Wall Street Faces Job Market Turmoil

In my Friday newsletters, I’ll now offer you an overview of the day’s market-moving news, a quick glimpse into some top events to watch out for next week, and a list of some stories you may have missed amid all the market ructions.

Trump Suspends Tariffs, Confusion Reigns

President Trump has suspended the 25% tariffs he had imposed this week on most goods from Canada and Mexico, sowing more confusion in already whipsawed markets and fanning worries about inflation and growth. Canadian Prime Minister Justin Trudeau has commented that the U.S. tariff war is likely to drag on for the foreseeable future. U.S. Treasury Secretary Scott Bessent has not held back, labeling the Canadian premier a ‘numbskull’.

Executive Order on Bitcoin

In a surprising move, Trump has signed an executive order to establish a strategic bitcoin reserve, although the crypto world has not responded with enthusiasm. This decision comes amid a backdrop of economic uncertainty and fluctuating market conditions.

European Leaders Stand Firm

European leaders have agreed to increase their defense spending and reaffirm their support for Ukraine in a world that has been upended by Trump’s reversal of U.S. policies. This commitment to defense spending is crucial as global tensions rise.

Job Market Under Scrutiny

As the market prepares to receive the first monthly non-farm payrolls report under Trump’s administration, uncertainty looms large. Will the numbers be on or off? Partial or universal? Higher or lower? Business and markets are left with no clear idea of what U.S. import tariffs will be, creating a gnawing uncertainty about trade and prices that could potentially prove as corrosive as the tariffs themselves.

Layoffs Reach Alarming Levels

Markets are already on edge following Thursday’s news that planned U.S. layoffs soared last month to the highest point since the pandemic recession in 2020, even though weekly jobless claims fell unexpectedly. Meanwhile, private sector jobs in February rose only about half the amount forecast, based on the ADP report released earlier this week.

Economic Contraction Forecast

The Atlanta Federal Reserve’s real-time ‘GDPNow’ model is still tracking a contraction for the economy of 2.4% for the first quarter, although the forecast did improve slightly in recent days. This contraction is a significant concern for investors and policymakers alike.

Broadcom’s Surge Offers Temporary Relief

While chipmaker Broadcom’s post-bell surge on its latest results helped steady U.S. stock futures early on Friday, Wall Street stocks have recorded another rough week. Heavy losses on Thursday saw the S&P 500 clock its biggest daily loss of the year so far, hitting its lowest point since before U.S. President Donald Trump was re-elected on November 5.

Market Indicators and Trends

For chart-watchers, the index fell below its closely-watched 200-day moving average. The tech-heavy Nasdaq is now in what’s known as correction territory, having recoiled more than 10% from its December record high. Bitcoin fell back again, with traders disappointed by Trump’s latest plans for a crypto reserve.

Euro Strengthens Against Dollar

Even after the latest European Central Bank interest rate cut on Thursday, the euro continued its march higher against the ailing dollar. European leaders agreed on a 150 billion euro defense fund overnight, adding to Germany’s seismic fiscal stimulus plans announced earlier in the week.

Job Cuts at Record Levels

Layoffs announced by U.S. employers jumped to levels not seen since the last two recessions amid mass federal government job cuts, canceled contracts, and fears of trade wars. Global outplacement firm Challenger, Gray & Christmas reported that planned job cuts vaulted 245% month-over-month to 172,017 in February, the highest level since July 2020 when the economy was in the midst of a downturn.

For more detailed insights, you can read the original article here.