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Investors hope to get more clarity on tariffs on April 2

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Options market prices more volatility around "Liberation

Day"

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Impact of DOGE on jobs will be in focus on April 4 report

By Lewis Krauskopf and Carolina Mandl

NEW YORK, March 28 (Reuters) - A rocky U.S. stock market

will be tested in the coming week by a pivotal deadline for

President Donald Trump's tariff plans and an employment report

that could reveal a slowing economy.

The S&P 500 was on pace for its second straight week

of gains. Earlier this month, the benchmark index marked a

correction, dropping more than 10% from its record high.

Despite the modest rebound, the index remains down almost 7%

from its February 19 high as uncertainty over the health of the

U.S. economy and trade policy keeps investors on edge.

"April is going to have a lot of moving parts and probably a

lot of volatility following a really difficult March," said Eric

Kuby, chief investment officer at North Star Investment

Management Corp. "There's a lot of information that could move

markets in a variety of different directions."

Investors have been hoping the coming days will clarify

the tariff landscape. Trump has pointed to

April 2

for a broad batch of tariffs to be announced, including

"reciprocal" levies on countries, calling it a "Liberation Day"

for the U.S. economy.

The tariff situation has led Wall Street analysts to

pull back on economic and

corporate earnings forecasts

, while uncertainty over how trade policy will play out is

weighing on businesses and consumers.

A survey this week showed

U.S. consumer confidence

plunged in March to its lowest in more than four years,

with households fearing a recession and higher inflation because

of tariffs.

"Everybody wants clarity because however it plays out,

it gives the roadmap and we're going to adapt, adjust," said

Jack McIntyre, portfolio manager for Brandywine Global. "It's

this cloud of uncertainty that's creating some angst."

On Wednesday, Trump announced a 25%

tariff on auto imports

, a measure that could add thousands of dollars to the

average cost of a vehicle in the U.S. Shares in carmakers such

as General Motors ( GM ) and Ford tumbled on Thursday.

Data from options analytics service ORATS show the equity

options market pricing higher volatility for near-term S&P 500

option expirations, including contracts expiring on March 31 and

April 4, compared to those further out.

"Traders are paying a premium for near-term protection,"

Matt Amberson, principal at ORATS, said.

After back-to-back years of gains of over 20%, the S&P 500

is logging a 3.24% decline so far in 2025 as the end of the

first quarter nears. The index has lost its gains since Trump's

November election, which had stoked excitement on Wall Street

about the president's expected pro-growth agenda that has been

deflated by worries over tariffs.

The forward price-to-earnings ratio on the S&P 500 has

moderated to less than 21 times as of Wednesday, compared to

about 22 to start the year, but remains well above its long-term

average of 15.8, according to LSEG Datastream.

"We came into the year with an expensive market coupled with

high expectations. And now we're getting uncertainty," said Jack

Ablin, chief investment officer at Cresset Capital. "Those ...

don't work very well together."

Tariff worries have compounded concerns about the U.S.

economic outlook. Investors will focus on the monthly U.S. jobs

report due on April 4.

Employment growth is expected to have slowed in March to

128,000 from 151,000 in February, according to a Reuters poll.

One focus on Wall Street is how much light the jobs data

will shed on an effort led by Trump ally Elon Musk to reduce the

federal government workforce.

The end of the first quarter on Monday could bring asset

price fluctuations, as portfolio managers make last-minute

adjustments. Investors also will begin eyeing the start of

first-quarter earnings season, with reports arriving in earnest

later in the month.

"We're generally in a risk off environment. That's been the

tone since we've entered this correction phase," said Charlie

Ripley, senior investment strategist for Allianz Investment

Management. "So it remains to be seen whether we've seen the

bottom."