%	10.47%
Russell 2000	–3.45%	3.96%	–8.07%	0.93%

Source: Bloomberg, as of May 23, 2025

U.S. equities declined as investors digested the credit downgrade by Moody’s Ratings, a weak 20-year Treasury auction, and renewed deficit concerns tied to the “big, beautiful bill.” Trade tensions resurfaced after President Trump threatened a 50 percent tariff on EU imports, pressuring multinational stocks. Technology, consumer discretionary, and financials underperformed, whereas utilities, health care, and industrials led on defensive rotation. Gold rallied 5.6 percent due to its perception of being a safe-haven asset, long-dated Treasury yields rose, and the dollar weakened. Retail earnings were mixed, with strength from software firms offset by earnings misses and a cautious outlook.

Fixed Income

Index	Month-to-Date	Year-to-Date	12-Month
U.S. Broad Market	–1.09%	1.56%	4.58%
U.S. Treasury	–1.18%	1.73%	4.27%
U.S. Mortgages	–1.31%	1.48%	4.93%
Municipal Bond	0.66%	–1.24%	1.29%

Source: Bloomberg, as of May 23, 2025

Although Treasury yields were relatively stable through the short-to-intermediate part of the curve, long-term yields rose as questions about the U.S. deficit led to concern over the long-term inflation outlook after the “big, beautiful bill” narrowly passed the House of Representatives. The 10-year and 30-year Treasury yields rose 7 basis points (bps) and 13 bps, respectively, closing at 4.51 percent and 5.03 percent, respectively.

The Takeaway

S. equities declined as investors digested the Moody’s Ratings downgrade and the proposed “big, beautiful bill.”
The long end of the Treasury yield curve rose amid questions over long-term inflation.

Looking Ahead

Economic data will be light in this holiday-shortened week. The focus will be on durable goods orders, Fed minutes, consumer confidence, and personal spending.

The week kicks off Tuesday with durable goods orders for April and the Conference Board Consumer Confidence Index for May. Durable goods orders are expected to fall notably after surging in March, when buyers attempted to front-run tariffs. Consumer confidence is expected to show a modest gain after multiple periods of significant deterioration.
On Wednesday, minutes from the May Federal Open Market Committee (FOMC) meeting will be released. Investors will try to interpret the language to understand the trajectory of the Fed’s path.
Finally, on Friday, we will see the report on personal income and personal spending for April. Both are expected to grow at a slower pace while remaining in positive territory.

Disclosures: This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. All indices are unmanaged and are not available for direct investment by the public. Past performance is not indicative of future results. The S&P 500 is based on the average performance of the 500 industrial stocks monitored by Standard & Poor’s. The Nasdaq Composite Index measures the performance of all issues listed in the Nasdaq Stock Market, except for rights, warrants, units, and convertible debentures. The Dow Jones Industrial Average is computed by summing the prices of the stocks of 30 large companies and then dividing that total by an adjusted value, one which has been adjusted over the years to account for the effects of stock splits on the prices of the 30 companies. Dividends are reinvested to reflect the actual performance of the underlying securities. The MSCI EAFE Index is a float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a market capitalization-weighted index composed of companies representative of the market structure of 26 emerging market countries in Europe, Latin America, and the Pacific Basin. The Russell 2000^® Index measures the performance of the 2,000 smallest companies in the Russell 3000^® Index. The Bloomberg US Aggregate Bond Index is an unmanaged market value-weighted performance benchmark for investment-grade fixed-rate debt issues, including government, corporate, asset-backed, and mortgage-backed securities with maturities of at least one year. The U.S. Treasury Index is based on the auctions of U.S. Treasury bills, or on the U.S. Treasury’s daily yield curve. The Bloomberg US Mortgage Backed Securities (MBS) Index is an unmanaged market value-weighted index of 15- and 30-year fixed-rate securities backed by mortgage pools of the Government National Mortgage Association (GNMA), Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (FHLMC), and balloon mortgages with fixed-rate coupons. The Bloomberg US Municipal Index includes investment-grade, tax-exempt, and fixed-rate bonds with long-term maturities (greater than 2 years) selected from issues larger than $50 million. One basis point is equal to 1/100th of 1 percent, or 0.01 percent. One basis point (bp) is equal to 1/100th of 1 percent, or 0.01 percent.

