April 7-11 Stock Market Outlook: Macro Insights & Trading Plan

Quick Recap: March 31- April 4 Week’s Market Action

Theweek of March 31 to April 4, 2025, witnessed notable declines in the stock market. While there’s little new to add, it’s important to highlight that we’ve been discussing this potential downturn for several months. Regular readers of Ki-Wealth’sweekly stock market analysesare likely the most prepared for this scenario and are advised to maintain a higher cash reserve compared to stock investments for the time being.

On Friday, April 4, 2025, the U.S. stock market experienced high trading volumes as investors reacted to unfolding events. The Dow Jones Industrial Average dropped by 4%, the Nasdaq Composite by 6%, and the S&P 500 by 4.8%, marking their steepest single-day losses since the early days of the COVID-19 pandemic.

This decline was primarily driven by the Trump administration’s introduction ofreciprocal tariffs, which triggered a significant market sell-off during the week. Several key factors contributed to this reaction:

• Economic Uncertainty:Investors were apprehensive about the potential adverse effects on global trade and economic growth. The tariffs, with a baseline of 10% on all imports and higher rates for specific countries, sparked fears of a trade war and retaliatory actions. Indeed, on Friday, April 4, we witnessed that China introduced retaliatory tariffs on U.S. imports.
  • China imposed a 34% tariff on all goods imported from the U.S., effective from April 10, 2025. This was in direct response to the U.S. imposing a similar 34% tariff on Chinese imports. China implemented export controls on several rare earth elements, including samarium, gadolinium, and terbium. China added 11 U.S. firms to its “unreliable entities list,” which includes companies that have violated market rules or contractual commitments. Chinese customs suspended imports of chicken from two U.S. suppliers due to repeated detection of banned substances. China filed a formal complaint with the World Trade Organization, arguing that the U.S. tariffs violated international trade rules.
• Inflation Concerns:The increased tariffs could elevate costs for imported goods, potentially driving inflation. This scenario poses risks to consumer spending and corporate profits, leading investors to adopt a more cautious outlook. These materials are crucial for high-tech industries, such as aerospace and electronics.
• Corporate Earnings:Companies heavily reliant on imports or those that export a substantial portion of their products were expected to encounter higher costs and potential market barriers. This uncertainty prompted a sell-off as investors anticipated diminished future earnings.
• Market Sentiment:The tariff announcements generated negative sentiment across the market, resulting in widespread sell-offs across various sectors. The fear of an extended trade conflict and its implications for the global economy contributed significantly to the market’s decline.

As a result of the escalation of the trade conflicts, the S&P 500 Index dropped by 8.21% during the past five trading days, Nasdaq 100 ended in -8.43% WoW, and Dow Jones Industrial Average dropped by 7.41% WoW. Since the beginning of 2025, small-cap stocks were hit the most, with Russell 2000 dropping by 18.72%.

The forecast for April 7-11, 2025, appears grim. An analysis by Ki-Wealth’s stock market sentiment tool revealed a sharp decline in investor confidence last week, plummeting from 69% to 92%. This level of bearish sentiment hasn’t been seen since the financial crisis of 2008.

Key Macro Insights & Data Watchlist (April 7-11, 2025)

As we approach the week of April 7-11, it’s important to keep an eye on significant macroeconomic events. While Monday and Tuesday are expected to be relatively calm, the pace picks up startingWednesday, April 9. The focus will be on theU.S. Federal Open Market Committee (FOMC) meetingand the release ofcrude oil inventories.

What Will Be in the FOMC Minutes?

On April 9, the much-anticipated FOMC minutes will be released, offering an in-depth look at the Federal Reserve’s discussions from their March meeting. Investors will closely analyze these minutes for insights into the Fed’s monetary policy stance and economic outlook. The central question is whether the Fed will maintain, raise, or lower interest rates. Additionally, any updated economic projections could significantly impact market sentiment, with optimistic forecasts likely boosting confidence and negative ones potentially prompting caution. The Federal Reserve will likely express a cautious approach and may provide some warning signals, on economic slowdown. Currently, the probability of the next interest rate cut remains at 33.3%, while 66.7% projects no changes in interest rates. The next interest rate decision will be on May 7, 2025.

Probabilities for Interest Rate Decision, April 2025

What Will Be Happening With the U.S. Crude Oil Inventories?

