One of the Wildest Weeks on Wall Street - Crash Fears, Tariff Chaos, and a Historic Comeback

Friday, 11th of April

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What Moved The Market This Week

We've just experienced one of the most turbulent weeks in the markets in recent memory. The week was marked by extreme volatility, triggered primarily by escalating trade tensions and tariff hikes.

On Wednesday, the pre-market sell-off in U.S. equities continued after new tariffs officially came into effect just after midnight U.S. time. By Thursday, U.S. Treasury yields spiked sharply due to a heavy sell-off in bonds. This intense bond market reaction led to fears of a looming liquidity crunch — in other words, the market was at risk of running dry. A full-blown crash seemed imminent.

A surprise announcement from President Trump suspending tariffs for 90 days sparked a dramatic market rally, easing fears of a full-scale trade war. At the same time, tariffs on Chinese imports were raised to 125%, further escalating tensions between the U.S. and China.

On April 9, 2025, the S&P 500 posted one of its largest single-day gains since World War II, surging by 474.13 points (+9.5%) to close at 5,456.90. Technically, Wall Street was deeply oversold, with sentiment at rock bottom. The 90-day tariff pause triggered an explosive rebound.

Following this historic surge, we saw profit-taking ahead of Thursday's market open. Market participants noted that Trump’s sudden reversal was as chaotic as the original announcement and calculation of the reciprocal tariffs. Despite the new scenario, the burden on the U.S. economy remains significant: 125% tariffs on China, 10% across all imports, and 25% on select sectors present a major increase compared to last year.

The markets remained volatile throughout the week. Still, despite significant intraweek swings, the week ended on a strong note as investors reacted to the latest developments in the trade conflict.

Dow Jones Industrial Average (DJIA):

• Weekly performance: +5% (+1,897.85 points)

• Year-to-date: Still down 5.5% from the start of the year

S&P 500:

• Weekly performance: +5.7% (+289.28 points)

• Year-to-date: Still down 8.8% year-to-date

  
  

Economy / Fed: Initial jobless claims came in at 223,000 last week, in line with expectations.

Inflation: March consumer prices rose 2.4% year-over-year and fell 0.1% month-over-month, below expectations of 2.6% and +0.1%. Core inflation (excluding food and energy) rose 2.8% YoY and 0.1% MoM, versus forecasts of 3% and 0.3%.

Producer Prices: March PPI rose 2.7% YoY (headline) and 3.3% (core), below Wall Street expectations of 3.3% and 3.6%. Month-over-month, headline and core PPI declined 0.4% and 0.1%, respectively (versus +0.2% and +0.3% expected). The drop was driven largely by falling energy prices. While the data is encouraging, the effects of tariffs are expected to be felt starting in April.

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What's Coming Up Next Week

Wall Street will most likely face another volatile week. Bank stocks reacted positively to early earnings reports on Friday.

Earnings next week:

• Monday: Goldman Sachs

• Tuesday: Bank of America, Citigroup, Johnson & Johnson, PNC Financial, United Airlines

• Wednesday: Alcoa, CSX, US-Bancorp, SL Green, ASML (key focus)

• Thursday: American Express, Charles Schwab, State Street, Truist Financial, UnitedHealth, Netflix

  
  

Fed Chair Jerome Powell is also scheduled to speak at the Economic Club of Chicago on Wednesday.

Beyond earnings, banks' commentary on the economic outlook will be closely watched, with many warning of the potential consequences of rising tariffs.

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Notable Analyst Insights

JPMorgan Chase: "Our clients have become more cautious amid rising volatility driven by geopolitical tensions and trade uncertainty. The economy faces serious headwinds—including tariffs, inflation, fiscal deficits, and elevated asset prices—despite potential tailwinds from deregulation and tax reform. As always, we hope for the best but prepare for a wide range of scenarios."

A U.S. recession is expected this year if announced tariffs remain in place. GDP is forecast to decline by 0.3% in 2025, with unemployment rising from 4.2% to 5.3%. Market outcomes vary widely, as the trajectory of the stock market now hinges largely on one person, who could either soften or intensify the shock.

Bear case: S&P 500 ends 2025 at 4,000, with no tariff relief. 2026 EPS forecast at $250, versus consensus of $307—two years of zero real earnings growth.

Base case: S&P 500 at 5,200, EPS at $280.

Bull case: S&P 500 at 5,800, EPS at $290. The shock hit at a time of high valuations and crowded positioning. Possible de-escalation triggers include court challenges, polling data, and declining party support. Roughly two-thirds of U.S. households are invested in the stock market.

The Liberation Day shock is expected to raise the average tariff rate from 3% to 19% in 2025. If fully implemented, it would be the largest tax hike (2.4% of GDP) since 1968. A 1% GDP decline is estimated to cut EPS growth by 3.7%. This macroeconomic shock could lead to a recession, prompting five Fed rate cuts by January 2026.

Wells Fargo: "We support efforts to challenge harmful trade practices but recognise the risks of aggressive measures. A timely, mutually beneficial resolution would support businesses, consumers, and markets. We expect continued volatility and are preparing for a softer economic environment in 2025."

BlackRock: "Uncertainty and concern dominate our client conversations. We've seen similar phases before — the financial crisis, COVID, and the 2022 inflation shock — where deep structural shifts reshaped markets and policy."

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Disclaimer: This content is for informational and educational purposes only and does not constitute financial advice. It does not consider your personal objectives, financial situation, or needs. You should consider whether the information is appropriate for your circumstances and seek professional advice before making any investment decisions. Investing in stocks carries inherent risks, and the application of any strategy may not eliminate the risk of loss. Market conditions, volatility, and unforeseen events can impact outcomes, and past performance is not indicative of future results.