Stock Market Preview: What to Watch This Week

Trump’s 'Liberation Day' Tariff Bombshell Looms

All eyes are on 2 April, when former President Donald Trump is expected to unveil a sweeping new set of tariffs. The announcement, dubbed "Liberation Day" by Trump himself, is anticipated to mark a sharp escalation in his renewed campaign to overhaul the United States' trade relationships since returning to office.

Insiders suggest the new trade measures could target as many as 15 nations, with speculation mounting that the actual number could be even higher. A recent Wall Street Journal report hinted at the possibility of a blanket 20% tariff on all countries running trade surpluses with the U.S., intensifying global trade tensions.

Last week, Trump rolled out fresh tariffs on foreign automobiles, fulfilling his pledge to penalise overseas car and truck imports. Economists have cautioned that this move could push up domestic vehicle prices, though Trump dismissed those concerns, stating he “couldn’t care less” about foreign manufacturers raising prices.

He argues that these trade measures are critical for correcting imbalances, boosting government revenue to support tax reforms, and incentivising a return of manufacturing jobs to American soil.

March Jobs Report Takes Centre Stage

Investors will be closely monitoring a packed U.S. economic calendar this week, headlined by the March nonfarm payrolls report due on Friday.

Forecasts suggest the U.S. added approximately 139,000 jobs in March, a slowdown from February’s 151,000, while the unemployment rate is expected to hold steady at 4.1%.

Ahead of Friday’s figures, market watchers will dissect private-sector employment data, job vacancy reports, and updates on manufacturing activity for further clues about the state of the labour market.

Last week, major Wall Street indices ended lower amid growing concerns over the economic impact of Trump's tariff policies. Meanwhile, consumer spending underwhelmed in February, and a core inflation metric saw its sharpest rise in over a year. A consumer survey also revealed inflation expectations surged to their highest in nearly two-and-a-half years.

According to analysts at ING, “Tariff threats are already fuelling worries about rising prices, which could erode consumer purchasing power. Households are also anxious about job security and entitlement cuts due to the Department of Government Efficiency’s proposed budget measures.”

Trump Takes a Hard Line on Putin

In a striking shift in rhetoric, Trump expressed frustration with Russian President Vladimir Putin during a recent NBC News interview, saying he was “pissed off” over Putin’s remarks casting doubt on the legitimacy of Ukrainian President Volodymyr Zelensky.

As part of his strategy to broker a peace deal in Ukraine, Trump threatened to impose secondary tariffs ranging between 25% and 50% on any buyers of Russian oil if he believes the Kremlin is obstructing his peace efforts.

This marked a notable departure from Trump’s recent praise for Putin and criticism of Zelensky, raising concerns among European leaders about the future of U.S. military and diplomatic support in the region.

Despite his tough words, Trump maintained he has a “very good relationship” with Putin and indicated that his anger would “dissipate quickly” if the Russian leader changed course.

Early Electoral Tests in Trump’s Second Term

Two major political events this week are expected to offer a preliminary gauge of Donald Trump’s renewed influence on the American political landscape.

In Wisconsin, an officially nonpartisan race for the state’s Supreme Court has become the most expensive judicial election in U.S. history. Much of the funding surge is linked to Elon Musk’s backing of conservative candidate Brad Schimel, who is facing liberal challenger Susan Crawford in the 1 April vote.

In a bold move, Musk reportedly issued million-dollar cheques to two individual voters and offered smaller incentives to others in support of Schimel, warning that Republicans are “in serious danger” of losing the contest.

Tesla Q1 Deliveries in the Spotlight

Tesla is set to release its first-quarter delivery figures this week, with market analysts predicting a potential year-on-year decline. The numbers, expected on 2 April, serve as a key indicator of the electric vehicle giant’s performance.

According to Wedbush Securities’ Dan Ives, deliveries are projected to fall by around 7% compared to the same period last year, reaching between 335,000 and 360,000 units.

This downturn is being attributed to various factors, including political backlash against CEO Elon Musk, whose recent involvement in government downsizing initiatives through the so-called “Department of Government Efficiency” (DOGE) has sparked protests at Tesla showrooms.

Additionally, heightened competition and consumer anticipation for a refreshed Model Y are believed to have dampened first-quarter sales momentum.

(Sources: investing.com, reuters.com, ChatGPT)