On April 7, 2025, the financial markets were in turmoil as conflicting reports about a potential 90-day pause on tariffs sent shockwaves through Wall Street. The White House swiftly dismissed these rumors as "FAKE NEWS" in a statement to CNBC, leaving investors grappling with uncertainty.
The day began with a significant drop in major indexes, with the S&P 500 down 3.9% and the Nasdaq off 4.2%. Premarket futures indicated a bleak outlook, with major indexes declining about 2% before the markets opened at 9:30 a.m. ET. The S&P 500 futures were down approximately 5%, while Nasdaq futures fell more than 6%. This was a continuation of a trend that has seen the Nasdaq accumulate a staggering drop of nearly 22% in 2025.
Despite the initial panic, a sudden rumor that the Trump Administration was considering a 90-day pause on tariffs—excluding China—sparked a brief relief rally. In a matter of minutes, indexes jumped about 3%, with the Nasdaq recovering from a low of 14,800 to a high of 15,300. However, this momentum was short-lived, as the Nasdaq soon found itself bouncing around 2% losses.
As the day progressed, the 10-Year Treasury yields surged to 4.04%, a steep increase from the previous trading rate of 3.90%. This rise in yields has led to speculation that the Trump Administration may be prioritizing Treasury yields over the stock market in the short term. Analysts suggest that the need to roll over approximately $10 trillion in upcoming debt could be influencing this strategy.
Market analysts and business leaders have begun to voice their concerns regarding the economic impact of tariffs. JPMorgan CEO Jaime Dimon warned that tariffs would only exacerbate the fragility of the current economy and contribute to rising inflation. He stated, "Tariffs will slow down an economy that’s already fragile and boost inflation." Dimon’s comments reflect a growing sentiment among financial leaders that the market is not positioned for a soft landing, a view he no longer supports.
Another prominent figure, hedge fund manager Bill Ackman, echoed these sentiments, tweeting, "To state the obvious, it does not help our country’s and our president’s negotiating position to be trying to strike deals while our market is collapsing." His call for change in strategy highlights the increasing pressure on the administration to address the negative economic consequences of its tariff policies.
The major technology stocks, often referred to as the "Magnificent 7," have also been feeling the heat. On this particular Monday morning, NVIDIA was down 4.72%, Apple dropped 2.91%, and Amazon fell 1.64%. The cyclical nature of these companies makes them particularly vulnerable during economic downturns.
Meanwhile, Japanese semiconductor stocks experienced a significant decline, with many falling between 15% to 20% overnight. This downturn is indicative of broader concerns about the global supply chain and the potential impact of tariffs on international trade.
As the market continues to react to these developments, analysts are keeping a close eye on key support levels. The Nasdaq has broken below important moving averages, and it is now approaching a critical support level around 17,000 points. Technical analyst Gilberto Coelho noted that if this level is breached, the index could potentially test 14,000 points, intensifying the selling pressure.
Despite the grim outlook, Coelho mentioned the possibility of short-term technical rebounds, suggesting that the Nasdaq could test resistance levels at 18,500 or 19,500 points. However, he cautioned that these rebounds would not alter the overarching downward trend the index is currently experiencing.
Investors are left wondering how long this volatility will last and what measures the administration might take to stabilize the economy. The uncertainty surrounding tariffs and their implications for the market has created a climate of fear and speculation.
As the trading day unfolded, the S&P 500 entered bear market territory, a stark reminder of the challenges facing the U.S. economy. The combination of rising inflation, declining consumer confidence, and the ongoing trade war has left many wondering if the country can navigate these turbulent waters.
In conclusion, as the markets continue to react to the administration's policies and external pressures, the financial landscape remains precarious. Investors are advised to stay informed and prepared for further fluctuations in the market, as the implications of these tariff discussions unfold.
