Today was a good day for stock investors as the major indices—the Nasdaq 100 (QQQ), the S&P 500 (SPY), and the Dow Jones Industrial Average (DIA)—finished today’s trading higher. Interestingly, the tech sector (XLK) was the session’s leader, while the consumer staples sector (XLP) was the laggard. In addition, across all three ETFs, trading volume was higher than the average, which suggests that today’s optimism was stronger than yesterday’s
Separately, in March 2025, new home sales in the U.S. rose by 7.4% from the previous month, reaching an annual rate of 724,000. This easily beat the forecast of 684,000 and was 6% higher than the same time last year. The median price of new homes dropped to $403,600, which is 1.9% lower than in February and 7.5% lower than in March 2024. On the other hand, the average price rose slightly to $497,700. There were 503,000 new homes for sale at the end of March, up from February and last year. This equals about 8.3 months of supply—less than February, but more than last March.
At the same time, businesses are getting more concerned about inflation. The Atlanta Fed’s April survey showed that companies expect prices to rise 2.8% over the next year, up from 2.5% in March. Even though the average cost increase over the past year has dropped to 2.2%, future cost expectations are still higher than before the pandemic. Many companies also reported that their current sales and profit margins are lower than normal, which suggests that they are still feeling the effects of a weaker economy.
On top of that, economists are warning that tariffs could hurt the U.S. economy. According to Apollo’s chief economist Torsten Sløk, trade wars usually lead to stagflation, where prices go up but growth slows down. This happens because tariffs raise costs for consumers and hurt business profits. Sløk added that this could cause interest rates to stay high and push stock prices down. If trade restrictions keep increasing, they could make it harder for the Federal Reserve to manage inflation while keeping the economy stable.