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What’s happening: US stocks were heavily shorted on Friday on recession fears stroked by US President Donald Trump’s tariff announcements.
What happened: The major US stock indices shed more than 5% on Friday, with the S&P 500 and Dow Jones index delivering their steepest declines in years.
However, shares of Nike, Lululemon, Target and other retailers climbed amid the sea of red.
Why it matters: The US President announced a 10% baseline tariff on imports from major nations, while increasing the rate for nations with trade surpluses. Apart from the blanket tariffs, the Trump administration levied 34% tariff on China, 24% on Japan and 20% on the European Union.
Prospects of a prolonged trade war and sticky inflation stroked fears of a recession in the US, sending the major indices lower on Friday.
Despite this, stocks of some of the biggest US footwear retailers climbed after President Donald Trump said his discussions with Vietnam around trade tariffs had been fruitful. The US had levied 46% tariffs on Vietnamese imports during what the Trump administration calls the “Liberation Day.”
Trump has been eager for countries like Vietnam to lower their tariffs on US goods. “Vietnam wants to cut their tariffs down to ZERO if they are able to make an agreement with the US,” Trump said in a post on Truth Social. The US President also said he looked forward to meeting Vietnam’s General Secretary “in the near future.”
Nike and other footwear retails have large production facilities in Vietnam and the 46% tariffs levied by the Trump administration is feared to have a substantial impact on volumes sold. Prospects of a deal being struck between the US and Vietnam sent shares of such retailers higher.
Deckers Outdoor’s stock spiked 5.10% to close at $106.02 on Friday. Shares of Lululemon Athletica climbed 3.15% to $263.70, while Nike rose 3.00% to $57.25. Target’s stock rebounded 1.53% to settle at $95.72.
What to watch: Investors await the release of consumer credit change (2400 UAE Time) from the US today. Total US consumer credit had risen by $18.08 billion in January, down from an increase of $37.05 billion in December 2024, exceeding market expectations of $14.5 billion. Analysts expect a rise of $15 billion in February.
Markets will also monitor tariff announcements by the Trump administration.
Context: The US dollar rose on Friday on a better-than-expected nonfarm payrolls (NFP) report for March.
Details: The NFP report published by the Bureau of Labor Statistics showed that the US economy added 228,000 jobs in March, significantly higher than the 117,000 job adds in February. The figure also came in well above market expectations of 135,000. This marked the strongest reading in three months.
However, the US unemployment rate climbed to 4.2% in March, hitting the highest level since November 2024. The figure was slightly higher than expectations of 4.1%. The number of unemployed individuals rose by 31,000 to 7.08 million.
The labour force participation rate edged higher to 62.5% in March, from 62.4% in the previous month.
The US labour market exhibiting resilience puts less pressure on the Federal Reserve to cut interest rates to stimulate the economy. The release eased concerns around the US economy plummeting to recession.
The US dollar index, which measures the greenback against six major peers, rose by 0.8% to 102.89 on Friday.
What to watch: Investors await the release of the US inflation rate on Thursday. The annual inflation rate, which eased to 2.8% in February from 3% in January, is expected to decline further to 2.6% in March.
Other Markets: European indices closed lower on Thursday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index down by 4.95%, 4.95%, 4.26% and 5.12%, respectively.
Ukrainian President Volodymyr Zelenskyy criticised the US for their “weak reaction” to Russia’s deadly attack on Kyiv. The RUB/USD pair remained broadly flat in forex trading this morning.
China’s foreign reserves rose by $13.4 billion to $3.241 trillion in March, up from $3.227 trillion in February. This being the highest level since November 2024 lent support to the CNY/USD forex pair.
Japan’s foreign reserves grew by $19.23 billion to $1.27 trillion in March. This being the largest figure since April 2024 sent the JPY/USD pair slightly higher in forex trading this morning.
Australia’s advertisement for jobs, released by ANZ-Indeed, rose by 0.4% in March, rebounding from the 1.3% decline in the previous month. This being the second month this year of a rise in job ads lent support to the AUD/USD forex pair.
Brazil’s trade surplus grew by 13.8% to $8.2 billion in March, rebounding from the deficit recorded in the previous month. The figure coming in significantly higher than market expectations sent the BRL/USD pair higher in forex trading this morning.
Eurozone’s retail sales (1300 UAE Time), Singapore’s foreign exchange reserves (1300 UAE Time), Mexico’s auto production and auto exports (1300 UAE Time), Russia’s foreign exchange reserves (1700 UAE Time) and Bank of Canada’s Business Outlook Survey.
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