Authored by the Investment Research team at Commonwealth Financial Network^®.

Market Update—Week of August 25, 2025

Posted on May 28, 2025 by George Gallagher

Presented by Mark Gallagher

Quick Hits

Beyond the headlines: A cautious pivot by the Fed and tariff pressures raised opportunities and risks for investors.
Report releases: Existing home sales unexpectedly rose in July.
Financial market data: Small-caps, value, and cyclicals outperformed but big tech lagged. Powell’s dovish tone lifted sentiment.
Looking ahead: The focus this week will be on housing, consumer confidence, durable goods, and spending data.

Keep reading for an in-depth look.

Beyond the Headlines: A Cautious Pivot by the Fed and Tariff Pressures Raise Opportunities and Risks for Investors

The Fed’s annual gathering in Jackson Hole, Wyoming, offered important clarity on how policymakers are weighing the economy’s crosscurrents. Powell acknowledged that though inflation has eased from post-pandemic highs, it remains above the central bank’s 2 percent target, with tariffs clearly adding upward pressure on the price of goods. The labor market, though still near full employment, has slowed markedly, with job creation and labor force growth weakening. This unusual “two-sided” balance leaves the Fed confronting rising downside risks to employment even as tariff-related inflation risks linger.

Powell emphasized that monetary policy is closer to neutral than it was one year ago, suggesting that the restrictive stance may no longer be necessary if growth continues to soften. Although he stopped short of committing to imminent cuts, his message was clear: the Fed is prepared to adjust policy if inflation proves transitory and labor conditions deteriorate further. Importantly, the Fed also released a revised “Statement on Longer Run Goals and Monetary Policy Strategy,” signaling a return to traditional flexible inflation targeting at 2 percent and dropping its previous “average inflation targeting” language. This shift reflects lessons from the post-2020 experience, when inflation overshot sharply and communication around intentional overshoots created confusion.

Interest Rate Cuts Are Firmly on the Table

For investors, the policy backdrop is shifting from one in which inflation control dominates to one in which downside growth risks carry more weight. Interest rate cuts are now firmly on the table, though their timing hinges on incoming data. That creates a more supportive near-term environment for risk assets, but also one in which volatility could increase if inflation pressures from tariffs are more persistent than expected.

A Fed tilt toward easing typically benefits cyclical and rate-sensitive sectors, such as financials, industrials, and housing. Small-cap and value segments, which had already begun to outperform this summer, may continue to receive tailwinds if borrowing costs decline. At the same time, richly valued growth and technology stocks remain vulnerable to renewed inflation pressures or policy missteps, particularly given investor sensitivity to high multiples. Corporate earnings resilience—especially in consumer-oriented areas—has provided support, but margin risks tied to tariffs warrant close attention.

Short-term Treasury yields eased after Powell’s remarks, with the curve steepening as short-end yields fell on rising rate cut expectations. If cuts materialize, extending duration could offer capital appreciation potential, though heavy Treasury issuance and tariff-linked inflation risks may keep longer yields sticky. Credit markets remain well supported, but spreads near historical highs suggest limited room for error if growth slows sharply.

Diversified Approach Remains Prudent

For clients, Powell’s Jackson Hole speech underscores the need for balance. Although the Fed is pivoting toward greater flexibility, uncertainty around tariffs, labor supply, and inflation expectations will keep markets sensitive to data. A diversified approach across styles, sectors, and asset classes remains prudent. Rate-sensitive exposures may benefit from an easing path, but portfolios should also maintain protection against inflation surprises and growth disappointments. In short, the central bank is signaling readiness to act, but investors should prepare for a market environment in which upside opportunities and downside risks are elevated.

Report Releases—August 18–22, 2025

National Association of Home Builders (NAHB) Housing Market Index: August (Monday)

Home builder confidence fell slightly more than expected.

Expected/prior month NAHB Housing Market Index: 34/33
Actual NAHB Housing Market Index: 32

Housing Starts and Building Permits: July (Tuesday)

Housing starts and building permits were mixed; starts continued to rise but permits fell more than expected.

