Market Outlook This Week: Tariffs Could Trigger Inflation and Recession Fears

by | Mar 30, 2025 | The Doctor's Dose

This Week’s Market Outlook: Tariffs Trigger Inflation and Recession Fears

As the new trading week begins, investors are bracing for turbulence. The dominant theme: tariffs trigger inflation and recession fears. Goldman Sachs issued a stark warning this weekend, noting that a new wave of proposed tariffs could spike consumer prices, depress economic growth, and increase the probability of a U.S. recession.  Read the full CNBC article

What’s Driving Market Volatility

Tariffs trigger inflation and recession fears

Goldman Sachs Warning on Tariffs

According to Goldman Sachs economists, the proposed trade measures, including potential auto import tariffs and increased levies on Chinese goods, could shave off as much as 0.4% from GDP over the next year. More importantly, they stress that tariffs trigger inflation and recession fears by increasing costs for businesses and consumers.

Economic Reports to Watch

Several high-impact economic indicators this week could amplify concerns that tariffs trigger inflation and recession fears:

  • ISM Manufacturing PMI (April 1) – A critical read on supply chain stress.

  • ADP Employment (April 2) – Will hiring slow in anticipation of rising costs?

  • Non-Farm Payrolls (April 4) – A major gauge of labor market strength.

These reports will either confirm or contradict the recession narrative Goldman Sachs warns about.

Technical Market Signals

The S&P 500 and Nasdaq closed last week below their 200-day moving averages. This bearish signal comes as tariffs trigger inflation and recession fears across multiple sectors. Market breadth is narrowing, and traders are shifting toward defensive plays like utilities and consumer staples.

Earnings That Matter This Week

Traders will closely watch:

  • PVH Corp and RH for signs of consumer strength

  • Lamb Weston for margin compression due to higher input costs

If earnings guidance starts referencing tariff-related inflation, expect more downside.

Trading Strategy Focus

For active traders, the narrative that tariffs trigger inflation and recession fears suggests:

  • Tighten stop losses and reduce trade sizes

  • Focus on volatility breakouts early in the session

  • Avoid holding positions through macroeconomic data releases

If you’re a War Room or Boot Camp student, refer to the Volatility Band Trading Plan to guide setups during uncertain weeks like this.

Final Thoughts

This week’s market sentiment will likely be driven by the idea that tariffs trigger inflation and recession fears. With technical indicators aligning with macroeconomic risks, traders should be nimble, data-driven, and ready to act on fast-moving setups.