politicsClosed Apr 3, 2025
Trump Says Market Response to Tariffs Was Expected as Stocks, Dollar Tumble
- US stocks close lower; dollar wipes out post-election gains
- Trump says market response to tariffs was expected
- The US is imposing a minimum 10% tariff on all exporters
- Carney says Canada to match US levies on autos
President Donald Trump displays a signed executive order during a tariff announcement in the Rose Garden of the White House in Washington, DC, on April 2.
Photographer: Jim Lo Scalzo/EPA/Bloomberg
Readers, we are going to take a break from blogging today. Coverage of the tariff rollout continues on the Bloomberg Terminal and Bloomberg.com. Please join us Friday for payroll and Fed blogging.
Coming into today, corporate debt markets had performed resiliently while tariff rhetoric roiled stocks, but on Thursday credit investors joined the crowd, showing more worry than any point in the past year.
A derivative index that investors use to hedge against high-grade bond losses in the US soared to its highest reading since November 2023 and jumped the most since August. A similar gauge for junk bonds displayed the most fear also since late in 2023.
Retailers were hit among the most in the high-yield market, with bonds from Michaels plunging more than 7 cents on the dollar and ones from Kohl’s and Wayfair declining by more than 4 cents on the dollar. In credit-focused ETFs, activity showed investors dumping US junk debt and leveraged loans, while fleeing to investment grade as a measure of safety.
Meanwhile, the primary markets came to a halt, as blue-chip borrowers who had been eyeing bond sales opted for the sidelines.
Read more:
Trump, Asked About Markets, Says ‘Now We Let It Settle In’
The Cboe Volatility Index — Wall Street’s "fear gauge" — rose to its highest level since August:
Updated Apr 3
Trump is speaking to reporters on Air Force One. Here are some headlines:
- Trump: Spoke to Automaker Executives on Thursday
- Trump Says Market Response to Tariffs Was Expected
- Trump: Administration Looking at Chinese Farmland
- Trump: Still Looking at Pharma, Chips Sector Trade
- Trump: Open to Tariff Negotiations if Something ‘Phenomenal’
Updated Apr 3
MORE BLOGGING: TOPLive will be covering the US employment report for March starting at 8:15 a.m. New York time, followed by Federal Reserve Chair Jerome Powell’s address to the SABEW conference starting at 11:25 a.m. For news, analysis and market reaction, click here or visit Bloomberg.com.
The stock market rout unleashed by Trump’s tariff gambit is diverting Wall Street’s attention from a key data point that would otherwise command it: the monthly jobs report due Friday.
Money managers have rolled back exposures to US equities to levels not seen since November 2023, according to a poll by the National Association of Active Investment Managers. Hedge funds dumped global stocks at the fastest rate in 12 years in March, according to Goldman Sachs Group Inc. data.
As worries mount that the president’s trade policies will unleash a global recession, equity bulls conditioned over the past two years to see any pullback as a buying opportunity now say the risks are too great. From computer-driven funds to stock pickers, investors are pulling money out of the market in what by some measures are the most defensive steps in over a year.
Read more:
Trump’s trade adviser Peter Navarro spoke on CNBC. Here are some headlines from his remarks:
- Navarro: Tariff Calculations Based on Sophisticated Analysis
- Navarro: Tariff Rates Are Half of ‘the Sum of All Cheating’
- Navarro: Tariffs Are Not A Negotiation
- Navarro Defends Tariffs as A ‘National Emergency’
- Navarro: Tariffs Are Here to Protect Americans, Raise Revenue
- Navarro: Trump Bullish Market Beginning Now
Updated Apr 3
The worst day for the S&P 500 since June 2020 drew the retail trader crowd that has been storming the markets in recent years, leaning into the notion that stocks will inevitably get back to all-time highs in the long haul.
Small investors piled into many of their favorite assets, including Nvidia and the Vanguard S&P 500 ETF, as they bet the market’s tumble will provide a contrarian opportunity for long-term gains, according to data tracking the users of Fidelity Investments’ brokerage.
Amazon.com, Apple, Meta and Microsoft were some of the most actively traded companies among Fidelity users, with these stocks seeing five to eight times more buy orders than sell orders.
Consumer staples finished Thursday as the lone winner on the S&P 500, which closed down 4.8%, the lowest since August 2024. Investors spent the day making defensive plays, piling into big food and household goods companies in an attempt to hide from the levies.
Coca-Cola and Philip Morris International both closed at record highs amid the tariff turmoil. Procter & Gamble, Kroger and Mondelez also rose.
In contrast, consumer discretionary stocks were among the worst performers of the day. Apparel and footwear makers took a significant hit as the tariffs targeted nations where the companies shifted manufacturing. Discretionary stocks underperformed staples by 7 percentage points, the most since the aftermath of the Sept. 11 terrorist attacks.
