* Investors hope to get more clarity on tariffs on April 2
* Options market prices more volatility around “Liberation
Day”
* Impact of DOGE on jobs will be in focus on April 4 report
NEW YORK, March 28 (Reuters) – A rocky U.S. stock market
will be tested in the coming week by a pivotal deadline for
President Donald Trump’s tariff plans and an employment report
that could reveal a slowing economy.
The S&P 500 posted a weekly loss, selling off on
Friday after data pointed to underlying price pressures. Earlier
this month, the benchmark index marked a correction, dropping
more than 10% from its record high.
The index is down 9.17% from its February 19 high as
uncertainty over the health of the U.S. economy and trade policy
has kept investors on edge.
Investors remain worried about signs that Trump’s trade war
could reignite inflation.
“April is going to have a lot of moving parts and probably a
lot of volatility following a really difficult March,” said Eric
Kuby, chief investment officer at North Star Investment
Management Corp. “There’s a lot of information that could move
markets in a variety of different directions.”
Investors have been hoping the coming days will clarify the
tariff landscape. Trump has pointed to April 2 for a broad batch
of tariffs to be announced, including “reciprocal” levies on
countries, calling it a “Liberation Day” for the U.S. economy.
The tariff situation has led Wall Street analysts to pull
back on economic and corporate earnings forecasts, while
uncertainty over how trade policy will play out is weighing on
businesses and consumers.
A survey this week showed U.S. consumer confidence plunged
in March to its lowest in more than four years, with households
fearing a recession and higher inflation because of tariffs.
“Everybody wants clarity because however it plays out, it
gives the roadmap and we’re going to adapt, adjust,” said Jack
McIntyre, portfolio manager for Brandywine Global. “It’s this
cloud of uncertainty that’s creating some angst.”
On Wednesday, Trump announced a 25% tariff on auto imports,
a measure that could add thousands of dollars to the average
cost of a vehicle in the U.S. Shares in carmakers such as
General Motors and Ford tumbled on Thursday.
Data from options analytics service ORATS show the equity
options market pricing higher volatility for near-term S&P 500
option expirations, including contracts expiring on March 31 and
April 4, compared to those further out.
“Traders are paying a premium for near-term protection,”
Matt Amberson, principal at ORATS, said.
After annual gains of over 20% for years, the S&P 500 is
logging a 5.12% decline so far in 2025 as the end of the first
quarter nears. The index has lost its gains since Trump’s
November election, which had stoked excitement on Wall Street
about the president’s expected pro-growth agenda that has been
deflated by worries over tariffs.
The forward price-to-earnings ratio on the S&P 500 has
moderated to less than 21 times as of Wednesday, compared to
about 22 to start the year, but remains well above its long-term
average of 15.8, according to LSEG Datastream.
“We came into the year with an expensive market coupled with
high expectations. And now we’re getting uncertainty,” said Jack
Ablin, chief investment officer at Cresset Capital. “Those …
don’t work very well together.”
Tariff worries have compounded concerns about the U.S.
economic outlook. Investors will focus on the monthly U.S. jobs
report due on April 4.
Employment growth is expected to have slowed in March to
128,000 from 151,000 in February, according to a Reuters poll.
One focus on Wall Street is how much light the jobs data
will shed on an effort led by Trump ally Elon Musk to reduce the
federal government workforce.
The end of the first quarter on Monday could bring asset
price fluctuations, as portfolio managers make last-minute
adjustments. Investors also will begin eyeing the start of
first-quarter earnings season, with reports arriving in earnest
later in the month.
“We’re generally in a risk off environment. That’s been the
tone since we’ve entered this correction phase,” said Charlie
Ripley, senior investment strategist for Allianz Investment
Management. “So it remains to be seen whether we’ve seen the
bottom.”
(Reporting by Lewis Krauskopf and Carolina Mandl and additional
reporting by Saqib Ahmed, in New York; Editing by Saqib Iqbal
Ahmed, David Gregorio and Richard Chang)
