Washington just rocked the markets with the largest tariff wave in decades — and investors didn’t take it lightly. From historic trade penalties to rising political tensions, last week brought a flurry of developments that moved markets across the board. In this edition of LevelFields Weekly News Wrap, we break down the key headlines, sector performance, and what to watch as we head into October.

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Massive Tariff Hikes Trigger Market Volatility

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The U.S. government announced sweeping tariff increases set to take effect on October 1:
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• 100% tariffs on pharmaceuticals
• 50% tariffs on kitchen cabinets, vanities, and furniture
• 25% tariffs on heavy trucks
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This marks the highest effective U.S. tariff rate in over 80 years, signaling a dramatic shift in trade policy.
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The market reaction was swift:
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• $3.8 billion in total outflows from U.S. equities
• Institutions flipped to net sellers for the first time in three months
• Hedge funds pulled another $2 billion after a brutal stretch the prior week
• Retail investors logged their third consecutive week of selling

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Shutdown Showdown: Political Risk Rises

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Alongside the trade turbulence, political tensions added fuel to the fire.
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• Former President Donald Trump threatened mass federal firings if no budget deal is reached by October 1.
• Democrats countered, demanding healthcare subsidies for undocumented immigrants, raising the stakes for a potential government shutdown.
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This standoff adds uncertainty heading into October, with major implications for consumer sentiment, federal programs, and market stability.

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Inflation Data Offers Relief

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Amid the chaos, there was at least one steady signal: inflation.
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• Core PCE came in at 2.9% year-over-year
• Headline inflation stood at 2.7%
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Both figures were in line with expectations, giving the Federal Reserve some breathing room. As of now, markets are still pricing in two more interest rate cuts by year-end.
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Meanwhile, consumer behavior remained resilient:
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• August personal spending rose 0.6%
• Jobless claims came in below expectations

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Markets Recover by Friday — But Still Finish Mixed

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Despite the selloff early in the week, markets stabilized into Friday:
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• S&P 500: +0.6% on the day, but -0.3% for the week
• Nasdaq: +0.4% on Friday, -0.7% for the week
• Dow Jones: +300 points Friday, finishing the week flat

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Gains came from:
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• Boeing: +3.6%
• Banks: Rebounded after prior weakness
• Chipmakers: Got a lift from new U.S. semiconductor production rules

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Safe Havens Surge, Crypto Slips

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As market uncertainty grew, traditional safe havens saw renewed interest:
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• Gold held near record highs
• Silver and mining stocks continued climbing
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Meanwhile, crypto assets fell:
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• Bitcoin: -2%
• Ethereum: -3.5%
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Traders appear less convinced that the Fed will aggressively cut rates, which weighed on digital assets.

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Sector Breakdown: Energy Dominates, Tech Lags

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A closer look under the hood shows how sectors performed last week:
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Top Performers:
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• Energy: +4%
  • Halliburton: +11.5%
  • EQT Corp: +9.7%
  • Texas Pacific Land: +9%
  • Devon Energy: +8%
• Utilities:
  • Xcel Energy: +9.8%
  • NextEra: +6.8%
  • Sempra, NiSource: Solid gains
• Real Estate: Slightly positive

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Weakest Sectors:
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• Materials: -2.1%
• Consumer Staples: -1.9%
• Healthcare: -1.3%
• Technology: Flat

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Looking Ahead: October Could Be Rocky

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With tariffs scheduled to kick in October 1 and a potential government shutdown looming, October could bring more volatility. Energy is showing leadership, but much of the market remains on edge — and investors will be watching for any shift in Fed commentary, labor data, and geopolitical developments.

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