Investors are in a bad mood. This time, they might be right.
Subscribe to enjoy similar stories. A Friday rally can’t hide the fact that the stock market is stuck in an ominous pattern—and it’s not clear what will shake it out. Indexes notched their worst weekly performances in months as markets were whipsawed on tariff news.
The S&P 500 rose 0.6% on Friday but fell 3.1% on the week, its worst weekly showing since September. It’s now down 1.9% for the year. The Dow Jones Industrial Average fell 2.4%, and the Nasdaq Composite dropped 3.5%.
The biggest problem is uncertain federal policy, which appears to be causing many businesses to hold off on making investment decisions. President Donald Trump imposed tariffs on Canada, Mexico, and China before backtracking on some of the penalties and then promising even more to come. The word “uncertainty" came up 47 times this week in the Federal Reserve’s latest Beige Book, which gathers evidence on economic conditions around the country—about three times as often as it was mentioned in January.
The good news is that the economy is holding up relatively well. On Friday, the Labor Department said that 151,000 jobs were added in February, below economists’ expectations but not by much. In a speech in New York on Friday, Federal Reserve Chair Jerome Powell reassured investors that the economy is in a “good place." Investors, however, are behaving as if things are about to get much worse.
U.S. Treasury yields are coming down, caused by “worries about signs of slowing U.S. growth," according to investment managers at Janus Henderson Investors.
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