Expected/prior month housing starts monthly change: –1.8%/+5.9%
Actual housing starts monthly change: +5.2%
Expected/prior month building permits monthly change: –0.1%/–0.5%
Actual building permits monthly change: –2.8%

Federal Open Market Committee (FOMC) Meeting Minutes: July (Wednesday)

FOMC meeting minutes showed that growth slowed in the first half of the year as tariffs added upward pressure on inflation. The labor market remained solid, and policymakers left rates unchanged amid elevated uncertainty.

Existing Home Sales: July (Thursday)
The pace of existing home sales unexpectedly rose.

Expected/prior month existing home sales monthly change: –0.3%/–2.7%
Actual existing home sales monthly change: +2.0%

The Takeaway

Home builder sentiment slipped more than expected in August. Housing starts in July rose 5.2 percent, even as building permits declined 2.8 percent.
FOMC meeting minutes signaled slower first-half growth and tariff-driven inflation pressures. Existing home sales surprised to the upside in July, gaining 2 percent.

Financial Market Data

Equity

Index	Week-to-Date	Month-to-Date	Year-to-Date	12-Month
S&P 500	0.30%	2.11%	10.87%	17.61%
Nasdaq Composite	–0.55%	1.84%	11.83%	22.89%
DJIA	1.59%	3.54%	8.42%	14.04%
MSCI EAFE	0.85%	5.80%	25.15%	18.12%
MSCI Emerging Markets	–0.40%	2.09%	20.33%	18.25%
Russell 2000	3.32%	6.91%	6.81%	11.35%

Source: Bloomberg, as of August 22, 2025

Equities were mixed. Small-caps and value stocks led, with strong gains in banks, energy, machinery, and home builders; most-shorted names and retail favorites also rallied. Big technology dragged, with Meta Platforms and Microsoft underperforming, along with weakness in tech hardware, software, and discounters. Retail earnings highlighted consumer resilience, but concerns around AI valuations, inflation, and policy uncertainty weighed on sentiment until Powell’s dovish comments sparked a late-week rebound. Overall, breadth improved, outside of tech, with cyclical and rate-sensitive groups outperforming, leaving the broader equity tone constructive heading into next month’s Fed meeting.

Fixed Income

Index	Month-to-Date	Year-to-Date	12-Month
U.S. Broad Market	1.06%	4.82%	2.86%
U.S. Treasury	0.86%	4.28%	2.06%
U.S. Mortgages	1.18%	5.15%	3.00%
Municipal Bond	1.10%	0.06%	–0.10%

Source: Bloomberg, as of August 22, 2025

U.S. Treasuries firmed. The 2-year yield dipped 7 basis points (bps) and the long bond went below 4.9 percent as the curve steepened on dovish Powell remarks that solidified expectations for a September rate cut. Earlier weakness stemmed from hotter inflation data and cautious labor indicators, whereas hawkish Fed speak briefly tempered easing bets. Credit markets were stable; spreads held near cycle highs despite ongoing concerns around stagflation risks, fiscal dominance, and geopolitical uncertainty. Global bonds remained soft—notably Japanese Government Bonds (JGBs)—though U.S. markets staged a late-week rally that reinforced conviction in a more aggressive rate-easing path by the Fed into year-end.

The Takeaway

Equities were mixed; small-caps, value, banks, energy, and home builders outperformed, whereas big tech lagged. Sentiment improved later in the week after Powell’s dovish remarks.
Treasuries rallied, with the 2-year down 7 bps and the yield curve steepening, as Powell’s comments solidified September rate cut expectations despite earlier inflation and labor concerns.

Looking Ahead

This week, the calendar focuses on consumer and household trends, with data spanning housing, confidence, and spending. Markets will parse results for signs of resilience in demand and potential implications for monetary policy.

The week kicks off on Monday with new home sales data for July; sales are expected to rise modestly to 632,000.
On Tuesday, preliminary July durable goods orders are expected to decline and August consumer confidence is projected to soften.
Finally, on Thursday, personal income and spending for July are expected to post modest gains.

