Trade Talks Calm Jitters, Job Market Still Strong

2025-04-25

Alex Cousley, CFA

Director, Senior Portfolio Manager

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Tariff tracker
Economic insights
Geopolitics and central banks

Key takeaways

U.S. starts trade talks with South Korea, Japan
Tariffs on China could be lowered
U.S. labor market looks solid

On the latest edition of Market Week in Review, Director and Senior Investment Strategist Alex Cousley unpacked the latest headlines on trade and U.S. economic data.

Trade progress

Cousley opened by noting it’s been a better week for equity markets, with the S&P 500 up around 4% through Thursday’s close. A key reason for this is some encouraging developments in the trade war, he said.

“Earlier this month, we stated that many Asian countries (besides China) would probably try to strike quick trade deals with the United States. This appears to be what’s happening now,” Cousley remarked. He explained that the U.S. has made progress in trade conversations with both Japan and South Korea. Treasury Secretary Scott Bessent even noted that South Korean officials brought their “A game” to the table in the latest round of talks, Cousley said.

On the China front, he said the Trump administration’s tone moderated slightly this week, with Bessent saying the current tariff rate on Chinese imports was unsustainable. White House officials later suggested this rate could be negotiated down to 50-60%—a significant drop from the current 145% level.

Strength in numbers

Cousley finished by noting the theme of “soft” soft data and “hard” hard data proved true again this week. The latest soft data—including a handful of PMI and regional Fed surveys—remained weak, while the University of Michigan’s survey on consumer sentiment indicated widespread pessimism, he said.

On the flip side, the hard data continued to hold up well. As evidence, Cousley pointed to the latest U.S. jobless claims numbers, which still appear relatively healthy. “This suggests there isn’t much strain coming through in the labor market,” he noted. Cousley added that new job openings posted on Indeed continue to look solid.

“Overall, we’re not seeing signs yet that the lack of business confidence is flowing through to layoff decisions or cutbacks in hiring,” he concluded.

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