2025-04-04 21:34

Two-day selloff puts S&P 500 down over 17% from record high Nasdaq Composite confirmed bear market on Friday Coming week sees tariff deadline, inflation data, bank earnings NEW YORK, April 4 (Reuters) - Tariff-stunned markets face another week of potential tariff turmoil, with fallout from President Donald Trump's sweeping import levies keeping investors on edge after the worst week for U.S. stocks since the onset of the coronavirus crisis five years ago. Investors will look for signs the stock market may be close to at least a short-term bottom after Trump's tariffs rocked global asset prices this week. The benchmark S&P 500 (.SPX) , opens new tab lodged its biggest weekly drop since March 2020 and the Nasdaq Composite (.IXIC) , opens new tab on Friday ended down more than 20% from its December record high, confirming the tech heavy index is in a bear market. The Dow Jones Industrial Average (.DJI) , opens new tab finished the week down well over 10% from its December record high, marking a correction for the blue-chip index. Sign up here. More volatility could be in store ahead of the April 9 deadline Trump set for his reciprocal global tariffs to take effect, after his Wednesday announcement of the levies sent markets into a tailspin, raising fears of a global recession. "The playbook on this is very, very unclear for everybody," said Jeffrey Palma, head of multi-asset solutions at Cohen & Steers. "There is all the questions about tariffs, retaliatory tariffs, where this ends and where it shakes out." With the steep slide at the end of the week, the S&P 500 was down over 17% from its February 19 all-time closing high. In the two days following Trump's tariff announcement, S&P 500 companies lost about $5 trillion in market value, the largest amount ever in a two-day stretch, according to LSEG data. "The markets could be their own worst enemy," said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management. "This kind of drawdown ... could shake confidence and it could actually lead to weaker economic activity." Trump's tariffs would amount to the highest trade barriers in more than a century, including a 10% baseline tariff on all imports and higher targeted duties on dozens of countries. The trade battle escalated on Friday when China hit back with additional tariffs of 34% on U.S. goods. Investors downgraded their economic and earnings forecasts, with JPMorgan analysts raising the risk of a global recession this year to 60% from 40% before. Some investors held out hope that Trump would negotiate deals in coming days with some countries that would roll back some of the tariffs. Others were dubious that Trump would make any concessions. Despite Trump's opportunity to pivot, "it is not lost on us that the window is shrinking and some damage to consumer and business confidence may have been done already regardless of the negotiated ending point to follow," Citi strategist Scott Chronert said in a note on Friday. One sign of gloom: The Cboe Volatility Index (.VIX) , opens new tab, an options-based measure of investor anxiety, registered its highest closing level since April 2020. Bearish sentiment in the American Association of Individual Investors survey reached 61.9%, its highest reading since 2009 during the financial crisis. With tariffs clouding the outlook, investors are wary of dour financial forecasts as U.S. companies kick off quarterly reports in earnest in the coming week. S&P 500 earnings are expected to have climbed 7.8% in the first quarter from the year ago period, according to LSEG IBES. Companies set to report next week include major banks JPMorgan (JPM.N) , opens new tab and Wells Fargo (WFC.N) , opens new tab due on April 11. "We see a lot of uncertainty in the earnings outlook at the moment," said RBC Capital Markets strategists in a Friday note, in which they cut their 2025 earnings forecast for the S&P 500. The market selloff and increasing pessimism could mean the bar is lower for news that would buoy stocks, said Keith Lerner, co-chief investment officer with Truist Advisory Services. "If you had anything that was even remotely positive right now, you could see a short-term spark because people are braced for the negative outcome," Lerner said. Also in the coming week, the monthly consumer price index report on Thursday could help set a baseline for U.S. inflation ahead of the impact from tariffs, which are widely expected to add to pricing pressures. Investors have been factoring in more Federal Reserve interest rate cuts this year in the wake of the tariff announcement, with Fed fund futures accounting for 100 basis points of easing this year, according to LSEG data. Fed Chair Jerome Powell said on Friday that the tariffs are "larger than expected" and the economic fallout, including higher inflation and slower growth, likely will be as well. Palma, of Cohen & Steers, said it was critical for markets to show some stability in the coming days. "We've had two really, really big days in terms of sharp market moves," Palma said. "What we really don't want to see is that starts to create some vicious cycle that itself destabilizes the financial system." https://www.reuters.com/markets/wall-st-week-ahead-shell-shocked-markets-brace-more-tariff-tumult-2025-04-04/

