6% Drop & No Clear Bottom – Is This Just the Beginning?

Markets just had their worst day in years. With tariffs flaring and volatility rising, here’s what traders are watching now.

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Market Mastery Digest
April 07, 2025

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The bear has emerged… but where is it heading?

OMG, Market Mastery crew! 👋

Brace yourself.

We just witnessed the biggest single-day drop in the S&P 500 since 2020 — a full-blown 6% plunge on Friday that sent shockwaves through Wall Street.

The trigger?

A perfect storm of Trump’s tariff bombshell, slowing job openings, and fears that the Fed’s hands are now tied.

But beneath the panic lies a story of pressure building, uncertainty rising, and opportunities starting to crack through the chaos.

Let’s dive into the carnage!

🟠 Monday: Tariffs Set the Tone

The week kicked off with a warning shot.

On Monday, futures tumbled as investors braced for more economic friction.

With the Trump administration signaling aggressive trade policy changes, the market started pricing in recession risks fast.

The S&P 500 wrapped Q1 with a red bow — its worst quarter since 2022, and sentiment was already shaky out the gate.

🟡 Tuesday: Confidence Slips, So Does the Labor Market

The ISM Manufacturing PMI slid to 49.0, showing contraction, while business confidence continued to erode.

Adding more weight, the latest JOLTS report revealed job openings fell to 7.57 million, the lowest since mid-2021.

Businesses are pulling back — and that’s not the vote of confidence traders wanted to see.

Then came April 2 — Liberation Day — when President Trump went all in on tariffs.

A blanket 10% duty on all imports, with a whopping 54% levy on Chinese goods, caught markets completely off guard.

Markets couldn’t shake off the fallout from Trump’s “Liberation Day” tariff shock.

Stock futures extended their losses early Thursday, and the downward pressure carried through the trading session.

The S&P 500 dropped another 1.7%, while the Nasdaq and Dow followed with significant losses.

Investors digested the implications of rising trade tensions and what it could mean for inflation, corporate margins, and global growth.

The mood? Defensive — and getting worse.

🚨 Friday: Jobs Strong, Tariff War Stronger

The March jobs report beat expectations with 228,000 new jobs, showing the U.S. labor market is still holding firm.

But the celebration didn’t last.

Hours later, China retaliated with 34% tariffs on U.S. imports, sparking panic across markets.

Fed Chair Jerome Powell responded cautiously, stating that the Fed is watching developments and that the tariffs pose a risk to both inflation and growth.

No policy moves were announced, but the tone was clear — uncertainty just became the new normal.

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FOMC Meeting Minutes

Investors will be reading between the lines for clues on whether Powell and the crew are leaning toward a rate cut — or holding steady as they watch the data unfold.

CPI Data & Fed Minutes – Inflation Pulse Check

Next week’s big focus? March CPI, dropping Thursday.

With the market on edge, any sign of sticky inflation could deepen the pain — or spark relief if the numbers cool.

Earnings Season Kickoff – The Micro Meets the Macro

Corporate earnings are back in play starting Friday.

Big banks like JPMorgan and Wells Fargo will set the tone.

After this week’s macro drama, the micro stories might matter more than usual.

After a week like this, it’s tempting to rush into “buy the dip” mode… or to flee the scene altogether.

But the truth is, we’re in uncertain territory.

Tariffs are back.

Inflation risks are rising.

And market momentum has flipped hard.

Sometimes the smartest play isn’t jumping in — it’s waiting it out.

Observing. Letting the noise settle.

We’re not calling bottoms.

We’re not calling tops.

We’re just staying sharp — and staying ready!