1. Moving the market

Last night, the futures market experienced a pump-and-dump, reflecting the market’s reaction to Trump’s tariff policies. This morning, the sell-off continued, with major indexes and the broader market dropping sharply.

As a result, our domestic TTI entered “Sell” mode, and I liquidated our last domestic position in my advisory practice. We are now holding only a few selected sector ETFs.

The sell-off was broad, affecting most asset classes, including those considered “safe” havens. Many traders are highly leveraged, and when margin calls arrive, they liquidate any assets they own to meet requirements.

Trump’s tariffs were extensive but only covered about half of the tariffs imposed on the U.S. for decades. Despite not being fully reciprocal, traders and algorithms viewed them negatively due to the potential risks of a global trade war amid a slowing U.S. economy.

At the NY Stock Exchange, decliners outnumbered advancers by six to one. Shares of multinational companies like Nike (-15%) and Apple (-9%) were hit hardest, while global stock markets slumped 3% overnight.

The S&P 500 suffered its biggest daily loss since June 2020, closing at its lowest point of the day. Small Caps fell to their lowest level since January 2024, and Mega Cap tech stocks dropped to their lowest level since September.

Banks were heavily impacted, the dollar fell below its 200-day moving average, and crude oil lost nearly 7%. Bitcoin gave back its recent gains, gold fluctuated but remained above $3,100. Despite a drop in bond yields, it wasn’t enough to support the markets.

With uncertainty about market direction prevailing, it’s wise to stay on the sidelines in the safety of money market funds until a new bull market can be identified.

1. Moving the market

The equity markets remained steady in early trading despite a weak opening, as the dollar and major global currencies stayed within tight ranges ahead of Trump’s tariff announcement at 4 pm today.

April 2nd has been declared “Liberation Day,” with reciprocal tariffs on countries imposing duties on U.S. goods taking immediate effect after the announcement. Traders are jittery due to the uncertainty surrounding additional selective barriers.

In the last hour of trading, after some volatility, sentiment turned bullish, leading to solid gains with the Nasdaq outperforming. Some traders viewed this as a potential dead cat bounce ahead of the tariff revelations.

A positive macro data surprise index provided support, with ADP job additions surging and factory orders nearing record highs. This challenged the widespread recession narrative, as “hard data” reached its strongest level since May 2024, while “soft data” fell to its weakest since September 2024, as noted by ZH.

This shift lowered rate-cut expectations and pushed bond yields up. The dollar dipped, gold advanced modestly, and Bitcoin surged above $87k, erasing last week’s losses.

The ball is now in Trump’s court.

1. Moving the market

Equities pulled back early as traders anxiously awaited more clarity from Trump regarding his tariff policy rollout tomorrow.

Additional market pressure came from weak economic data, with manufacturing moving into contraction territory (stagflation) and job openings falling slightly below estimates, supporting the early pullback.

However, this downturn was temporary. Bullish sentiment helped the major indexes recover, although uncertainty about tomorrow’s final tariff implementation limited the rebound. Traders seem prepared for a potential relief rally if the outcome is better than expected.

The midday pullback was triggered by the long-awaited answer to when the tariffs would take effect. Press Secretary Leavitt announced they would be implemented “immediately after the announcement,” causing the indexes to dip before a late-hour push higher.

Bond yields slipped, the dollar remained unchanged, gold fluctuated but did not set a record, and Bitcoin surged past $85k, holding that level into the close.

The next directional move in equities now hinges on the interpretation of tomorrow’s tariff announcements.

1. Moving the market

Nervousness and uncertainty dominated Wall Street early on, with equities selling off ahead of Trump’s tariff rollout on April 2nd.

However, bullish sentiment returned by midday, allowing the major indexes to recover and close in the green, except for the Nasdaq, which remained slightly in the red.

The tariff announcement included reciprocal duties targeting countries that impose tariffs on US imports, as well as a broad 25% levy on all cars not made in the US. Weekend news did little to calm concerns; in fact, the WSJ reported that Trump had urged his advisors to adopt a more aggressive stance.

The tech sector was hit hardest early on, with major players like Nvidia, Meta, and Tesla retreating and failing to recapture last year’s bullish trend. Nvidia is down about 31% from its 52-week high.

For the quarter, US stocks experienced their worst performance compared to the rest of the world in 23 years, as noted by ZH. The Nasdaq was the biggest loser in March and Q1, tumbling over 11%, marking its worst start to a year since 2022.

Consequently, the Mega-cap sector has been down for six consecutive weeks, the longest stretch since the 2022 sell-off. The stagflation scenario was confirmed during Q1, with disappointing growth and surprising inflation.

Bond yields were lower for the quarter but reversed slightly in March. Rate-cut expectations fluctuated, ending with an expectation of three cuts. The dollar suffered its biggest decline, while Bitcoin fell below its 200-day moving average but remained above pre-election levels.

Gold was the standout performer, surging over 18% in Q1, its best start since 1986. Today, gold raced above $3,150, setting a record.