Stocks Closed Mixed Last Week In A Shortened Trading Week Stocks closed mixed last Thursday in a shortened trading week. The Dow and the Nasdaq were down, while the S&P 500, small-cap Russell 2000, and mid-cap S&P 400 were up. The big three indexes closed lower for the week. But the small-cap and mid-cap indexes finished higher, making it their second up week in a row. It was a busy week last week, especially towards the end. Last Wednesday, word that Nvidia would be taking a $5.5 billion charge after saying that new export controls to China would curb sales, sank shares. That also weighed on other chip stocks. And Wednesday's comments by Fed Chair Jerome Powell that President Trump's tariffs, which were "significantly larger than anticipated," could result in "higher inflation and slower growth" dragged on stocks as well. He continued by saying, "we may find ourselves in a challenging scenario in which our dual-mandate goals are in tension." (The Fed's dual mandate is maximum employment and price stability, i.e., low inflation.) As you know, the President has put a 90-day pause on reciprocal tariffs for most countries (sans China), to allow negotiations to take place. And it looks like that's what's happening. On Thursday, Italy's Prime Minister Giorgia Meloni visited the White House and said "I'm sure we can make a deal" on trade/tariffs. "I'm here to help with that." President Trump followed up by saying "there will be a trade deal, 100 percent." The President later in the day said "we're going to make a deal with everybody" in the "next three to four weeks." While the 10% base tariffs are still in effect, the negotiations for many countries could significantly reduce the larger-than-expected reciprocal tariffs, and maybe ever lower the baseline tariffs for many. Moreover, it could result in more market access for U.S. goods. Of course, we won't know that until the deals are announced. But it's likely that what was first announced back on April 2 will be significantly reduced. If so, that would take some pressure off the Fed, and potentially create a nice upside surprise for the economy. China remains the wildcard. We have 145% tariffs on them, and they have 125% tariffs on us. While President Trump and President Xi have not formally talked about tariffs since the trade war began, there has been some high-level outreach by Chinese officials. Given that trade between the U.S. and China has essentially stopped for some products, there's incentive for both countries to talk. Maybe even more so for China, given that exports to the U.S. are 5 times what the U.S. exports to them. In other news, Thursday's Weekly Jobless Claims were down -9,000 at 215,000 vs. the consensus for 225,000. The Housing Starts and Permits report showed Starts at 1.324 million units (annualized) vs. last month's 1.494M and views for 1.420M. Permits were at 1.482M vs. last month's 1.459M and estimates for 1.450M. We've got a full docket of economic reports out this week, as usual. But tariff news is likely to be the biggest influence on stocks prices. In the meantime, the worst of the tariff news could very well be behind us. And if deals are expected to begin, being announced in the coming weeks, the market could be bid up in anticipation of that. The market often trades on expectations. And if the expectation is for better news coming down the pike, now could be the time to see the market begin pricing that in. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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