US stocks are on pace to post the first daily gain after Trump announced tariffs on US trading partners April 2. Stocks briefly fell into the bear market earlier this week. In response, China raised its tariff on goods imported from the US to 84%. The countermeasures are effective April 10, and follow the White House slapping a 104% tax on many Chinese imports.
Some trading desks saw a spike in retail buying. JPMorgan Chase & Co. global quantitative and derivatives strategist Emma Wu said retail traders bought $719 million in first hour of the day, higher than the average volume in the last month.
Earlier in the session, Trump indicated he was at least paying attention to the market volatility, writing on Truth Social that “this is a great time to buy” and urging Americans to “BE COOL” amid the turbulence.
“While it’s very bullish for markets short-term, it’s a temporarily sign if a relief but it doesn’t solve the tariff problem,” Brent Kochuba, Founder of SpotGamma, said of the pause.
The latest change of direction shook investors across Wall Street.
“Trying to keep up with it is insane,” said Ross Mayfield, an investment strategist at Baird Private Wealth Management, referring to the President’s online comments. “If that’s enough to move markets, then I guess that it’s the kind of market we’re in.”
US stocks had been at the the most oversold since the depths of the pandemic, and traders are looking for a market bottom. One technical level to watch is is 4,910, the roughly 20% threshold below the S&P 500’s February peak, which provided key support late Tuesday.
There are also signs of support for the S&P 500 around 5,000. Goldman Sachs Group Inc. partner John Flood said this is a level where long-term investors are starting to buy the dip. “From my conversations with longer-duration investors, it feels like they will start scale buying the S&P 500 at 5,000 and get more aggressive in the mid-4,000s,” he wrote in a note to clients on Tuesday.
To Societe Generale’s Arthur van Slooten, investors are focused on potential policy reactions to tariffs, such as negotiations, retaliation and opportunities for a market rebound.
“For investors that are ready to accept a high level of market volatility a ‘tarrific’ entry-point has just been created,” van Slooten wrote.
US companies are already struggling to navigate the uncertainty. Amazon has canceled orders for multiple products made in China and other Asian countries, a sign that it wants to limit exposure to heavy import taxes. Delta Air Lines Inc. withdrew its full-year financial guidance, declining to reaffirm a forecast issued in January. Shares in large US and European drugmakers slid after President Donald Trump said the US was planning to announce “a major tariff on pharmaceuticals” soon.
Shares in oil and gas producers dropped Wednesday morning, following crude prices lower as the intensifying trade war endangers energy demand.
