Market Got You Spooked? Here’s What’s Really Going On

Is this rally for real — or just the calm before another storm?

President Trump’s surprise announcement of a 90-day pause on new tariffs (excluding China) injected some short-term relief into financial markets this week. Equities bounced back from earlier declines, helping to stabilize sentiment after a volatile stretch.

But with earnings cuts, slowing GDP projections, and technical weakness still in play, the foundation beneath this market rebound remains fragile heading into next week.

---

✨ What’s Inside This Newsletter (Premium Preview)

🔹 The real story behind this week’s rally
🔹 Why analysts are slashing 2025 earnings forecasts
🔹 Sector breakdown: who’s holding up, who’s slipping
🔹 The strategy behind Trump’s tariffs
🔹 Next week’s risk factors and potential market scenarios
🔹 Charts + data you won’t get on social media

---

📊 Market Snapshot (as of April 11, 2025, last close)

Ticker	Index/ETF	Price
SPY	S&P 500 ETF	$524.58
QQQ	Nasdaq-100 ETF	$446.18
DIA	Dow Jones ETF	$395.68

Markets are still open — these numbers reflect current intraday pricing and are subject to change by close.

---

⚠️ Fragile Fundamentals Beneath the Rally

Despite the bounce, several macro and micro signals suggest this market is skating on thin ice.

📉 1. Earnings Revisions Are Rolling In

Wall Street analysts have been revising 2025 earnings downward, with FactSet now projecting S&P 500 EPS at $267.59, down from earlier estimates of $272. Some forecasts have turned even more pessimistic, dropping below $230 in scenarios where tariffs are reintroduced or extended.

Walmart and Delta have already issued guidance warnings, citing higher input costs and reduced consumer demand.

🛑 2. Slowing Growth Expectations

Morningstar revised its U.S. GDP growth forecast for 2025 down to 1.2% from 1.9%, citing slowing business investment and potential spillovers from trade disruptions. Consumer spending appears to be softening as well, with weakness in retail sales and credit card delinquencies starting to rise.

📉 3. Technical Weakness Lingers

Although the rebound has lifted major indexes off recent lows, both the S&P 500 and Nasdaq 100 spent time below their 200-day moving averages — a red flag for many chart watchers.

Breadth remains narrow: megacaps are doing the heavy lifting, while small- and mid-cap stocks continue to lag.

💳 4. High Rates Still Pressuring the Real Economy

Even as the Fed holds steady, interest rates remain elevated, dragging on sectors like housing, banking, and consumer finance. Borrowing costs are eating into corporate margins, and highly leveraged companies are particularly exposed as refinancing becomes more expensive.

🌍 5. Geopolitical and Policy Uncertainty

The tariff pause does not include China, and officials have offered few details about what might come after the 90-day window. Global risks — from Ukraine, to the Red Sea shipping lanes, to Middle East tensions — remain unresolved.

---

🧭 What’s the Strategy Behind the Tariffs?

President Trump’s recent tariff policies, including the 90-day pause on new tariffs for most countries (excluding China), are part of a broader strategy aimed at reshaping the U.S. economic landscape. This approach, often referred to as “economic nationalism,” seeks to reduce trade deficits, encourage domestic manufacturing, and assert greater control over international trade dynamics.

🎯 Objectives of the Tariff Strategy

The administration’s stated goals for these tariffs include:

• Revitalizing U.S. Manufacturing: By making imported goods more expensive, the tariffs aim to encourage companies to produce domestically, thereby boosting American manufacturing jobs.​
• Addressing Trade Imbalances: The tariffs are designed to pressure countries with significant trade surpluses with the U.S. to engage in more balanced trade relationships.​The New Yorker+1The White House+1
• National Security: The administration argues that reducing reliance on foreign goods, especially in critical sectors, enhances national security.​

🤔 Is There a Deeper Strategy?

Some analysts and commentators speculate that the administration’s aggressive tariff policies may also serve to:

• Expose Market Vulnerabilities: By inducing market volatility, the administration could be aiming to highlight systemic weaknesses and overreliance on foreign supply chains.​
• Target Malpractices: The tariffs might be a tool to pressure countries and foreign entities engaged in practices deemed unfair or harmful to U.S. interests.

---

🔮 Market Outlook for April 14–18

Depending on how new data and headlines unfold, here are three plausible short-term scenarios:

▶️ 1. Sideways or Mild Pullback

If this week’s rally runs out of steam, the S&P 500 could settle between 520–525, with traders cautious ahead of economic reports and earnings.

⬆️ 2. Further Upside

Positive earnings surprises or calming rhetoric on trade could push the S&P 500 toward 530–535, especially if tech stocks maintain momentum.

⬇️ 3. Return of Volatility

Any escalation in U.S.-China tensions or disappointing corporate guidance could drag the market back toward 510–515 territory.

---

📊 Charts of the Week

A picture’s worth a thousand words—especially when the market’s trying to speak. Here are three charts you should be watching:

📈 SPY and the March 2020 Supertrend

The S&P 500 ETF (SPY) bounced hard this week—but not without flirting with a key long-term trendline dating all the way back to the March 2020 COVID low.

That blue support line has acted as the market’s supertrend for over four years. A decisive break below it would mark a major shift in market structure—and could trigger broader risk-off behavior.

💳 Credit Card Borrowing Keeps Climbing

Consumer credit card balances have surged past $1.1 trillion, with a steady upward slope (+1.13%) since early 2021.

Even as rates remain elevated, Americans continue borrowing at a record pace—a sign that consumer strength may be more fragile than it looks, especially if income growth fails to keep up.

⚠️ Credit Card Delinquencies on the Rise

Delinquency rates on credit card loans have risen sharply, climbing from post-pandemic lows of 1.5% to around 3% today.

The upward slope (+5.71%) suggests financial strain is growing, even as spending remains elevated. This divergence between credit usage and credit health could become a headwind for both the consumer economy and financial stocks.

---

🗓️ What to Watch Next Week

• Tuesday: U.S. CPI report — inflation expectations could shift Fed policy outlook.
• Wednesday: FOMC minutes — insight into rate hike vs. cut bias.
• Thursday–Friday: Major bank earnings kick off (JPMorgan, Citi, Wells Fargo).
• Ongoing: Watch for tariff policy updates or commentary from the White House and China.