Authored by the Investment Research team at Commonwealth Financial Network^®.

Market Update—Week of May 5th

Posted on May 7, 2025 by George Gallagher

Presented by Mark Gallagher

Quick Hits

Beyond the headlines: Resilient earnings and hiring offered optimism amid worries.
Report releases: Consumer confidence fell in April despite better-than-expected personal spending and jobs reports for March.
Financial market data: Technology and consumer discretionary firms rallied on hints of progress between the U.S. and China.
Looking ahead: The highlight will be this week’s Federal Open Market Committee (FOMC) meeting.

Keep reading for an in-depth look.

Beyond the Headlines: Resilient Earnings and Hiring Offer Optimism Amid Worries

Markets opened the week with positive momentum, building on encouraging signs from the previous week. Strong corporate earnings and easing trade tensions gave investors a sense of relief.

One of the early headlines focused on a sharp drop in shipments from China to U.S. ports. Gene Seroka, executive director of the Port of Los Angeles, noted that many major retailers are halting shipments from China due to rising tariffs. Although that sounds concerning, it’s important to view it in context. U.S. imports from China reached their highest level since late 2018 earlier this year. These fluctuations likely reflect businesses adjusting supply chains in response to shifting trade policies rather than a clear, sustained decline.

Tuesday brought a shift in tone as consumer confidence declined for the fifth consecutive month, falling to its lowest level since 2020. Concerns about job prospects and income are weighing on sentiment. Credit card giant Visa offered a more optimistic data point: payment volume on its network rose 7 percent year-over-year, suggesting consumers are continuing to spend.

On Wednesday, we got a deeper look at consumer behavior. Personal spending for March rose 0.7 percent, exceeding expectations. First-quarter GDP, however, fell at a 0.3 percent annual rate as imports far outpaced exports, dragging down overall growth. Part of the spending slowdown was tied to disruptions from January wildfires in California.

Despite mixed economic data, earnings from major technology firms lifted market sentiment. Two of the largest tech firms beat expectations. Cloud business grew faster than forecast, and companies reaffirmed their commitment to investing in artificial intelligence (AI) infrastructure—a key growth theme driving equity markets in recent years. Continued investment in this space is seen as a positive signal for future innovation and business spending.

The week ended with a blend of caution and optimism. Manufacturing sentiment remained in contraction territory, though the data was better than feared. On Friday, the job market delivered a strong upside surprise: the U.S. added 177,000 jobs in March, well above the forecast of 138,000.

In summary, while consumer confidence has softened, actual spending and hiring remained resilient. Shifting trade dynamics are creating volatility in import data, but that may balance out in coming quarters. Importantly, companies are continuing to invest in long-term growth areas such as AI, which supports a more constructive outlook for equities.

As Liz Ann Sonders of Charles Schwab wisely noted, “Neither get in nor get out is an investing strategy; that’s just gambling on moments in time.”

If you’re feeling uncertain, now is a great time to speak with your financial advisor to ensure that your portfolio remains aligned with your long-term goals.

Report Releases—April 28–May 2, 2025

Conference Board Consumer Confidence Index: April (Tuesday)
Consumer confidence fell more than expected, marking five consecutive months with falling confidence.

Expected/prior month consumer confidence: 88.0/93.9
Actual consumer confidence: 86.0

Advanced Estimate of Annualized GDP: First Quarter (Wednesday)
Economic growth slowed more than expected in the first quarter. Net exports were the primary detractor from overall economic growth due to a surge in imports.

Expected/prior quarter GDP growth: –0.2%/+2.4%
Actual GDP growth: –0.3%

Personal Spending and Personal Income: March (Wednesday)
Personal income and spending grew slightly more than expected.

Expected/prior personal income monthly change: +0.4%/+0.7%
Actual personal income change: +0.5%
Expected/prior personal spending monthly change: +0.5%/+0.1%
Actual personal spending change: +0.7%

Employment Report: April (Friday)
The employment report showed continued healthy levels of job growth, with 177,000 jobs added during the month.

Expected/prior change in nonfarm payrolls: +138,000/+185,000
Actual change in nonfarm payrolls: +177,000

The Takeaway

In April, consumer confidence dipped lower than expected as consumers expressed concern about job availability and income levels.
Personal spending and job growth beat expectations in March.

