Global Highlights This Week: Trump's Tariff Policies Fluctuate, ASML and TSMC to Release Earnings Reports

Last week can be said to have been one of the most turbulent weeks in the history of Wall Street. The S&P 500 Volatility Index (VIX), known as the "fear index," once rose above 60, reaching its highest level since August last year.

Looking at the weekly chart, the S&P 500 gained 5.7% last week, marking its best single-week performance since November 2023; the Dow Jones Industrial Average rose 4.95%, and the Nasdaq Composite Index increased by 7.29%. Most of the gains came from the rebound on Wednesday, with the Nasdaq surging by more than 12% on that day.

Analysts believe that this intense volatility is likely to continue this week, as the weakening of the US dollar and the intensification of the sell-off of US Treasury bonds have exacerbated the uncertainty in the market brought about by Trump's tariff measures.

Last Thursday, Trump threatened that if countries could not reach an agreement with the United States, he would change the practice of suspending the "reciprocal tariffs" for 90 days on certain countries and restore the tariffs to a higher level. However, late at night on April 11 local time, the US Customs and Border Protection issued a notice stating that smart phones, routers, and some computers and laptops would no longer be included in the 125% "reciprocal tariffs" scope. This exemption policy applies to goods entering the United States after April 5, and companies that have already paid tariffs can apply for a refund.

Mark Luschini, Chief Investment Strategist at Janney Montgomery Scott, said that due to investors weighing how to incorporate the economic impact brought about by the changes in the tariff background into their considerations, the current stock market is "very unstable." Luschini said that the market is "somewhat trapped by latent uncertainties. Therefore, most investors are reluctant to make large bets in either direction."

This week, the Q1 earnings season for US stocks kicks off. Goldman Sachs, Johnson & Johnson, ASML, Taiwan Semiconductor Manufacturing Company (TSMC), Netflix, and other companies will be the first to release their earnings reports, which will pose new tests for investors. This Friday, the stock markets in the United States and many European countries will be closed for one day.$GS $JNJ $ASML $TSM $NFLX

Bryant VanCronkhit, a senior portfolio manager at Allspring Global Investments, said that he will look for companies that can still have confidence in their businesses despite the changes in the tariff situation.

In terms of data, the US retail sales data, known as the "scary data," will be released on Wednesday, which will help the outside world understand the health of consumers. A report released by the University of Michigan last Friday showed that consumer confidence has dropped to its lowest level in nearly three years.

The Bank of Canada and the European Central Bank will announce their interest rate decisions on Wednesday and Thursday this week respectively. The market expects that the Bank of Canada will keep the interest rate unchanged, while the European Central Bank is likely to cut the three major interest rates by 25 basis points each. On the same day, Federal Reserve Chairman Jerome Powell will deliver a speech at the Economic Club of Chicago.

An overview of important events this week:

Monday : OPEC releases its monthly crude oil market report, and the 1-year inflation expectation of the Federal Reserve Bank of New York for March is announced.
Tuesday : Richmond Fed President Thomas Barkin delivers a speech on "Navigating Through the Economic Fog", Philadelphia Fed President Patrick Harker speaks about the role of the Federal Reserve, Atlanta Fed President Raphael Bostic gives a speech on monetary policy, the Reserve Bank of Australia releases the minutes of its April monetary policy meeting, the International Energy Agency (IEA) releases its monthly crude oil market report, and the ZEW Economic Sentiment Index for the Eurozone in April is released.
Wednesday : The final annual rate of the Eurozone's CPI for March is released, the monthly rate of the US retail sales for March is announced, the monthly rate of the US industrial production for March is announced, the Bank of Canada announces its interest rate decision and monetary policy report, the NAHB Housing Market Index for the US in April is released, and the EIA crude oil inventory for the week ending April 11th in the US is announced.
Thursday : Cleveland Fed President Loretta Mester participates in a Q&A session, Federal Reserve Chairman Jerome Powell delivers a speech at the Economic Club of Chicago, Kansas City Fed President Esther George and Dallas Fed President Lorie Logan have a fireside chat on the US economy and the banking sector, the European Central Bank announces its interest rate decision, the initial jobless claims for the week ending April 12th in the US are announced, and European Central Bank President Christine Lagarde holds a monetary policy press conference.
Friday : The annual rate of Japan's core CPI for March is released, and San Francisco Fed President Mary Daly gives a speech.