Markets Slip as Tariff Fears Eclipse Growth Boost — All Eyes on Friday's Inflation Data

 Key Takeaways for Investors:

• Stocks Retreat Despite Stronger GDP:
  Major US indexes dipped Thursday even as Q4 GDP was revised up to 2.4%. Markets instead focused on Trump’s 25% auto import tariffs, reigniting fears of a widening trade war.

• Automakers Hit Hard:
  Shares of Toyota, Mercedes-Benz, and GM fell as the tariffs are set to take effect next week. The broader S&P 500 lost 0.3%, while the Nasdaq 100 fell 0.6% and the Dow slid 0.4%.

• Tariff Worries Trump Economic Data:
  Despite upward revisions in GDP and lower inflation revisions, analysts say investors remain focused on forward-looking risks, including inflation persistence and trade uncertainty.

• Fed Likely to Hold Rates Steady:
  Inflation remains "sticky," and the Fed’s preferred gauge — core PCE — is expected to show sustained pressure when released Friday. Fed officials are cautious, citing tariff escalation risks.

• Investor Sentiment Rebounding Slightly:
  Bearish sentiment among retail investors eased, although it remains historically elevated. Technical analysts see potential for markets to form a short-term bottom off March lows.

• Asset Class Snapshot (as of 4pm NY time):

  • S&P 500: -0.3%

  • Nasdaq 100: -0.6%

  • 10Y Treasury Yield: +1 bp to 4.36%

  • Gold: +1.3% to US$3,057/oz

  • Bitcoin: -0.3% to US$87,052

  • WTI Crude: +0.2% to US$69.79/bbl

Investor Insight:

This week’s choppy market shows the narrative tug-of-war between solid economic data and escalating geopolitical risks. Friday’s PCE inflation print will be pivotal in setting the tone for Q2. For now, traders should brace for volatility, especially in rate-sensitive and export-heavy sectors.