Financial Market Data

Equity

Index	Week-to-Date	Month-to-Date	Year-to-Date	12-Month
S&P 500	2.94%	2.12%	–2.91%	13.80%
Nasdaq Composite	3.43%	3.05%	–6.71%	14.33%
DJIA	3.00%	1.59%	–2.39%	10.03%
MSCI EAFE	3.18%	1.45%	13.68%	14.65%
MSCI Emerging Markets	3.38%	1.86%	6.32%	10.82%
Russell 2000	3.24%	2.89%	–9.02%	1.59%

Source: Bloomberg, as of May 2, 2025

U.S. equities moved higher for the second consecutive week. Tech earnings, a better-than-expected jobs report, and continued easing of trade tensions with China helped push the market higher. The week started with a couple of negatives: falling consumer confidence and a negative advance estimate of first-quarter economic growth for the U.S. Earnings showed a continued commitment to AI infrastructure spending, which was welcomed by investors. We saw continued easing of tariffs, with China allowing an estimated $40 billion in U.S. goods into the country without applying reciprocal tariffs.

Fixed Income

Index	Month-to-Date	Year-to-Date	12-Month
U.S. Broad Market	–0.60%	2.37%	6.36%
U.S. Treasury	–0.38%	2.70%	6.12%
U.S. Mortgages	–0.72%	2.51%	6.97%
Municipal Bond	–0.95%	–0.88%	1.58%

Source: Bloomberg, as of May 2, 2025

The Treasury yield curve lifted, with the short and long end moving incrementally higher. The 2-year increased 8 basis points (bps) to close at 3.84 percent, the 10-year rose 6 bps to 4.32 percent, and the 30-year climbed 6 bps to 4.8 percent.

The Takeaway

Equities moved higher on earnings, a solid jobs report, and easing trade tensions.
The Treasury yield curve lifted, with yields rising 6–8 bps.

Looking Ahead

The focus this week will be on business confidence, the U.S. trade deficit, and wholesale inventories. The highlight, however, will be the midweek FOMC meeting.

On Monday, the ISM Services index for April will be released. Service sector confidence is expected to fall for the second consecutive month.
The U.S. trade balance report for March will be released Tuesday. Expectations are for a slight decrease in the deficit from February.
On Wednesday, the FOMC will make its rate decision. The Federal Reserve (Fed) is expected to keep short-term interest rates unchanged.
Finally, on Thursday, wholesale inventories for March will be released. Inventories rose 0.5 percent in the previous month.

Authored by the Investment Research team at Commonwealth Financial Network^®.

Market Update—Week of April 14, 2025

Posted on April 15, 2025 by George Gallagher

Presented by Mark Gallagher

Inflation surprised to the downside in March, with Consumer and Producer Price indices showing a contraction of prices. Equities rallied sharply on Wednesday following news of a 90-day pause on tariffs for most countries. The move in the intermediate to long end of the yield curve is worth watching.

Quick Hits

Report releases: Consumer and producer prices showed signs of continued cooling in March, coming in below expectations and the prior month’s readings.
Financial market data: U.S. equities rebounded sharply following the announcement of a 90-day postponement of tariffs on most countries.
Looking ahead: The stock market will see an abbreviated week of trading with the Good Friday holiday. The focus this week will be import prices, retail sales, and housing data.

Keep reading for an in-depth look.

Report Releases—April 7–11, 2025

National Federation of Independent Business (NFIB) Optimism Index: March (Tuesday)

Manufacturer small business optimism fell more than expected in March. Business owners cited policy uncertainty, taxes, and quality of labor as key pain points. The net percentage of owners expecting better business conditions fell 16 points, marking the largest monthly decline since December 2020.

Expected/prior month NFIB Optimism Index: 98.4/100.7
Actual NFIB Optimism Index: 97.8

Consumer Price Index: March (Thursday)

Consumer prices continued to cool in March, with each overall change coming in below estimates and the prior month’s readings.

