Market Recap: Stocks Volatile as Trade War Tensions Escalate – April 9, 2025

Major Indexes Show Mixed Performance Amid Trade War Concerns

The U.S. stock market experienced significant volatility on Wednesday, April 9, 2025, as investors continued to grapple with the implications of President Trump’s sweeping tariffs and international retaliation. After an early morning tumble, markets managed to recover some ground by mid-morning.

As of 10:30 a.m. EST, the Dow Jones Industrial Average was up 0.20% to 37,707, the S&P 500 gained 0.5%, and the tech-heavy Nasdaq Composite rose 1.4%. However, these modest gains come after four consecutive sessions of steep losses that have erased significant value from major indexes.

The S&P 500 has lost 12.1% since President Trump announced his intention to impose wide-ranging tariffs on U.S. trading partners last Wednesday, a day he declared as “Liberation Day.” The Dow Jones Industrial Average has declined 10.8% over that same four-session stretch, while the Nasdaq Composite has plunged 13.3%.

Trade War Escalation Drives Market Uncertainty

The primary driver of market volatility continues to be the escalating trade tensions between the United States and its major trading partners. Overnight, the U.S. imposed wide-ranging tariffs, and China responded this morning by raising its tariffs on U.S. products to 84%, up from its previously announced 34%.

The European Union has also taken retaliatory measures, creating a multi-front trade war that has investors concerned about global economic growth prospects. Market analysts warn that these tariffs could raise prices for U.S. consumers and potentially increase the risk of a global recession.

“We do not believe the S&P 500 is currently priced for much beyond a mild recession,” noted Solita Marcelli, chief investment officer Americas at UBS Global Wealth Management, suggesting that further market declines could be ahead if economic conditions deteriorate.

Tech Sector Leads Morning Recovery

Technology stocks led Wednesday morning’s recovery, with the sector showing stronger gains than the broader market. However, many of the “Magnificent Seven” tech giants have been hit hard since the tariff announcement last week.

Apple (AAPL) has been particularly affected, losing 23% of its value over the past four sessions. The iPhone maker, which assembles an estimated 90% of its products in China, has seen its market cap shrink by nearly $775 billion since the tariff announcement.

Other tech giants have also suffered significant losses since Trump’s tariff announcement:
– Tesla (TSLA): down approximately 21.5%
– Amazon (AMZN), Nvidia (NVDA), and Meta Platforms (META): all down between 12% and 13%
– Alphabet (GOOGL): down 7.7%
– Microsoft (MSFT): down 7.2%

Upcoming Earnings and Market Events

As corporate earnings season begins in the U.S., investors will be closely watching company guidance for insights into how businesses are planning to navigate the new tariff environment. Walmart has already stated that it’s maintaining its full-year sales and operating income outlook despite the trade tensions, though it noted that its “range of outcomes has widened” and it desires “to maintain flexibility to invest in price as tariffs are implemented.”

Several companies are scheduled to report earnings after market close today, including:

– Constellation Brands Inc (STZ): The alcohol company is expected to report earnings per share of $2.28 for the quarter ending February 28, 2025, representing a 0.88% increase compared to the same quarter last year.

– Lakeland Industries, Inc. (LAKE): The protection safety company is forecast to report earnings per share of $0.43, representing a 95.45% increase compared to the same quarter last year.

– Richardson Electronics, Ltd. (RELL): The electrical company is expected to report earnings per share of $0.08, a 60.00% increase compared to the same quarter last year.

The first-quarter earnings season is set to accelerate next week, with banking giants JPMorgan Chase (JPM) and Wells Fargo (WFC) scheduled to lead the reporting. Analysts at FactSet estimate a year-over-year earnings growth rate of 7.3% for S&P 500 companies, which would mark the seventh straight quarter of earnings growth.

Healthcare Sector Shows Resilience

While most sectors have been negatively impacted by the trade tensions, healthcare stocks showed strength on Tuesday after the Trump administration announced it would boost reimbursement rates for Medicare Advantage plans in 2026.

Humana (HUM) led the gains with a surge of around 11%, while CVS Health (CVS) rose 8%, and UnitedHealth Group (UNH) climbed 7% amid the broader market rebound. The 5.06% average reimbursement rate increase is more than double the 2.23% rate proposed by the government in January, potentially helping profit margins in the sector.

Market Outlook and Investor Strategies

With the S&P 500 down about 17% from its mid-February peak, the index is approaching bear market territory, defined as a decline of 20% or more from recent highs. This rapid decline has some analysts suggesting that opportunities may emerge for investors with longer time horizons.

“If you look back through history some of the biggest short-term rallies have occurred during bear markets,” noted Steven Sosnick, Interactive Brokers chief strategist. “Down markets tend to see very big sharp up moves because volatility does work in both directions.”

For investors looking to navigate the current volatility, maintaining diversification and focusing on companies with strong balance sheets and less exposure to international trade tensions may provide some insulation from market swings.

The Bottom Line

As the trade war continues to unfold, market volatility is likely to persist in the near term. Investors should prepare for continued fluctuations as the full economic impact of these tariffs becomes clearer. The upcoming earnings season will provide crucial insights into how U.S. companies are adapting to this new trade environment and may help determine the market’s direction in the weeks ahead.