Last week’s stock market recovery was aided by President Donald Trump’s decision to temporarily halt some of his tariffs. Nevertheless, the pressure continued to expand to other areas of the financial markets.
The dollar’s and Treasurys’ recent aggressive decline has raised worries that the United States’ “brand” as a desirable location for global investment capital has been damaged, maybe permanently.
In a research sent to MarketWatch, a group of interest-rate strategists at ING said that the idea of a “sell America Inc.” danger is now the most concerning story.
During a news conference after his announcement of a 90-day halt on fresh tariffs on several nations, Trump himself admitted that the bond market was “very tricky,” implying that it may have influenced his choice to partly soften his trade war. However, many investors have been taken aback by the simultaneous decline in bond and dollar prices.
November 2024 ’25 -20-15 -10 -5 0 5 10%
TLT SPX DXY
Although there has been no proof, there has been conjecture that investors in China and Japan may be halting their purchases of U.S. Treasuries or maybe selling off Treasurys altogether, which has increased the feeling of dread.
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Last week, 10-year and 30-year Treasury auctions were still attended by buyers. The ING team said in its analysis that it was not obvious whether pressure on the currency and bonds was coming from international or American investors.
Some investors are starting to see a buying opportunity among the volatility, even if markets are still gripped by the uncertainty created by Trump’s decision to start a trade war with China, one of the largest trading partners of the United States.
Large stock and bond declines have historically presented excellent opportunities for investors with a longer time horizon, according to Jason Browne, president of Alexis Investment Partners, who spoke to MarketWatch. According to Browne, his portfolio now includes long-duration Treasurys, and he believes in equities like Nvidia Corp. NVDA
+3.12%
The other “Magnificent Seven” members were appealing at these prices.
Trump said that despite the disruption caused by his tariff plan, the U.S. stock markets have not been ruined.
“Everything will find its footing at some point,” Browne told MarketWatch. “Give it some time; it’s only been a few days.”
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“Uncertainty at its peak”
The issue of whether investors have already passed the threshold of “peak uncertainty” is at the heart of the debate about how soon U.S. equities could rebound.
Trump’s readiness to halt some of his tariffs is probably the first step toward regaining the trust of investors and business leaders, according to David Lefkowitz, head of U.S. equities at UBS Group’s global wealth-management division, who made this statement on Friday.
Trump may have been able to curb rising recessionary predictions by showcasing his understanding of the economy and stock markets. In this case, “peak uncertainty” may have already passed.
This theory is supported by certain facts. In a research sent to MarketWatch on Friday, Julian Emanuel, an equities strategist at Evercore ISI, noted that Bloomberg’s trade-policy uncertainty index had begun to fall in recent days.
“[April 10] was the first decline in trade-policy uncertainty in weeks, but it might be a blip,” he added.
Emanuel further pointed out that well-known attitude indicators, such as the weekly poll conducted by the American Association of Individual Investors, had dropped to levels that are comparable to those of earlier “generational buying” chances in March 2009 and October 1990.
In what way might stocks find a floor?
Few experts anticipate a quick recovery to the market’s February level, when the S&P 500 index last reached a record high, even if equities do find a floor here.
According to Mott Capital founder Michael Kramer, there are just too many hazards that might materialize over the next months. The corporate earnings season has just started, and many of the largest firms in America may decide to lower their profit projections due to uncertainty surrounding trade policy, such as Delta Air Lines (DAL).
+3.86%
done not long ago.
In a research released to MarketWatch earlier this week, a group of strategists at Bank of America said that when businesses abandon their forecast, their stock often performs poorly.
Additionally, investors will be watching economic data that is scheduled to be released in the coming months attentively for any indications that Trump’s tariffs are contributing to inflationary pressures, a slowdown in GDP, or an increase in unemployment.
Typically, grinding bear markets during recessions cause the S&P 500 to drop by at least 20%. According to FactSet statistics, the index was down less than 11% as of Friday’s close from its closing high on February 19.
For his part, Kramer believes the market will continue to pressure the government until Trump gives in. The portfolio manager anticipates that markets will continue to be turbulent until that time.
Kramer said, “I’m not sure if announcing a few trade deals will help.” “Until Trump essentially reverses the entire situation, I believe the market will continue to push this.”
Others said that even a Trump trade reversal would not be sufficient to appease irate investors. At this stage, the Federal Reserve may need to reduce interest rates further in order to boost investor confidence.
“I don’t think that just pressing a hypothetical “undo” button would return us to the extremely positive and less volatile climate that we witnessed as 2025 approached,” said Ryan Dykmans, chief investment officer of Dunham & Associates Investment Counsel.
“It might require a combination of Fed easing, tax breaks, and ongoing deregulation,” he stated.
The DJIA, or Dow Jones Industrial Average
+1.56%
COMP (Nasdaq Composite)
+2.06%
and the SPX and S&P 500
+1.81%
all saw robust recoveries throughout the last week. The S&P 500 ended the week at 5,363.36, up 289.28 points, or 5.7%, to reach its highest weekly percentage-point increase since November 2023.
The yield on the 10-year Treasury
TMUBMUSD10Y
4.470%
increased this week by 50 basis points to 4.492%. According to Dow Jones statistics, it was the yield’s largest weekly rise since November 16, 2001, as of Friday at 3 p.m. Eastern time. The 30-year Treasury bond’s yield (TMUBMUSD30Y)
4.878%
also had a significant increase, marking its largest weekly rise since April 1987.
The euro (EURUSD)
+0.10%
It had its greatest week versus the dollar DXY, rising 3.7% to $1.136.
-0.52%
since March.