Prior monthly CPI/core CPI growth: +0.2%/+0.2%
Expected monthly CPI/core CPI growth: +0.1%/+0.3%
Actual monthly CPI/core CPI growth: ‒1%/+0.1%
Prior year-over-year CPI/core CPI growth: +2.8%/+3.1%
Expected year-over-year CPI/core CPI growth: +2.5%/+3.0%
Actual year-over-year CPI/core CPI growth: +2.4%/+2.8%

Producer Price Index: March (Friday)

Producer prices were down in March, with both headline and core readings coming in below expectations and the prior month’s readings.

Prior monthly PPI/core PPI growth: +0.0%/‒1%
Expected monthly PPI/core PPI growth: +0.2%/+0.3%
Actual monthly PPI/core PPI growth: ‒4%/‒0.1%
Prior year-over-year PPI/core PPI growth: +3.2%/+3.4%
Expected year-over-year PPI/core PPI growth: +3.3%/+3.6%
Actual year-over-year PPI/core PPI growth: +2.7%/+3.3%

University of Michigan Consumer Sentiment: April, Preliminary (Friday)
Consumer sentiment continued to crater in April. Readings for both current conditions and future expectations declined notably.

Expected/prior month sentiment: 53.8/57.0
Actual month sentiment: 50.8

The Takeaway

Inflation surprised to the downside in March, with both Consumer and Producer Price indices showing a contraction of prices.
Small business optimism and consumer sentiment releases showed a lack of confidence, with both surprising to the downside.

Financial Market Data

Equity

Index	Week-to-Date	Month-to-Date	Year-to-Date	12-Month
S&P 500	5.73%	‒4.38%	‒8.47%	4.54%
Nasdaq Composite	7.30%	‒3.30%	‒13.22%	2.47%
DJIA	4.97%	‒4.20%	‒5.04%	6.44%
MSCI EAFE	0.83%	‒4.14%	2.59%	3.29%
MSCI Emerging Markets	‒3.82%	‒4.97%	‒2.15%	1.91%
Russell 2000	1.83%	‒7.51%	‒16.28%	‒7.70%

Source: Bloomberg, as of April 11, 2025

U.S. equities rebounded sharply last week. Most of the recovery occurred on Wednesday on the back of news of a 90-day postponement of tariffs for those countries that didn’t issue retaliatory tariffs. The S&P 500 was up more than 9 percent on the day following the news. Emerging markets, however, struggled as China was the main country of focus, and the U.S. and China continued to raise their tariffs on each other. China made up more than 31 percent of the MSCI Emerging Markets Index coming into the quarter and was the second largest source of U.S. imports in 2024.

Fixed Income

Index	Month-to-Date	Year-to-Date	12-Month
U.S. Broad Market	‒1.19%	1.06%	5.25%
U.S. Treasury	‒0.74%	1.62%	5.26%
U.S. Mortgages	‒1.26%	1.26%	5.99%
Municipal Bond	‒3.70%	‒2.78%	‒0.42%

Source: Bloomberg, as of April 11, 2025

The shift in tariff policy on Wednesday saw an immediate lift in the yield curve, as investors moved away from bonds to re-enter U.S. equities. As the week developed, another interesting move continued to develop with steepening on the long end of the yield curve. The intermediate to long end of the yield curve has a direct impact on areas such as the housing market, and this is worth watching.

The Takeaway

Equities rallied sharply on Wednesday following news of a 90-day pause on tariffs for most countries.
The yield curve moved higher amid a rotation back into equities.

Looking Ahead

The stock market will see an abbreviated week of trading this week with the Good Friday holiday. The focus this week will be import prices, retail sales, and housing data.

The week kicks off Tuesday with the Import Price Index for March. While this does not include tariffs, it will be interesting to see how foreign exporters are shifting pricing amid potential tariffs.
On Wednesday, Retail Sales for March and the National Association of Home Builders (NAHB) Housing Market Index for April will be released. Retail sales are expected to accelerate in March, driven in large part by the automotive sector. Home builder confidence is expected to fall further in April.
Finally, on Thursday, the Housing Starts and Building Permits for March will be released. Both housing starts and building permits are expected to fall in March.

Authored by the Investment Research team at Commonwealth Financial Network^®.