Stocks closed sharply lower yesterday. The major indexes trimmed about a third off their worst intraday levels by the close, but still managed to finish down by roughly -2.5%. for the day.

Tariff concerns, of course, weighed on stocks.

But President Trump's ramped up rhetoric yesterday showing his displeasure with the Fed, and in particular, Fed Chair Jerome Powell, unnerved the market.

The President has been calling for interest rate cuts for a while. And after the European Central Bank (ECB) on Thursday, cut interest rates by another 25 basis points (the third cut this year, and the seventh cut out of eight meetings), the President began airing his grievances with the Fed moving too slow on rate cuts.

It's believed that advisors close to the President have dissuaded him from firing Mr. Powell. But the pressure campaign to get the Fed to act preemptively on rates, rather than waiting until it's too late, continues.

Not much in the way of economic reports out yesterday.

But today we'll get the Richmond Fed Manufacturing Index, and the Money Supply report.

We'll also hear from Fed policymakers Philip Jefferson, Patrick Harker, Neel Kashkari, Thomas Barkin and Adriana Kugler.

Earnings season has already unofficially begun. While less than 10% of the companies in the S&P have reported so far, the results are up 6.9% on earnings and 5.8% on sales vs. this time last year.

If the rest of the quarter turns out like that, that would be welcome news.

But it should not come as a surprise. Q1 earnings are forecast to be up 6.8%; Q2 up 8.6%; Q3 up 15.6%; and Q4 up 9.8%.

Ironically, while everyone frets over tariffs and the concerning drop in Q1'25 GDP estimates, the earnings picture looks excellent, as none of those fears are showing up in the aggregate earnings estimates.

Although, particular attention will be given to their forward outlooks and their views on how tariffs might affect their earnings in the coming quarters.

Since stocks typically go up during earnings season, there's a degree of optimism that we can start heading back up as earnings season kicks into gear.

But what could really galvanize the market would be some good news on tariffs, especially an announcement of some of the deals that the administration has been negotiating with some of our strategic partners. Same goes for any kind of breakthrough or easing of trade tensions with China.

See you tomorrow,