Market Recap: Week 16: April 14–17, 2025
- Gordon Achtermann, CFP®, CSRIC®, MBA
- Apr 21
- 3 min read
It was another choppy week for markets on the heels of the prior week's historic rally.
The S&P 500 index fell 1.5% this week as declines in technology, consumer discretionary, and communication services outweighed gains in other sectors.
The S&P 500 finished Thursday (markets are closed for Good Friday) at 5,282.70. The index is in the red for the month, down 5.9% for April and 10% from where it ended 2024.
US President Donald Trump called for the termination of Federal Reserve Chair Jerome Powell, adding to investors' concerns this week. The president said in a social media post on Thursday that Powell should "certainly" lower interest rates.
"Powell's termination cannot come fast enough," Trump said.
This came after Powell said on Wednesday that tariffs are "highly likely" to generate at least a temporary increase in inflation, though price pressures may be more persistent.
"We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension," Powell said.
March housing starts declined by 11% compared to a month earlier to a 1.32 million annual rate, according to the US Census Bureau, compared with the 1.42 million estimate compiled by a Bloomberg survey.
Technology had the most significant percentage drop, sliding 3.7%, followed by a 3.2% decline in consumer discretionary and a 2.9% loss in communication services. Health care also fell, slipping 1.2%.
Key data last week
· Retail sales rose 1.4% m/m
· Housing starts came in at 1.32 million
· Industrial production fell 0.3% m/m
S&P 500 Style and Sector Returns
Thought of the week
Markets are forward-looking, but earnings estimates don’t have to be.
Currently, consensus is projecting 1Q25 and FY 25 year-over-year EPS growth of 7.1% and 10.0%, respectively. Relative to 10-year medians of 4.4% and 3.1%, both estimates are strong. Unfortunately, they’re based on economic assumptions that no longer hold. Tariffs will slow growth, increase inflation, and undermine confidence. Weaker demand will hurt revenues, higher costs will hurt margins and reduced profitability will hurt buybacks. Even if the administration changes its mind, the longer the uncertainty remains, the longer the spending lumps, and the greater the hit to growth. Equity analysts aren’t immune to this uncertainty. Rather than bouncing estimates around with tariffs, current numbers are effectively pre-policy.
As this week’s chart shows, downward revisions to 2025 EPS estimates aren’t any larger than usual. Since January, consensus has dropped 2.5% compared to the 10-year average of 2.6%. As policy clarifies, there's a risk EPS estimates could hit the ground hard, catapulting valuations [downward].
Early impacts of tariffs are showing up in other ways. Retail sales spiked 1.4% in March, the largest m/m increase in over two years, driven by 5.3% growth in auto sales as consumers front-run tariffs. Moreover, 44 companies have reported earnings so far, and tariffs have been mentioned 239 times. Many management teams, however, are pausing guidance until policy clarifies. For now, the range of outcomes is wide, and the impacts are difficult to predict.
Companies’ ability to hold the line will depend on their individual supply chains, pricing power, and balance sheets, to name a few. In such times, first principles are paramount: quality, diversification, and a long-term perspective.
(Source: JP Morgan)
Up Next
Economic data out this week will include March new/existing home sales, durable goods orders, consumer sentiment, and the S&P April US services and manufacturing purchasing managers' indexes (PMIs).
All the Best,
Gordon Achtermann, CFP®
703-573-7325
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