Here is Schwab's early look at the markets for Friday, April 11:

Wholesale prices and bank earnings dominate proceedings to wrap up a historic week on Wall Street, with tariff worries still front and center as Friday begins after Thursday's sharp losses. Yesterday's decline followed news that tariffs on Chinese goods are actually 145%, higher than the 125% initially announced by the White House. Little sign of progress on that front kept stocks under pressure.

Turning away from trade, the March Producer Price Index (PPI) due ahead of the open is expected to show a flat headline PPI and a –0.1% core PPI. Core excludes volatile food and energy prices.

Yesterday's March Consumer Price Index (CPI) showed relatively mild inflation of –0.1% month over month for headline CPI and 0.1% for core,. Analysts had expected 0.1% and 0.3%, respectively. Core annual inflation rose 2.8% year over year, below 3.1% the prior month, representing progress. Stocks and bonds reacted little to the data, with focus still centered on the trade war with China.

In other data today, the preliminary April University of Michigan consumer sentiment report looms soon after the open and could get more attention than usual after recent sentiment and confidence data suggested a gloomy outlook for slower growth and higher inflation. The final March headline sentiment reading fell to 57.0, down from 79.4 a year earlier, and analysts expect today's 10 a.m. ET data to show 54.8. Investors will likely keep close watch on the inner workings of the report, especially year-ahead inflation expectations. Those rose to 5% in March, the highest since November 2022, and long-run inflation expectations jumped to 4.1% from 3.5% the prior month, the largest increase since 1993, according to Briefing.com.

Though some analysts downplay the importance of sentiment data, it's moved markets recently as it increasingly shows a "stagflationary" outlook. This particular report could also measure consumer sentiment in the early days of April just as Trump announced his "tariff liberation day" and the stock market dove.

Earnings season, led by banks today, is likely to feature strong first quarter results across sectors, but those won't matter much in light of recent trade developments that put more focus on economic numbers amid recession worries. Key earnings this morning include JPMorgan Chase (JPM), Wells Fargo (WFC), and Morgan Stanley (MS).

"I don't think we're going to get a lot of specific color on the outlook from companies," said Liz Ann Sonders, chief investment strategist at Schwab. "I think the consumption data and the labor market data is particularly important to watch," noting that consumption drives 68% of gross domestic product.

Bank earnings come at an auspicious time for the industry and the entire economy following the trade war set off last week by President Trump's tariffs. Bank stocks capsized on the news, not because tariffs directly affect banks, but because of the possible impact on banking clients and economic growth. Investors likely want to hear the latest thinking from industry executives today on what the 90-day delay and continued heavy tariffs against China might mean for the economy.

Another question is how much banks may have to set aside to account for possible defaults if the economy really worsens and companies can't pay their loans. That was a constant worry during the pandemic, with banks taking large provisions for credit losses in the billions of dollars. If this starts ramping up again, it would likely narrow industry profit margins.

Tremors continued in the Treasury market after a spike in yields earlier this week suggested investors might be less willing to buy U.S. Treasuries for their perceived safety. Treasury weakness Monday and Tuesday could also have reflected inflation concerns associated with tariffs, the need for liquidity, and investors heading to cash amid uncertainty.

Despite signs of slowing economic growth, the 10-year Treasury note yield hit 4.40% late Thursday, up from around 4% a week ago and raising more concern about the Treasury market's health. Yields rise when Treasuries fall, so today's relatively solid yield performance likely reflects little in the way of "safe haven" Treasury buying that's often seen in turbulent times.

Decent demand for Wednesday's 10-year note auction and Thursday's 30-year bond auction calmed nerves slightly, as did today's benign March Consumer Price Index (CPI).

Odds of a rate cut at the Federal Reserve's May meeting were 27% on the CME FedWatch tool as of late Thursday, but rate cut odds are 84% for June.

Tariff-related inflation concerns could be one concern keeping the Fed from cutting rates at its next meeting in May. But worries about possible credit market issues if yields keep spiraling higher are another issue the Fed might find itself having to address.

Possible tariff-related price pressure comes only a couple of years after the 2022–2023 inflation surge, and memories of the central bank's slow inflation response then could keep the Fed hesitant to loosen policy now. The Fed is also responsible for promoting maximum employment, but Fed Chairman Jerome Powell and other policy makers have argued that stamping out inflation can outweigh other economic concerns.

"For those waiting for the Fed to cut rates, it looks like it will take more time and data," said Kathy Jones, chief fixed income strategist at Schwab. "Besides, the Fed could cut short-term rates and bond yields could move higher."

The Cboe Volatility Index® (VIX) hovered near 40 late Thursday, signaling strong chances of more sharp moves in the SPX.

Sector-wise Thursday, crude oil's weakness helped send the energy sector to 6% losses. by far the worst performance of any S&P 500 sector. But investors also fled from communication services, consumer discretionary, and info tech, the three leading sectors Wednesday but all in the bottom rung today as risk appetite waned.

Travel stocks also fell sharply, with Delta Air Lines (DAL), Norwegian Cruise Line (NCLH), and Carnival (CL) down double digits late in the session. Apparel companies like Nike (NKE), Under Armour (UAA), and Foot Locker (FL) got stomped, and semiconductors lost about half of their Wednesday gains. Tesla (TSLA), which enjoyed a meteoric rally Wednesday, was back in investors' doghouse Thursday down about 8%.

The Dow Jones Industrial Average® ($DJI) fell 1,014.79 points (2.5%) to 39,593.66; the SPX dropped 188.85 points (3.46%) to 5,268.05, and the Nasdaq Composite® ($COMP) sank 737.66 points (4.31%) to 16,387.31.