Friday’s big stock stories: What’s likely to move the market in the next trading session

As investors brace for the upcoming trading session on Friday, April 4, 2025, several key developments are poised to influence market movements. The recent implementation of sweeping tariffs by President Donald Trump has introduced significant volatility, with widespread implications across various sectors.​

Market Reaction to New Tariffs

On April 3, President Trump announced comprehensive tariffs, including a universal 10% levy on all imports and higher rates targeting specific regions—20% on the European Union, 25% on South Korea, and 24% on Japan. These measures, dubbed "Liberation Day" tariffs, aim to protect U.S. manufacturing and address trade imbalances. However, the immediate market response was negative, with the Dow Jones Industrial Average dropping over 3.3% following the announcement. Investors expressed concerns about potential retaliatory actions from affected countries and the broader impact on global trade dynamics. ​

Investor Sentiment and Economic Outlook

The introduction of these tariffs has heightened fears of a potential recession within the next year. Economists warn that the combination of aggressive trade policies and existing economic vulnerabilities could create a "perfect storm," leading to significant economic downturns by 2026. Concerns center around increased inflation, disrupted supply chains, and reduced consumer spending. ​

Hedge Fund Strategies and Market Volatility

In response to the escalating trade tensions, hedge fund managers are adjusting their strategies to mitigate risks. Bradley Wickens, head of Broad Reach Investment Management, has reduced exposure to global credit markets and equities, increasing positions in safer assets such as U.S. and German government bonds and the Japanese yen. Wickens anticipates further declines in equity markets, estimating a 6% to 7% drop in the coming months as the full impact of the tariffs unfolds. ​

Impact on Retirees and Long-Term Investors

The market volatility has particularly unsettled retirees and those nearing retirement, who are concerned about the erosion of their investment portfolios. Financial advisors recommend maintaining a diversified portfolio and caution against making impulsive decisions in response to short-term market fluctuations. While immediate declines are unsettling, a long-term perspective remains crucial, as markets have historically rebounded from downturns. ​

Looking Ahead

As the market processes these developments, investors should prepare for continued volatility. Monitoring geopolitical responses, particularly potential retaliatory measures from affected trading partners, will be essential. Additionally, staying informed about policy adjustments and economic indicators will help investors navigate the uncertain landscape in the coming sessions.