2025-04-04 21:31

April 4 (Reuters) - Renewable energy company Maxeon Solar Technologies (MAXN.O) , opens new tab said on Friday it would establish alternative manufacturing and supply chains as a result of U.S. President Donald Trump's sweeping tariffs. Shares of the company were up 4.6% in trading after the bell. Sign up here. The move comes amid an intensifying global trade war after Trump on Wednesday imposed a 10% baseline tariff on all U.S. imports, along with higher duties on dozens of other countries. Maxeon said the new tariffs and trade barriers were applicable to its legacy cell and module manufacturing facilities. The company added it would continue to prioritize the development of its Albuquerque-based manufacturing facility as well as identifying additional domestic component vendors. "Domestic manufacturing is the right thing to do, regardless of tariffs," said CEO George Guo. The company is also locked in a dispute with the U.S. Customs & Border Protection (CBP), which began to detain Maxeon's solar panels in July last year, citing the Uyghur Forced Labor Prevention Act (UFLPA). The California-based firm said on Friday the CBP had denied its request to further review the continued detention of its modules and added that it was considering exercising its right to contest CBP's decision at the U.S. Court of International Trade to demonstrate that its products fully comply with the UFLPA. https://www.reuters.com/business/energy/maxeon-solar-set-up-alternative-supply-chains-amid-tariff-turmoil-2025-04-04/

2025-04-04 21:19

MEXICO CITY, April 4 (Reuters) - Mexico has detected its first human case of H5N1 avian influenza, also known as bird flu, the health ministry said on Friday. The infection was confirmed on Tuesday in a three-year-old girl living in the northern state of Durango, who remains hospitalized in serious condition. Sign up here. "So far there is no evidence of sustained person-to-person transmission," the health ministry said in a statement, adding that the World Health Organization (WHO) considers the public health risks of the virus to the general population to be low. A particularly severe variant of the H5N1 strain has been spreading around the world in animals since 2020, causing lethal outbreaks in commercial poultry and sporadic infections in other species from alpacas to house cats. Last year, it was detected in cows for the first time. Durango's economy is heavily reliant on agriculture, primarily its cattle industry. Last year, the WHO reported Mexico's first laboratory-confirmed human case of infection with the A(H5N2) bird flu in a person who had no known exposure to animals and later died of chronic illness. https://www.reuters.com/business/healthcare-pharmaceuticals/mexico-reports-first-human-case-h5n1-bird-flu-2025-04-04/

