Today was another down day for stock investors as the major indices — the Nasdaq 100 (QQQ), the S&P 500 (SPY), and the Dow Jones Industrial Average (DIA) — resumed their downward trajectory after yesterday’s historic rally. This led to significantly higher than usual volumes across all three ETFs, with the SPY seeing the highest at around 139.24 million shares traded. For reference, the average is 68.61 million.
Earlier today, the latest Consumer Price Index (CPI) report showed that inflation cooled in March, with headline CPI unexpectedly falling 0.1% compared to February’s 0.2% rise. On a year-over-year basis, CPI increased by 2.4%, lower than expected. Core CPI, which excludes food and energy, rose just 0.1% month-over-month and 2.8% year-over-year, which was the smallest 12-month rise since March 2021.
While falling gas prices played a major role in the overall decline, costs for electricity, natural gas, and food all increased. Analysts say these numbers may bring slight relief to the Federal Reserve, although the full impact of new tariffs isn’t reflected yet.
Separately, initial jobless claims for the week ending April 5 rose slightly by 4,000 to 223,000 to match expectations. The four-week moving average remained unchanged at 223,000, suggesting that the labor market is stable for now. In addition, continuing unemployment claims fell to 1.85 million, slightly below estimates. Still, unadjusted initial claims rose more than expected as certain sectors may be slowing down, especially as businesses try to figure out how to deal with rising costs and global trade uncertainty.
Furthermore, Chicago Fed President Austan Goolsbee warned that tariffs are a “stagflationary shock” that are disrupting both price stability and employment. He said there is no clear playbook for the Federal Reserve to handle such a situation and stressed that rate decisions need to be made carefully. Goolsbee expects interest rates to fall over the next one to two years but said that the road ahead will be bumpy. While the economy is still showing strength in key data like productivity, the uncertainty around trade policy and its inflationary impacts could cloud the Fed’s outlook.