Another crucial event to monitor is the release of U.S. crude oil inventories, also scheduled for April 9. These inventories serve as a vital indicator of economic activity. High oil demand typically aligns with strong economic growth, as both industries and consumers increase energy consumption. Conversely, a drop in demand may signal an economic slowdown. Recently, U.S. crude oil inventories surged by 6.037 million barrels for the week ending March 28, 2025, following a 4.6 million-barrel reduction the previous week, based on data from theAmerican Petroleum Institute. If the trend of rising inventories continues, it could signal slowing consumer demand and economic activity in the United States. Although lower crude oil prices might help curb inflation, they are unlikely to counterbalance the rising costs of other materials due to reciprocal tariffs.

The U.S. Crude Oil Inventory, May 2024 – March 2025

The recent tariffs have effectively reduced the oil demand, and when coupled with an increase in supply, this has resulted in a notable market impact. As a consequence, crude oil prices have decreased by 10.72% during the past five days.

OPEC+ members have indicated a measured strategy for increasing oil production. The cartel plans to boost production by an additional 411,000 barrels per day (bpd), alongside two previously scheduled monthly increments. This approach demonstrates OPEC+’s efforts to balance supply growth with market demand.

The forthcoming OPEC+ meeting on May 5th will be pivotal, as the group will evaluate the current market conditions and determine the production levels for June. In 2008, crude oil prices dropped to $37 per barrel. If the upcoming OPEC meeting does not result in a production cut, we could see oil prices dropping to between $50 and $53 per barrel. This drop would negatively impact major crude oil producers, including the United States.

WTI Price Development and Forecast

Source: Trading View, Ki-Wealth Research

Analyzing Key Economic Indicators: U.S. Core CPI and Jobless Claims

As we approachThursday, April 10, attention will focus on theU.S. Core Consumer Price Index (CPI)data andInitial Jobless Claims. The Consumer Price Index in the United States rose to 319.08 points in February, up from 317.67 points in January 2025. The annual inflation rate moderated to 2.8% in February, down from 3% in January, falling short of market predictions of 2.9%. On a monthly basis, the CPI increased by 0.2%, decelerating from 0.5% in January and falling short of market expectations of a 0.3% rise.

Looking ahead, the CPI is anticipated to rise by 1.4% quarter-over-quarter (2.88% year-over-year) to reach 323.61 points in Q2 2025. These projections suggest that inflation could remain persistently high, potentially influenced by tariff impacts.

The U.S. CPI Quarterly Forecast 2025

Regarding the U.S. Initial Jobless Claims, a decline of 6,000 was recorded, bringing the total to 219,000 for the week ending March 29, surpassing market expectations of 225,000, and maintaining historically low levels. However, continuing claims increased by 56,000 to 1,903,000, the highest since November 2021, exceeding forecasts and indicating challenges for unemployed individuals reentering the workforce.

Claims filed under programs for Federal government employees dropped by 257 to 564, despite scrutiny due to layoffs by the Department of Government Efficiency (DOGE). Reports suggest that many of these dismissals included severance packages, delaying eligibility for benefits. The U.S. Department of Labor anticipates a significant rise in initial jobless claims in Q2 2025, potentially reaching 260,000, marking the highest figure since October 2024.

The U.S. Initial Jobless Claims, Quarterly Forecast, 2025

Key Insights Awaited from ECB’s April 11 Address

On Friday, April 11, all eyes will be on the European Central Bank (ECB) as it provides crucial insights into its stance on tariffs. This speech is anticipated to shed light on the euro area’s economic outlook, encompassing growth projections and the influence of recent global events. Christine Lagarde, President of the European Central Bank (ECB), is expected to elaborate on the current monetary policy, including recent rate cuts and their impact on inflation and economic growth. The tone and key focus areas of this address will be vital in understanding the ECB’s perspective on interest rates. These insights are likely to have significant implications for the EU stock market.

Trading Plan for the Week: Charting the Course

In myearlier analyses, I’ve noted a downward trend in the stock market, which I anticipate will persist. While we might experience occasional flat or slightly positive days, these are likely to be temporary recoveries, often described as “dead-cat bounces,” driven by the market being significantly oversold.

Currently, it’s improbable that Trump will renegotiate the existing tariffs into more favorable terms during the week of April 7-11, 2025. The recent imposition of extensive tariffs on nearly all imports has ignited an escalating trade war. In response, China has implemented reciprocal tariffs on all U.S. goods, with other nations expected to follow suit.

