The toll from Trump's tariffs

What matters in U.S. and global markets today

By Mike Dolan, Editor-At-Large, Financial Industry and Financial Markets

The furious April for U.S. markets has calmed down a bit as the month draws to a close on Wednesday, and now its time to consider the costs to the real economy.

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Some signs of de-escalation of the U.S.-China trade war encouraged a rally in Wall Street stocks last week, while U.S. Treasuries and the dollar were steadied by President Donald Trump's claim that he did not intend to fire Jerome Powell, despite his blistering attacks on the Federal Reserve Chair.

Anxiety persists, however, as none of the major economic or corporate concerns of the past few month have been resolved and policy visibility remains low.

U.S. stock index futures were slightly in the red again ahead of Monday's open. Despite last week's bounce, the S&P 500 remains down 2.6% since the April 2 Trump tariff announcements and down 6.5% for the year to date. The tech-heavy Nasdaq is still down 11% for 2025.  

Some of the trade relief from last week was dialed back a bit over the weekend. Treasury Secretary Scott Bessent on Sunday did not confirm Trump's assertion that tariff talks with China were under way and said he did not know if the U.S. president had talked to Chinese President Xi Jinping.    

Attention now turns to the toll Trump's tumultuous first 100 days in office have taken on the real economy. This milestone will be marked on Wednesday.

Even though the first quarter gross domestic product estimate coming on Wednesday does not capture the period since the April 2 tariff announcement, there is still a significant risk of a negative growth print.

First quarter corporate earnings will continue to stream in too, with some 40% of S&P 500 firms reporting this week and four of the once 'Magnificent Seven' megacaps - Microsoft, Meta, Apple and Amazon - reporting on Wednesday and Thursday. The key focus will be on the companies' outlooks for the rest of the year. 

More up-to-date will be a sweep of labor market reports coming this week culminating in the April employment report on Friday. Weekly jobless numbers suggest the employment picture has held up well, leaving the Fed to focus squarely on potential price aggravations from tariffs. 

However, March inflation readings from the personal consumption expenditures series - the one most closely watched by the Fed - are expected to be benign when released on Wednesday too. However, that may just be the calm before the storm. 

U.S. bond markets will keep a close eye on the Treasury's quarterly funding estimates and plans this week. 10-year yields were subdued first thing Monday after last week's jitters sparked by concerns about Fed independence.

The dollar index is marginally firmer, with Canada's dollar a tad weaker as the country heads to the polls on Monday. Prime Minister Mark Carney's Liberal Party looks set for a return to power, an outcome that seemed unlikely before Trump's inauguration, tariff plans and threats to Canadian sovereignty swung Canadian opinion polls.

The dollar is down slightly against Japan's yen, with the Bank of Japan likely to resist raising interest rates again when it meets this week as tariff uncertainty cuts across rising inflation numbers.

Japan's top currency diplomat Atsushi Mimura on Monday denied a media report that Scott Bessent had told his Japanese counterpart at a bilateral meeting in Washington that a weak dollar and a strong yen are desirable.