Trump speaks out as Liberation Day tariffs shock market
In this DML Report…
President Donald Trump predicted a stock market rebound, despite a sharp plunge triggered by his “Liberation Day” tariffs launched earlier this week, claiming “markets are going to boom” in a press conference addressing the sell-off. The S&P 500 dropped over 4%, the Nasdaq fell nearly 5%, and the Dow shed 1,400 points—marking the S&P’s worst day since September 2022—after Trump’s April 2 announcement of reciprocal tariffs, including 10% on all imports and higher rates like 25% on Canada and Mexico. Economists warn these duties could spark a recession, with Goldman Sachs raising the odds to 20% and betting markets like Kalshi hitting 54% for a 2025 downturn, citing inflationary pressures expected to push consumer prices up.
Trump’s tariffs, detailed in a White House Rose Garden speech, aim to match foreign duties on U.S. goods, closing loopholes like the “de minimis” rule that let e-commerce firms dodge taxes on low-value imports from China. He argued the policy would force companies to bring jobs back to America, shrugging off Thursday’s market rout—Nasdaq’s steepest drop since 2020—and pointing to past volatility, like a 2018 China trade spat where stocks later recovered. Treasury yields sank to 4.04% from 4.20% as investors flocked to bonds, signaling fears, yet Trump insisted the economy would thrive, claiming tariff talks with Canada’s Mark Carney showed progress despite Carney’s threat of retaliation.
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Global markets echoed the U.S. decline, with Japan’s Nikkei and Europe’s Stoxx 600 each closing 2.7% lower, while U.S. firms like Tesla (down 6%), Nvidia (7%), and Dollar Tree (11%) took heavy hits due to supply chain reliance. Fed forecasts shifted to four rate cuts in 2025, up from two or three, as High-Frequency Economics’ Carl Weinberg predicted a 10% GDP hit in Q2 2025—potentially worse than post-COVID shocks. Trump doubled down, calling the market dip a buying opportunity and touting past wins, like forcing Mexico to curb migration with tariff threats, though critics highlight rising costs and trade war risks, with no immediate rebound in sight.