April 9th Market Overview

Sponsored by Interactive Offers*

Happy Wednesday.

Historic green day in the markets. It’s pretty crazy to see names like Apple up over 10% but we needed a relief rally and some good tariff news.The Nasdaq heads for best day since 2008 on tariff pause news. $QQQ ( ▲ 0.68% ) 

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Let's dig in...

Executive Summary

• President Trump authorized a 90-day pause on reciprocal tariffs, lowering them to 10% for most countries while raising China’s to 125%
  

• Markets rebounded powerfully, erasing much of the past week’s losses after four straight declining sessions
  

• Treasury Secretary Bessent clarified the pause excludes sector-specific tariffs and involves “bespoke” negotiations with individual countries
  

• Minneapolis Fed President Kashkari indicated tariffs make interest rate adjustments in either direction less likely
  

Market Overview

Key Market Drivers

1. Policy Reversal on Tariffs: President Trump’s announcement via Truth Social instituting a 90-day “PAUSE” on reciprocal tariffs for most countries removed a major market overhang after the Dow had lost over 4,500 points in four sessions.
   

2. China Trade Escalation: While almost all countries received relief, tariffs on Chinese goods increased to 125%, following China’s earlier announcement of 84% duties on US goods.
   

3. Market Sentiment Shift: Extreme negative sentiment and depressed stock prices set the stage for a violent rebound. President Trump’s early posts (“BE COOL!”, “THIS IS A GREAT TIME TO BUY!!!”) preceded the afternoon rally.
   

4. Treasury Commentary: Scott Bessent’s clarification that the pause represents a “temporary floor” at 10% while individual negotiations occur reassured investors about the administration’s approach.
   

5. Global Trade Impact: The EU’s approval of tariffs on $23.2 billion of US goods, set to begin mid-April, remains a background concern despite the day’s very positive developments.

Stock Spotlight

Apple $AAPL ( ▲ 2.21% ) rebounded as the tariff pause eased concerns about its China-centric supply chain. Bank of America maintained its $250 price target, citing stable cash flows and AI potential.

Walmart $WMT ( ▲ 2.08% ) pulled Q1 operating income guidance but maintained sales forecasts. CFO Rainey highlighted the company’s history of gaining market share during economic uncertainty.

Delta Air Lines $DAL ( ▼ 1.42% ) beat profit estimates with $0.46 EPS vs $0.38 expected. CEO Bastian cited “unprecedented” trade uncertainty and announced reduced capacity plans for H2 2025.

Nvidia $NVDA ( ▼ 0.2% ) led semiconductor stocks higher after the tariff pause eased supply chain and export restriction concerns.

Capri Holdings $CPRI ( ▼ 1.71% ) jumped after WSJ reported Prada’s potential $1.4 billion Versace acquisition faced collapse due to tariff uncertainties and market volatility.

Big Name Updates

JPMorgan Chase $JPM ( ▼ 0.63% ) CEO Dimon called a US recession a “likely outcome” from tariff policies, noting market declines affect consumer spending through reduced retirement values.

Tesla $TSLA ( ▲ 0.02% ) joined the tech recovery rally. Benchmark lowered its price target to $350 from $475 but added the stock to its best ideas list.

Amazon $AMZN ( ▼ 1.49% ) and Meta $META faced JPMorgan estimate cuts citing tariff impacts and recession potential, yet both rallied with the broader market.

The Magnificent Seven stocks collectively ripped, with CNBC’s Mag7 tracker rising over 11% as supply chain concerns temporarily eased.

Other Notable Company News

Airline stocks rallied with United Airlines $UAL ( ▲ 0.14% )up significantly and Southwest $LUV ( ▼ 2.41% ), JetBlue $JBLU ( ▼ 0.27% ), and Alaska Air $ALK ( ▼ 1.64% ) posting strong gains.

Pharmaceutical stocks initially fell after Trump announced forthcoming “major tariffs” on the sector. Pfizer $PFE ( ▲ 0.96% ), AbbVie $ABBV ( ▲ 2.31% ), Merck $MRK ( ▼ 0.01% ), and Eli Lilly $LLY ( ▲ 3.0% )recovered some losses during the afternoon.

Travel companies gained ground, with Expedia $EXPE ( ▼ 0.86% ) benefiting from reduced concerns about trade impacts on global travel.

Hackett Associates projects US imports could fall at least 20% in the second half of 2025 compared to 2024, according to data from the National Retail Federation.

Sector Watch

Bond Market

• Treasury yields climbed despite equity rally: 10-year yield rose over 14 basis points to 4.45%

• Historic movement: Largest three-day yield increase since December 2001

• Strong auction demand: $39 billion 10-year Treasury auction saw record 87.9% uptake from indirect bidders

• Foreign appetite intact: Strong participation from international buyers eased concerns about demand for U.S. debt amid trade tensions

Policy Watch

• Fed stance: Minneapolis Fed President Kashkari warned tariffs likely raise prices, slow growth, and increase unemployment

• Rate implications: Kashkari stated tariffs have “increased the hurdle to change rates in either direction”

• EU retaliation: European Union approved $23.2 billion in tariffs on U.S. goods starting mid-April

• Targeted products: Politically sensitive items including Louisiana soybeans, diamonds, agricultural products, and motorcycles

• Currency warning: Treasury Secretary Bessent cautioned China against devaluation, threatening additional tariff increases

• Yuan movement: China has weakened its currency’s reference rate for five consecutive sessions
  
  

What to Watch

1. Fed Minutes Release: Today’s release of minutes from the March Fed meeting may reveal how concerned policymakers were about stagflation risks from tariffs.

   • Look for discussions balancing inflation persistence against growth concerns

   • Insights into how tariffs might alter the expected rate path
     

2. Tomorrow’s CPI Data: Thursday’s inflation report will provide critical context on price trends before the major tariff implementations.

   • Baseline inflation data will help assess potential tariff impacts

   • Could influence market expectations about Fed policy reactions
     

3. 90-Day Negotiation Period: The clock is now ticking on the tariff pause, with uncertainty about what happens when it concludes.

   • Progress of “bespoke” negotiations with individual countries

   • Potential for extensions, modifications, or reimplementation
     

4. U.S.-China Dynamics: With tariffs now at 125% on Chinese goods and 84% on U.S. exports to China, this specific conflict remains heated.

   • Further retaliatory measures from either side

   • Currency movements after Bessent’s warning about devaluation
     

5. Sector-Specific Tariffs: The pharmaceutical industry faces potential “major tariffs” while other sector-specific levies remain unaffected by today’s pause.

   • Timing and scope of pharmaceutical tariffs

   • Impact on drug pricing and manufacturing location decisions

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Thanks for reading 🙂

- John

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