Market Movers: Tariffs, Tech, and Trade

Fresh news and strategies for traders. SPY Trader episode #1084. Hey folks, it's your pal, Penny Pincher, here with your midmorning Spy Trader update. It's 6 am on Thursday, April 10th, 2025, and things are moving fast! Let's dive right into what's shaking up the market. Yesterday was a wild ride! The market went on a tear after President Trump announced a 90day pause on most reciprocal tariffs. The Dow Jones jumped nearly 8%, the S&P 500 shot up 9.5%, and the Nasdaq exploded with a 12.2% gain. This is great news, but remember, tariffs on Chinese goods are still on the rise, so we're not out of the woods yet. Before this surge, the S&P 500 was down about 17% from its February peak, getting close to bear market territory. Even with yesterday's gains, we're still about 11% below that peak, so keep that in mind. Tech and travel stocks were the stars of the show yesterday. Nvidia soared almost 19%, Apple jumped over 15%, and airlines like Delta and American Airlines were up over 20%. It's important to remember that sectors perform differently depending on where we are in the economic cycle. Early in the cycle, economically sensitive sectors do well, but later on, defensive sectors tend to shine. If we head into a recession, defensive stocks are your friend. Speaking of the economy, there are some mixed signals. The good news is that GDP grew by 2.4% in the last quarter of 2024. But some are predicting a slowdown in GDP growth in the first quarter of 2025, with forecasts below 1% for the year. Tariffs are also putting upward pressure on prices, with inflation expected to hit around 4% this year. The unemployment rate is also expected to increase to about 5%. Consumer spending slowed down in February, even though incomes went up, because people are saving more. What about the big companies? Walmart reaffirmed its sales and operating income outlook for the year, even with the trade war going on. But they did say they're seeing a wider range of possible outcomes because of a less favorable product mix and the need to stay flexible on pricing due to tariffs. Keep an eye on that! So, what's Penny's advice today? First, diversify, diversify, diversify! Don't put all your eggs in one basket. Look for companies with solid fundamentals and a history of earnings growth. Stay informed about trade developments, as they can really move the market. Given the concerns about an economic slowdown, you might want to consider defensive sectors like healthcare, consumer staples, and utilities. Remember to keep a longterm perspective and don't make rash decisions based on shortterm market swings. What did the financial planner do at the beach? Checked his liquid assets. And most importantly, make sure your portfolio matches your risk tolerance and timeline. When in doubt, talk to a financial advisor. Alright, that's it for this Spy Trader update. Stay tuned for more throughout the day, and happy trading!