Reciprocal tariffs started last night. Markets remain hesitant as financial conditions tighten, but agree with Newton that near-term probabilities favor a rally.

In this written report on the stock market outlook this week, Tom Lee, CFA, examines how newly implemented reciprocal tariffs between the United States and China, along with tightening financial conditions, are shaping equity market behavior in early April 2025. He reviews the market’s intraday volatility surrounding President Donald Trump’s executive order imposing elevated tariffs on Chinese imports, discusses how this trade policy differentiates between China and other key trading partners (including Canada, Mexico, the European Union, Japan, South Korea and Vietnam), and outlines two broad macro paths for the global economy and corporate profits depending on how tariff negotiations evolve.

Lee details potential macro and policy offsets investors are watching—such as bilateral trade agreements, possible central bank easing, moves in oil and gasoline prices, and business community engagement with the White House. A calendar of upcoming U.S. economic data releases for April 2025 (including CPI, PPI, payrolls, retail sales and housing indicators) is provided, along with links to Fundstrat’s SMID “Granny Shot” stock list, with full analysis and charts available to subscribers.

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