At a glance

Investor sentiment weakened last week amid tariff uncertainty ahead of this week’s planned announcements.

Number of the week:

4.6%

The savings rate among U.S. consumers in February, up from 4.3% in January.

Term of the week:

Data center

A large group of networked computer servers typically used by organizations for the remote storage, processing, or distribution of large amounts of data.

Quote of the week:

Consumer sentiment surveys slipped further in March. The Conference Board’s Consumer Confidence Index fell to its lowest level since January 2021 and the Michigan Consumer Sentiment Index fell to its lowest since November 2022, highlighted by rising inflation expectations. The reports highlighted worries about tariffs and trade policy along with inflation.

Robert Haworth, CFA, Senior Vice President, Senior Investment Strategy Director, U.S. Bank

Global economy

Quick take: Slowing inflation and solid domestic demand growth likely helps the U.S. economy achieve a soft landing in 2025.

Our view: Tariffs pose some risks to slow but improving growth in developed markets, including the eurozone, the United Kingdom (U.K.) and Japan. Emerging markets remain diverse as trade policies take center stage while China struggles to rekindle consumer demand.

Equity markets

Quick take: Tariff uncertainty, persistent inflation, waning consumer confidence and moderating earnings growth expectations are weighing on investor sentiment as the first quarter draws to a close.

Our view: Despite tariff-related headwinds, there remains much to like about equities. Broad market valuations are elevated yet short of extremes, interest rates are steady and earnings projections for 2025, despite recent downward revision trends, still reflect robust year-over-year growth.

Bond markets

Quick take: Treasury bond prices were roughly unchanged last week, with short-term Treasury yields rising and long-term Treasury yields falling slightly. Corporate and municipal bond prices fell as trade policy uncertainty weighed on investor risk appetite, although riskier high yield corporate bonds have still delivered positive returns year-to-date.

Our view: High-quality bonds continue to represent an important component of diversified portfolios. We see opportunities for incremental income and return potential in structured credit, such as non-agency mortgages and collateralized loan obligations, which have solid fundamentals and structural protection against credit losses.

Real assets

Quick take: Publicly traded real estate investment trusts (REITs) delivered positive returns last week and outperformed the broader equity market year-to-date. Commodity prices broadly increased, with precious metals like gold and silver benefiting from geopolitical uncertainty, while copper and oil rose amid tariff uncertainty.

Our view: Publicly traded real estate investments can generate substantial income. Most property types exhibit constructive fundamentals with gradually expanding economic activity supporting rent growth.

Based on our strategic approach to creating diversified portfolios, guidelines are in place concerning the construction of portfolios and how investments should be allocated to specific asset classes based on client goals, objectives and tolerance for risk. Not all recommended asset classes will be suitable for every portfolio. Diversification and asset allocation do not guarantee returns or protect against losses.

Past performance is no guarantee of future results. All performance data, while obtained from sources deemed to be reliable, are not guaranteed for accuracy. Indexes shown are unmanaged and are not available for direct investment. The S&P 500 Index consists of 500 widely traded stocks that are considered to represent the performance of the U.S. stock market in general. The NASDAQ Composite Index is a market-capitalization weighted average of roughly 5,000 stocks that are electronically traded in the NASDAQ market. The Personal Consumption Expenditures (PCE) Price Index is a measure of the prices that people living in the United States, or those buying on their behalf, pay for goods and services. It is known for capturing inflation (or deflation) across a wide range of consumer expenses and reflecting changes in consumer behavior. The Conference Board is a nonprofit research organization that distributes vital economic information to its peer-to-peer business members. The S&P Global Purchasing Managers' Index data are compiled by IHS Markit for more than 40 economies worldwide. The monthly data are derived from surveys of senior executives at private sector companies. The Michigan Consumer Sentiment Index is a monthly survey of consumer confidence levels in the United States conducted by the University of Michigan. The survey is based on telephone interviews that gather information on consumer expectations for the economy.

Insights from our experts

How we approach your long-term investing success

We use a data- and process-driven three step methodology to develop an investment strategy unique to you.

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Persistently higher prices continue to weigh on consumers and policymakers alike.

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Disclosures

Investment products and services are:
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U.S. Wealth Management – U.S. Bank is a marketing logo for U.S. Bank.

This information represents the opinion of U.S. Bank Wealth Management. The views are subject to change at any time based on market or other conditions and are current as of the date indicated on the materials. This is not intended to be a forecast of future events or guarantee of future results. It is not intended to provide specific advice or to be construed as an offering of securities or recommendation to invest. Not for use as a primary basis of investment decisions. Not to be construed to meet the needs of any particular investor. Not a representation or solicitation or an offer to sell/buy any security. Investors should consult with their investment professional for advice concerning their particular situation. The factual information provided has been obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness. U.S. Bank is not affiliated or associated with any organizations mentioned.

Based on our strategic approach to creating diversified portfolios, guidelines are in place concerning the construction of portfolios and how investments should be allocated to specific asset classes based on client goals, objectives and tolerance for risk. Not all recommended asset classes will be suitable for every portfolio.

Diversification and asset allocation do not guarantee returns or protect against losses.

Past performance is no guarantee of future results. All performance data, while obtained from sources deemed to be reliable, are not guaranteed for accuracy.

Equity securities are subject to stock market fluctuations that occur in response to economic and business developments.

International investing involves special risks, including foreign taxation, currency risks, risks associated with possible differences in financial standards and other risks associated with future political and economic developments. 

Investing in emerging markets may involve greater risks than investing in more developed countries. In addition, concentration of investments in a single region may result in greater volatility.

Investments in fixed income securities are subject to various risks, including changes in interest rates, credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications and other factors. Investment in fixed income securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term securities. Investments in lower-rated and non-rated securities present a greater risk of loss to principal and interest than higher-rated securities.

Investments in high yield bonds offer the potential for high current income and attractive total return, but involve certain risks. Changes in economic conditions or other circumstances may adversely affect a bond issuer’s ability to make principal and interest payments.

The municipal bond market is volatile and can be significantly affected by adverse tax, legislative or political changes and the financial condition of the issues of municipal securities. Interest rate increases can cause the price of a bond to decrease. Income on municipal bonds is free from federal taxes, but may be subject to the federal alternative minimum tax (AMT), state and local taxes.

There are special risks associated with investments in real assets such as commodities and real estate securities. For commodities, risks may include market price fluctuations, regulatory changes, interest rate changes, credit risk, economic changes and the impact of adverse political or financial factors. Investments in real estate securities can be subject to fluctuations in the value of the underlying properties, the effect of economic conditions on real estate values, changes in interest rates and risks related to renting properties (such as rental defaults).

The information provided represents the opinion of U.S. Bank and is not intended to be a forecast of future events or guarantee of future results. It is not intended to provide specific investment advice and should not be construed as an offering of securities or recommendation to invest. Not for use as a primary basis of investment decisions. Not to be construed to meet the needs of any particular investor. Not a representation or solicitation or an offer to sell/buy any security. Investors should consult with their investment professional for advice concerning their particular situation.

U.S. Bank and its representatives do not provide tax or legal advice. Your tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation.