It’s Good Friday. US markets are closed today for the Easter weekend, and trading will resume on Monday. This morning we’re unpacking the rare disconnect between economic data and equities. Was this email forwarded to you? Join 190,000 self-directed investors and sign up here. 

What economic data?

The labor market is holding on to its strength of the last several years but you wouldn’t know it by looking at the stock market. 

On Thursday, the Labor Department reported weekly jobless claims hit 215,000, lower than the median estimate for 225,000, for the week ending April 12. Continuing claims climbed by 41,000 to 1.88 million, above the 1.87 million expected. 

Those numbers point to a softening but still-resilient labor market, with layoffs muted and employers still holding on to employees. 

US stocks traded lower shortly after the data published anyway.

Until very recently, jobs data was a reliable catalyst for equity traders. Updates on the unemployment rate, jobless claims, or payrolls would usually move equity indexes higher or lower, depending on which direction they surprised. 

President Trump’s tariff rollout has upended that classic connection. 

The S&P 500 is down more than 10% year-to-date, while the Dow and Nasdaq Composite have dropped 6.7% and 15.5%, respectively, as of Wednesday’s close. 

Yet little of that can be attributed to weakening economic data. 

“The economy is transitioning into a state of tariff-induced uncertainty,” said Morgan Stanley’s chief US economist Michael Gapen. “While the outlook remains clouded, incoming data suggests the economy is on relatively sound footing.”

The numbers on both jobs and inflation have so far held strong enough to start the year that some market-watchers, including the president, have urged the Federal Reserve to cut rates sooner than later. 

Jerome Powell, for his part, says the central bank remains in “wait and see” mode on account of tariffs. 

“Tariffs are highly likely to generate at least a temporary rise in inflation,” Powell said in prepared remarks Wednesday before the Economic Club of Chicago.

“The inflationary effects could also be more persistent. Avoiding that outcome will depend on the size of the effects, on how long it takes for them to pass through fully to prices, and, ultimately, on keeping longer-term inflation expectations well anchored.”

Economic data aside, the White House’s trade agenda has ignited fears of a global slowdown and rebounding inflation. The uncertainty has fueled historic volatility in the stock market.

Over recent weeks, the S&P 500 has gained and lost trillions in market value in a matter of minutes.

Only a few days ago the VIX — Wall Street’s so-called fear gauge — hovered at levels last seen at the start of the pandemic. Traders have struggled to digest the non-stop tariff updates. 

The present economy is clashing with its unknown outlook. Backwards-looking data suggest the jobs market is intact. Policy risks, though, continue to drive massive dislocations and knee-jerk reactions in markets. 

The job market hasn’t cracked, but its influence on stocks has waned. 

Market snapshot

Elsewhere:

🏦 President Trump wants Powell out. On Thursday the president posted on Truth Social that the Fed is “TOO LATE AND WRONG” on interest rates. A separate report from the Wall Street Journal said the president has privately discussed for months firing Powell from the Fed. (WSJ)

🏥 UnitedHealth stock dropped more than 20%. Earnings missed Wall Street expectations and the company sizably downgraded its projected results for the year, citing problems in its Medicare business. Thursday marked one of the worst days in history for its shareholders. (CNBC)

🔍️ A judge ruled Google a monopolist — again. Google stock slipped after a court said it violated antitrust law through its dominance of two online advertising markets. The company said it disagreed with the judge’s decision, though Google could be forced to divest its Ad Manager product. (Barron’s)

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About me:

📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

I write our flagship newsletter to prepare you for each trading day, unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else. Feedback? Reply to this email, ping me on X @philrosenn, or write me directly at phil@openingbellmedia.com.