2025-04-04 21:08

ORLANDO, Florida, April 4 (Reuters) - One of the most pivotal weeks in years - even decades - for the global economy closed on Friday to the sound of the Nasdaq crashing into a bear market as investors fear U.S. President Donald Trump's trade war will tip the world into recession. Less than 48 hours after Trump raised tariff barriers to the highest in over a century, China on Friday said it would slap additional 34% duties on all U.S. imports, escalating the global trade war to new, dangerous heights. Sign up here. Any hopes investors had of Federal Reserve Chair Jerome Powell coming to the rescue by signaling a readiness to cut interest rates - as Trump had appeared to pressure him into doing in a social media post earlier in the day - were dashed, as Powell stressed the "elevated risks" to both growth and inflation. This 'wait and see' approach rattled Wall Street further - the S&P 500's 6% slump meant the index's market cap plunged $5 trillion in just two days. The Fed is in a real bind, faced with the rapidly rising risk of recession and soaring price pressures. Treasuries may have been caught between these two stools on Friday, but it is crystal clear where rates traders are putting their money - four rate cuts are fully priced in for this year, starting in June. However, given the ferocity of the equity market selloff, collapse in confidence and extraordinarily uncertain outlook, it wouldn't be a total shock if the Fed cut rates at its May 6-7 meeting. Indeed, could an inter-meeting move be ruled out if the market rout continues next week? This is the heaviest slide across global stocks since the pandemic in 2020. But unlike that crash and the Global Financial Crisis in 2008, the current turmoil on Wall Street is a result of clear-headed policy choices made by a government that would have known this kind of outcome was distinctly possible, if not highly likely. Many analysts reckon this hasn't been seen before. Some of the economic and market numbers that have been seared into investors' consciousness this week haven't been seen for a long time either: - The highest U.S. tariffs in over 100 years - Effectively the biggest U.S. tax rise since 1968, according to JP Morgan analysts, who now say a global recession is more likely than not - $5 trillion of U.S. equity market cap wiped out in two days, bringing the total market cap lost since Trump's inauguration in January to nearly $8 trillion Economists at Barclays now reckon U.S. inflation will exceed 4% this year while GDP will contract in the fourth quarter, a move "consistent with recession". The rest of the world won't escape the pain. Economists at Citi say up to one percentage point will be knocked off euro zone growth this year, pushing the bloc to the brink of recession, while China could suffer a similar blow to its GDP growth, which they say was already slowing to sub-5%. With global demand set to suddenly slow, if not contract, oil prices on Friday slumped more than 6% for a second straight day. Brent crude futures hit a four-year low near $62 a barrel, and are now down 26% from a year ago. And last, but by no means least, for a brief moment on Friday the benchmark two-year Swiss government bond yield fell below zero. Granted, it is Switzerland, where official rates are just 0.25%. But there aren't many clearer signs that investors are worried. Markets will be closed at the weekend but the lines of communication between policymakers around the world will very much be open, as governments frantically try to de-escalate the global trade war and central bankers weigh up their policy response. Monday promises to be another rocky ride. I'd love to hear from you, so please reach out to me with comments at [email protected]. You can also follow me at @ReutersJamie and @reutersjamie.bsky.social. This Week's Key Market Moves Chart of the Week A very simple and striking chart this week from Morgan Stanley, showing where U.S. tariffs now stand relative to history. Historic. What could move markets on Monday? Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles , opens new tab, is committed to integrity, independence, and freedom from bias. Trading Day is also sent by email every weekday morning. Think your friend or colleague should know about us? Forward this newsletter to them. They can also sign up here. https://www.reuters.com/markets/global-markets-trading-day-2025-04-04/

2025-04-04 20:59

