On October 26, 1985 Marty McFly jumped into the plutonium-fueled DeLorean and headed back to 1955. Almost 40 years later, President Trump time traveled back to April 2025, not for Back to the Future Part IV, but for Tariff War Part We Lost Track. Coming in to Friday's trading day, the Word of the Week was…"Records". This week saw the S&P 500 set new record highs for both its intraday and closing price. These broke the prior records that were set all the way back…last week. In fact, the S&P had finished 11 of the past 15 weeks at record highs and has set intraday records in each of the past 6 weeks and 13 of the past 15. Records weren’t just for the equity markets though. Gold continued to set new record highs as it smashed through $4,000 per ounce. Bitcoin also briefly set records. Friday morning the S&P was looking at a gain of 0.3% for the week. However, the pieces were set in place on Thursday for a move lower when China added more restrictions on rare earth exports. Friday morning President Trump took to social media to say it was a "sinister move" and that there seemed to be no reason now to go ahead with a planned meeting with President Xi in two weeks. He was also calculating a massive increase of Chinese tariffs. Equities sold off sharply. The S&P dropped almost 3%, suffering its worst loss since, yup, the tariff-tinged April. After the close, Trump announced the US would impose 100% tariffs on China starting November 1, as well as export controls on software. Futures took a another leg lower after-market. There were sharp moves lower to most sectors and to Tech (NYSE FANG+ down ~4%, ICE Semis down ~6%) and Discretionary in particular. Energy got hit as oil fell out bed. The mega caps in Discretionary were down 5%. The flight to safety kicked in as Staples managed to post a modest gain in the middle of the carnage, with food and beverage names holding up well in general. As we put this day to bed and look to next week, we'll now be watching for updates on the China situation. We don't expect much news on the shutdown as the Senate is in recess until Tuesday. Federal Reserve data will continue to be released and we'll see a lot of Fed speakers before the blackout starts at the end of the week. Q4 earnings season kicks off with the Financials taking their customary place at the tip of the spear. Most importantly for next week, Happy Birthday Devon!!!!

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