U.S. stocks ended last week on a negative note, with the S&P 500 down nearly 3%, the Dow slipping around 2%, and the Nasdaq falling nearly 4%. The pullback came as investors braced for more aggressive trade policy moves from President Trump and grew cautious about the outlook for the U.S. economy.
This week, markets will be watching two major developments: President Trump’s expected tariff announcement on Wednesday, April 2 — dubbed “Liberation Day” — and Friday’s March nonfarm payrolls report, which will provide insight into the strength of the labor market.
Trump is widely expected to unveil a new wave of reciprocal tariffs, aimed at leveling trade terms with foreign partners. According to Goldman Sachs economist Alec Phillips, while markets expect around a 9% tariff rate, the actual announcement may come in much higher — possibly even double — as a negotiation tactic. This approach, seen before with Canada and Mexico, often starts with steep tariffs that are dialed back later.
Last week, Trump already signaled his intent by announcing 25% tariffs on foreign-made vehicles. Barclays' head of research Ajay Rajadhyaksha called it “more significant than markets are treating it,” warning that April 2 could bring a real market shock.
If tariffs are larger than expected, it could spark volatility across global markets, especially in export-heavy economies and sectors. Investors may rotate toward safe-haven assets like the U.S. dollar, gold, and bonds, while risk assets could remain under pressure.
Later in the week, attention will turn to the labor market. The March jobs report will be a key indicator of economic momentum. Analysts will also closely monitor private payroll numbers, job openings, and sector-specific activity reports, particularly in manufacturing and services.
While corporate earnings are expected to be light this week, macroeconomic headlines and trade policy decisions will drive market sentiment. Traders and investors will be looking for clarity from both Washington and economic data, as they navigate an increasingly uncertain environment.