Second day of chaotic sell-off since Trump tariff announcement Global recession fears grow as retaliation begins Three benchmarks post largest two-day declines since March 2020 Fed Chair Powell warns of tariff impact on inflation Indexes down: S&P 500 5.97%, Nasdaq 5.82%, Dow 5.5% April 4 (Reuters) - Wall Street nosedived for a second straight day on Friday, confirming the Nasdaq Composite was in a bear market and the Dow Jones Industrial Average was in a correction, as an escalating global trade war spurred the biggest losses since the pandemic. The Dow Jones Industrial Average (.DJI) , opens new tab, S&P 500 (.SPX) , opens new tab and the Nasdaq Composite (.IXIC) , opens new tab posted their largest two-day declines since the emerging coronavirus caused global panic during U.S. President Donald Trump's first term. For Thursday and Friday, the Dow was down 9.3%, the S&P 500 10.5% and the Nasdaq 11.4%. Sign up here. Fallout from Trump's sweeping tariffs stoked fears of a global recession, wiping trillions of dollars of value from U.S. companies. Highlighting growing panic among investors, the CBOE Volatility Index (.VIX) , opens new tab, or Wall Street's fear gauge, closed at its highest level since April 2020. Since late on Wednesday, when Trump boosted tariff barriers to their highest level in more than a century, investors have dumped stocks, fearing both the new U.S. economic reality and also how U.S. trading partners might retaliate by steepening their own trade barriers. A record-breaking number of shares were traded on Friday, with volume on U.S. exchanges around 26.79 billion shares, beating the previous high of 24.48 billion shares traded on January 27, 2021. The Nasdaq slid on Friday 962.82 points, or 5.82%, to 15,587.79, confirming the tech-heavy index was in a bear market compared to its record closing high of 20,173.89 on December 16. Meanwhile, the Dow Jones Industrial Average (.DJI) , opens new tab fell 2,231.07 points, or 5.50%, to 38,314.86 points, confirming a correction to its record closing high of 45,014.04 on December 4. The S&P 500 lost 322.44 points, or 5.97%, to close at 5,074.08 points, its lowest finish in 11 months. "Right now, how bad it gets depends on how committed the administration is to this set of policies which, clearly, the market is voting against," said Steve Sosnick, chief strategist at Interactive Brokers. Global governments began reacting to Trump's tariff announcement on Friday, further undermining investor sentiment that a global recession could be averted. JP Morgan said it was forecasting a 60% chance of the global economy entering a recession by year-end, up from 40% previously. China's finance ministry said it would impose additional tariffs of 34% on all U.S. goods from April 10. Meanwhile, the prime ministers of Britain, Australia and Italy held talks on how to respond to Trump's tariff salvo. "We're in the Wild West of a trade war right now," said Mariam Adams, managing director at UBS Wealth Management. For the week, the S&P 500 fell 9.1%, the Dow declined 7.9%, and the Nasdaq slumped 10%. Federal Reserve Chair Jerome Powell spoke publicly for the first time since Trump's tariff announcement. Powell highlighted the unexpectedly hefty tariffs could trigger higher inflation and slower growth, setting the stage for challenging decisions for U.S. central bankers. Safe-haven buying in the bond market sent the yield on the benchmark 10-year Treasury notes to below 4%. This pushed U.S. bank stocks down further, with the sector under pressure globally, as the prospect of interest rate cuts from central banks and a hit to economic growth from tariffs would crimp profitability. The S&P Banks index (.SPXBK) , opens new tab dropped 7.3%. All 11 S&P sectors dropped by more than 4.5%, with energy (.SPNY) , opens new tab the leading laggard for the second straight day, off 8.7%, as companies tracked a 7.3% decline in U.S. crude prices. U.S.-listed shares of Chinese companies dived, with JD.com and Alibaba and Baidu all down more than 7.7%. Companies with exposure to China also fell across the board, with mega-caps such as Apple (AAPL.O) , opens new tab dropping 7.3%. The chipmakers index (.SOX) , opens new tab sank 7.6%, having declined 9.9% the previous day. The sector is particularly vulnerable to a double tariff whammy as many chip companies design their chips in the U.S., but have them manufactured in China. https://www.reuters.com/markets/us/wall-street-futures-lose-ground-after-china-retaliates-against-us-tariffs-2025-04-04/