The atmosphere remains tense, with a focus on enforcing current tariffs rather than renegotiating them. I anticipate that several countries will announce retaliatory tariffs on U.S. imports in the coming week:

• European Union (EU):Likely to announce a 20% tariff on U.S. goods and services imports.
• Vietnam:Expected to impose a 46% tariff.
• Bangladesh:Likely to impose a 37% tariff.
• Indonesia:Expected to impose a 32% tariff.
• Taiwan:Likely to impose a 32% tariff.
• India:Expected to impose a 26% tariff.
• South Korea:Likely to impose a 25% tariff.
• Japan:Expected to impose a 24% tariff.

However, trade dynamics can be unpredictable, and negotiations could arise if there is substantial pressure from affected industries or political stakeholders.

Considering the global macroeconomic situation, I expect indices to trend lower.For the S&P 500, a key resistance level exists at 4,880.8, aligning with a 61.8% Fibonacci retracement. Given the highly oversold conditions indicated by the Relative Strength Index (RSI), a positive rebound during the first two trading days of the week is possible. Trading is likely to occur within the range of 5,292 – 5,016. If you hold loss-making positions in speculative or overvalued stocks, it would be prudent to close these during rebounds. The current strategy should focus on maintaining a cash position and reducing equity investments.

S&P 500 Index Daily Technical Chart Analysis

Source: Ki-Wealth Analysis, Trading View

Nasdaq 100 Index: Nosedive is Continuing

The Nasdaq 100 Index is currently facing challenges, with recent trading activity indicating an oversold market. Over the last five trading days, the technology sector has seen a significant decline of 11.4%. This downturn may lead to short-lived recoveries, often referred to as “dead-cat bounces.” However, further declines are likely, with the 200-day Exponential Moving Average (EMA) at approximately 16,054.17 potentially being reached in the coming weeks. This scenario is especially plausible if tariff retaliations, as mentioned earlier in the report, come into play. The trading strategy for the Nasdaq 100 mirrors that of the S&P 500 companies.

Nasdaq 100 Index Weekly Technical Chart Analysis

Source: Ki-Wealth Analysis, Trading View

Stocks on the Radar: Potential Movers for April 7-11, 2025

In the upcoming week, we anticipate the following companies to announce their reports:

Monday:LEVI, RCAT, PLAY

Tuesday:AEHR, MOV, RPM

Wednesday:STZ, DAL, LAKE, SMPL

Thursday:KMX, WBA,BYRN, LOVE

Friday: JPM, WFC,PGR, BLK, FAST, UNTY

Earnings Week: Key Insights and What to Watch

As the week unfolds, earnings reports will capture the attention of investors, starting withLevi Strauss (LEVI). The company is set to release its Q1 2025 earnings, with analysts forecasting an EPS of $0.28, a slight increase from $0.26 last year. However, revenue is expected to dip by 1.3% year-over-year to $1.537 billion. Investors will be closely monitoring how Levi Strauss tackles challenges like tariff impacts and regional sales declines, particularly in Europe and Asia.

Another company to keep an eye on isAehr Test Systems (AEHR). With the stock down 56.3% year-to-date and trading at a P/E of 9.72x, it will announce its Q3 fiscal 2025 results. As a significant player in semiconductor testing, Aehr’s performance could offer insights into broader trends in the semiconductor industry. Given the growing demand for semiconductors in various sectors, including electric vehicles and AI processors, Aehr’s results may signal potential growth opportunities. Investors should track this stock to gauge mid-term developments in the sector.

Fridaypromises to be an exciting day for trading as thebanking sectorkicks off its reporting season.JP Morgan (JPM)will lead the way, releasing its Q1 2025 earnings before the market opens. Analysts anticipate strong performance, with an EPS of $4.66, up from $4.44 in the first quarter of 2024, and a revenue increase of 5% year-over-year to $44.06 billion. Wells Fargo will follow suit. These results are pivotal, reflecting the financial sector’s health and broader economic conditions.

During this earnings season, I advise investors to adopt a neutral stance. Observe and wait for clearer market directions. It’s a time when patience is critical. Regardless of earnings reports, focus on a company’s future outlook and financial guidance. Consider joiningKi-Wealth’s premium servicefor detailed trading and investment strategies. As a Ki-Wealth client, you’ll enhance your chances of maintaining a profitable investment portfolio.

Ki-Wealth’s investment strategy for the week emphasizes a cautious, wait-and-see approach. Exercising patience, avoiding panic selling, and keeping cash readily available are considered the most prudent strategies at this time. Additionally, maintaining positions in high-dividend stocks may prove beneficial.You may also want to look at our recommended tips during thebear market here >>

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