Markets roil under tariff fears
April 7, 2025
US equities closed their worst week since 2020 on Friday, as China announced retaliatory tariffs on the US, leading to concerns about a global economic slowdown.
Crude oil prices continue to decline on worries about a recession and slow global demand with concerns about a trade war between the US and most other nations. Crude traded to a multi-year low and that created some buying of crude and energy products. All markets have been feeling the impact of all the tariffs being imposed.
In today’s world, news travels fast and markets react and move fast as well. These markets have had a few intense days of trading after the announced tariffs and the markets are trying to digest all this information and news. This will continue as we move forward and other countries counter US policies. The markets will continue to be volatile and move on the headlines. We need to remember that there are always those out there looking for value and the opportunity to buy. After the substantial sell-off, these markets have already seen some markets drop to multi-year lows, which will create some buying. Markets will bounce, and then the big question becomes, is this the bottom? Is the move down over? We have seen this already as energy markets have bounced off the low put in earlier today. It is much too early for this market to call a bottom but that doesn’t stop some buyers.
Oil prices traded to a four-year low. WTI crude oil futures fell about 12% in just two days.
Baker Hughes reported that oil rigs increased by 5 to 489 this past week to their highest level since June.
We have gotten revisions to the energy price forecast from a few of the big investment banks. Goldman Sachs lowered its forecast for crude’s average price this year by 5.5% to $69 per barrel and for WTI prices by 4.3% to $66 per barrel, citing the risks of higher OPEC+ supply and the global trade war triggering a recession. HSBC cut its 2025 global oil demand forecast from 1 million bpd to 900,000 bpd, citing tariffs and the OPEC+ decision.