2025-04-04 20:58

China announces 34% additional tariffs Sharp escalation in global trade war Trump says his policies will not change, wants Fed rate cut Powell: Tariffs bigger than expected, Fed focused on inflation EU's top trade negotiator to speak to U.S. officials on Friday PALM BEACH, Florida/BEIJING/WASHINGTON, April 4 (Reuters) - Global stock markets plummeted further on Friday after China said it would strike back at U.S. President Donald Trump with additional tariffs of 34% on U.S. goods, escalating a trade war that has rattled investors and fed fears of a coming recession. The trade war has spurred the biggest market losses since the pandemic. Sign up here. The Nasdaq Composite's (.IXIC) , opens new tab slide confirmed a bear market for the tech-heavy index, compared to its record closing high of 20,173.89 on December 16. Meanwhile, the Dow Jones Industrial Average (.DJI) , opens new tab confirmed a correction to its record closing high of 45,014.04 on December 4. Intensifying the standoff between the world's two biggest economies, Beijing also announced controls on exports of some rare earths, while Trump doubled down as well, vowing not to change course. China added 11 U.S. bodies to the "unreliable entity" list, which allows Beijing to take punitive actions against foreign entities, including firms linked to arms sales to democratically governed Taiwan, which China claims as part of its territory. Other impacted nations like Canada have also readied retaliation in a mounting trade war after Trump raised U.S. tariff barriers to the highest levels in more than a century, leading to a plunge in world financial markets. For the week, the S&P 500 fell 9.08%, the Nasdaq declined 10.02%, and the Dow fell 7.86%. The Russell 2000 Small Cap Index dropped 9.70%. Investment bank J.P. Morgan estimated a 60% chance of the global economy entering a recession by year-end, up from 40% previously. "This is significant and is unlikely to be over, hence the negative market reactions," said Stephane Ekolo, Market & Equity Strategist, Tradition, London. "Investors are afraid of a 'tit for tat' trade war situation." Republican U.S. Senator Ted Cruz, a staunch Trump supporter, warned on Friday that the tariffs could pose "enormous risks" for the U.S. economy and for Republicans' political fortunes. "The effect of this is trillions of dollars of increased taxes on American consumers," he said on his podcast. Cruz said he is hopeful that Trump will use the tariffs as leverage to convince other countries to lower their own trade barriers, a result he said he would applaud. But he cautioned that a prolonged trade war would be a "terrible outcome" for Americans. Cruz, however, was given an opportunity earlier this week to register his opposition to Trump's trade policies when the U.S. Senate passed legislation that would terminate new tariffs on Canada. Cruz voted in the minority to stand with the president. As the market selloff intensified, Trump was largely out of public view at his golf course, where he sent multiple defiant social media messages guaranteeing victory for the U.S. economy. After returning to his Florida Mar-a-Lago residence shortly before 4 p.m., White House staff told press not to expect Trump to make any public appearances for the remainder of the day. Federal Reserve Chair Jerome Powell told a business journalists conference on Friday the tariffs were "larger than expected" and elevated the risk of both higher inflation and slower growth. The Fed can wait for more data to decide how monetary policy should respond, but it will focus on keeping inflation expectations anchored if Trump's tariffs sparked more persistent price pressures, Powell said. He did not directly address the U.S. stocks selloff but acknowledged that uncertainty had paused business decisions. "People are just, they just are kind of waiting for clarity," Powell said. "I can't tell you when that will pass, but you know, ultimately it will pass." Just before Powell spoke, Trump said in a Truth Social post that it was the "perfect time" for the Fed to cut interest rates. "CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!" Trump wrote. GLOBAL EFFECTS Trump's team has characterized the market turbulence as an adjustment that would prove beneficial in the long run. In an interview with conservative host Tucker Carlson released on Friday, U.S. Treasury Secretary Scott Bessent asserted that the plunge in U.S. stocks was driven more by the surprise emergence of China's DeepSeek artificial intelligence tool than by Trump's policies. The White House touted stronger-than-expected job data on Friday, after a Labor Department report showed the U.S. economy added far more jobs in March than predicted. But Trump's sweeping import tariffs could test the labor market's resilience in the months ahead amid sagging business confidence. "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!!!" Trump said in a social media post in all caps. After Beijing's retaliation, he posted: "China played it wrong, they panicked - the one thing they cannot afford to do!" The 10% baseline tariffs for U.S. imports go into effect on Saturday but shipments under way by then have until May 27 to arrive tariff-free, according to U.S. Customs and Border Protection. Trump also said on Friday he was extending by 75 days a deadline for Chinese technology company ByteDance to sell the short video app TikTok or face a U.S. ban. In contrast to the U.S. labor report, Canada's total employment fell and the unemployment rate ticked up in March, data showed on Friday. The country's first monthly decrease in jobs since 2022 was prompted by uncertainty around tariffs, which forced companies to pause hiring and spurred some layoffs. In Japan, one of the top U.S. trading partners, Prime Minister Shigeru Ishiba said the tariffs had created a "national crisis" as a plunge in banking shares on Friday set Tokyo's stock market on course for its worst week in years. DIVISIONS AND MIXED SIGNALS With European shares also tumbling to the biggest weekly losses in years, the European Union's trade commissioner, Maros Sefcovic, said he held a "frank" two-hour call with U.S. Secretary of Commerce Howard Lutnick and U.S. Trade Representative Jamieson Greer. "I was clear: US tariffs are damaging, unjustified," Sefcovic wrote on social media. "The EU's committed to meaningful negotiations but also prepared to defend our interests." The EU is divided on how best to respond to Trump's tariffs. Countries cautious about retaliating and thereby raising the stakes in the standoff with the U.S. include Ireland, Italy, Poland and the Scandinavian nations. French President Emmanuel Macron led the charge on Thursday by calling on companies to freeze investment in the U.S. However, French Finance Minister Eric Lombard later cautioned against like-for-like countermeasures on the U.S. tariffs, warning this would also rebound on European consumers. The U.S. tariffs could jack up the price for U.S. shoppers of everything from cannabis to running shoes to Apple's iPhone. A high-end iPhone could cost nearly $2,300 if Apple passes the costs on to consumers, based on projections from Rosenblatt Securities. China is retaliating for Trump's tariffs on imports from the world's No. 2 economy. The European Union faces a 20% duty. Trump says "reciprocal" tariffs are a response to barriers put on U.S. goods, while administration officials said the tariffs would create manufacturing jobs at home and open up export markets abroad, although they cautioned it would take time to see results. https://www.reuters.com/markets/europe/europe-prepares-response-trump-tariffs-global-markets-plunge-2025-04-04/