Key Points
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The stock market is extending losses and bleeding even more this morning.
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This is due to China announcing retaliatory tariffs on the U.S.
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Recession risks have also increased significantly.
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Yesterday was one of the worst trading days for the stock market due to unprecedented tariffs that went above and beyond what anyone would have expected. Analysts called it worse than the worst-case scenario, but the selloff is nowhere near over as stocks cratered once more on market open today.
This is mainly because China has hit back with its own tariffs. China is imposing a 34% tariff on All U.S. imports beginning April 10th. It is likely that other countries will also retaliate with their own tariff measures in the coming days.
Global recession chances have been hiked to 60% by JPMorgan, and UBS Global Wealth Management ended up downgrading U.S. equities from Neutral to Attractive.
Here’s a market update as of 10:30 A.M (ET) today.
- The S&P 500 is down 219.04 points, or 3.99%.
- The Nasdaq Composite is down 705.18 points, or 4.26%.
- Dow Jones Industrial Average is down 1,366.35 points, or 3.37%.
Tariffs Cause Markets to Nosedive
The tariff turmoil is causing more pain to markets as there are no hints as to how long it will take for these tariffs to be negotiated down, if ever. China’s retaliation is going to complicate any negotiations even more. China also imposed export controls on rare earth items.
Trump posted on Truth Social saying, “CHINA PLAYED IT WRONG, THEY PANICKED – THE ONE THING THEY CANNOT AFFORD TO DO!”
He also said, “TO THE MANY INVESTORS COMING INTO THE UNITED STATES AND INVESTING MASSIVE AMOUNTS OF MONEY, MY POLICIES WILL NEVER CHANGE. THIS IS A GREAT TIME TO GET RICH, RICHER THAN EVER BEFORE!!!”
Cambodia has lowered tariffs on some U.S. imports to 5% from 35%, but this is unlikely to bring much relief since the country doesn’t import much from the U.S. in the first place and doesn’t have the capacity to meaningfully offset the higher tariffs from China.
The French industry minister said that tariffs are without precedent since the 1930s and are going to destabilize the global economy and cost jobs. He also said that Europe wishes to avoid escalation and “must stay united.”
Regardless, he also said that Europe must make a proportional and firm response to the tariffs.
Traders are now expecting four rate cuts this year as recession chances have increased significantly.
Macro Data Today
Macro data showed solid job figures. Still, the market has not reacted well due to the long-term effects that tariffs will have.
- US nonfarm payrolls came in at 228,000 vs. the 140,000 forecast. It is up from the previous print of 151,000.
- US private payrolls were also much higher at 209,000 vs. the 135,000 forecast and 140,000 previously.
- US Unemployment rate did tick up slightly and came in at 4.2% vs. the 4.1% forecast.
- US labor force participation came in at 62.5% vs the 62.4% forecast.
- The Nasdaq has also entered a bear market, along with the Russell 2000.
Other Assets
- Gold is declining sharply and is down 1.62% today.
- Cruise Oil futures are down significantly. It has declined 8.2% today.
- Natural gas is down 6.3%
- Bitcoin has held flat.
The image featured at the top of this post is ©Greg Bowker - Pool/Getty Images.