Market Report for Tuesday, April 8, 2025
Another spasmodic séance gripped Wall Street today as investors squinted over the tariff tarot cards. Stocks staged a 3% levitation act this morning before fading to the close, landing close enough to a bear market to count the fillings in its teeth.
Level Change 4/8/25 (%)
– – – – – – – – – – – – – – –
-0.8 Dow
-2.2 Nasdaq
-2.0 Nasdaq 100
-1.6 S&P 500
-2.2 S&P 400
-3.0 S&P 600
Even volatility has been volatile. The VIX popped to 60 yesterday, slipped under 40 this morning in a bit of false calm, then lunged back to 52 by the close.
“Classic bear market behavior,” say analysts, between sips of antacid. Indeed. Since February 19, the S&P 500 is down 19%, while the Nasdaq, ever the overachiever, has shed 24%.
It’s all about tariffs, naturally. Investors are still trying to get their arms around Trump’s trade war, but keep ending up in a bear hug with economic slowdown and inflation.
Stocks perked up this morning on signs that Team Trump may finally be catching on: in the saber rattling business, it helps to look like you’re willing to sheath one now and then. Both Treasury Secretary Bessent and National Economic Council head Hassett made conciliatory noises, name-dropping Japan and South Korea as potential partners in dialogue. Trump said China “wants to make a deal.” He’s waiting by the phone — and might be there a while. China’s Commerce Ministry said it would “fight to the end.”
Investors gulped. The end of what?
Then it all came unglued around 10:30, when the White House confirmed a 104% tariff on China will take effect tomorrow, punishment for failing to remove its retaliation against US retaliatory tariffs. The 104% figure struck onlookers as rather steep, more like a ransom demand than a tariff. “I’ve seen bribes smaller than that,” one trader was overheard telling a colleague clutching a stress ball.
In testimony to the Senate finance committee, US Trade Rep Jamieson Greer defended the administration’s sweeping tariffs. He said the US must “move away from an economy that’s based solely on the financial sector and government spending” to one that produces “real goods and services.”
Ron Wyden (D-OR) countered that the “aimless” and “chaotic” tariff rollout took the US economy “from the envy of the world to a laughing stock in less time than it took to finish March Madness.” Thom Tillis (R-NC) asked, “Whose throat do I get to choke if this proves to be wrong?”
Greer assured senators that Trump’s tariffs are already bearing negotiation fruit, adding that, no, there won’t be any exemptions or exclusions. These are tariffs for all seasons.
Chicago Fed President Austan Goolsbee said the tariffs are “way bigger” than anything the Fed modeled. His recent talks with business people found anxiety rising faster than a teenager’s temperature when the wi-fi goes out: “The anxiety is this is just going to take us back to a thing we spent the last five years desperately trying to get away from.” No, not Trump — inflation.
San Francisco Fed President Mary Daly repeated the one about policy being in a good place for the Fed to “tread slowly,” but she worries about inflation.
Sentiment at the National Federation of Independent Business has been way ahead of the curve — unfortunately, the curve of despondence. It fell for the third straight month in March, this time by 3.3 points to 97.4, just below the 51-year average of 98. The release noted that small businesses have reined in sales growth expectations, thanks to the fog surrounding whatever it is Washington currently calls policy implementation.
Don’t give up hope just yet. Recent jumpiness, plus the S&P’s double-dip into bear-market territory and back out, suggests investors are ready to stampede back into stocks on any good trade news.
Keep your fingers crossed for some.
— Jason Kelly
