Economic Data and Market Highlights
Sentiment turned sharply this week as the Trump administration announced sweeping new tariffs, including a 10% baseline tariff on all imports. According to the Wall Street Journal, the initial round of tariffs will go into effect April 5, with targeted measures rolling out as early as April 9. While the policy is being framed as a move to revitalize domestic manufacturing and reduce dependence on foreign supply chains, it’s already introducing substantial uncertainty across global markets as the MSCI All Country World Index plummeted -7.86%. The S&P 500 traded down -9.05% for the week after falling -10.5% on Thursday and Friday, pushing the 12-month return into negative territory -0.08% and it’s three-year return to -5.07%, lower than Germany’s and India’s return over that same period, 10.93% and 5.65% respectively.
Gold has risen 14.93% on a year-to-date basis as investors believed the impending tariff would have an impact on the US Dollar. Interestingly, bitcoin meant to be a hedge against the dollar rose only slightly on this week’s news and is down -10.15%. The decline is largely due to policy volatility within the US administration related to the implementation of a bitcoin reserve. The one-year return of gold and bitcoin were similar, +22.47% and +31.49% respectively, and over three-years, +16.21% and + 22.32% respectively.
On Friday, non-farm payrolls were release increasing 228k versus the 140k estimate with the prior month being revised down-48k to 117k. It’s expected that this will likely be the last positive number as the Challenger Gray and Christmas report noted a significant rise in job cut expectations. This seems to be in line with the decline in the ISM manufacturing and services are result showing a pullback in employment.
After a relatively upbeat first quarter for dealmakers, sentiment turned sharply negative. While tariffs are being framed as a move to revitalize domestic manufacturing and reduce dependence on foreign supply chains, it’s already introducing substantial uncertainty across global markets and few sectors feel it more immediately than M&A.
As reported by Financial News London, deal advisors are sounding the alarm. The abrupt introduction of broad-based tariffs adds a layer of complexity to deals that many are simply unwilling to accept in the short term. Cross-border M&A is already facing higher scrutiny from regulators and geopolitical tension and now carries the added challenge of forecasting future input costs in a volatile tariff environment. This undermines confidence in post-merger synergy estimates and makes valuation more art than science. Several advisory firms have noted a sharp drop in inquiries related to large-scale international acquisitions, and some transactions already in the pipeline may be delayed or abandoned altogether.
What does this mean for the deal landscape? We’re likely to see a pullback in mega-deals, especially those above the $10 billion mark. These types of transactions often involve complex global supply chains and foreign regulatory considerations, both of which are now more unpredictable. Expect private equity to pivot, targeting distressed assets or domestic roll-ups where operating risk can be better controlled. From a sector perspective, the impact will likely be uneven. Industrials, consumer goods, and hardware-focused tech are industries that rely heavily on international sourcing and scale and will most likely face the greatest headwinds. Sectors with more localized supply chains and recurring revenue models such as healthcare, software, and business services may emerge as relative safe havens. These industries are less sensitive to trade disruptions and could even see M&A activity accelerate as capital seeks more stable ground. Tariff-driven volatility may dislocate valuations in the near term, but for investors with a longer horizon and the ability to underwrite complex risk, these moments often open the door to strategic opportunity. Valuation gaps tend to widen in periods of uncertainty, and that creates space for capital with conviction to go to work.
In short, the return of tariffs is reshaping the M&A playbook and not just for this quarter, but potentially for the foreseeable future.
The Past Week’s Notable US data points (with revisions)
The Upcoming Week’s notable US data points
Source: Morningstar
Data Source: Financial News London, Financial Times, Morningstar, MarketWatch, Standard & Poor’s, and the Wall Street Journal.
Authors:
Jon Chesshire, Managing Director
Michael McNamara, Analyst