U.S. Treasury Secretary Scott Bessent appeared on Fox Business Wednesday to praise President Donald Trump's aggressive trade stance and decry China's latest move to hike tariffs on <a href="https://www.benzinga.com/25/04/44708618/china-retaliates-with-massive-84-tariff-hike-on-us-goods-amid-escalating-trade-war">U.S. goods to 84%</a>.



What Happened: "They have the most imbalanced economy in the history of the modern world," Bessent said, referring to Beijing. "They can raise their tariffs, but so what? Their exports to the U.S. are five times ours to them. This escalation is a loser for them."



Bessent warns that China's economy is already in a deep structural slowdown, weighed down by <a href="https://www.benzinga.com/real-estate/24/05/38643079/chinas-new-homes-market-is-in-a-state-of-freefall">a real estate crisis</a> and weak consumer demand.



Meanwhile, Trump's tariff-induced sell-off has <a href="https://www.benzinga.com/markets/bonds/25/04/44679299/trump-tariffs-triggers-historic-equity-wipeout-outpacing-covid-lehman-crashes-with-no-bond-rally-to-cushion-the-blow-says-lawrence-mcdonald">wiped out $9 trillion</a> in equity capital over six weeks. It rivals the $9 trillion lost during the COVID crash in 2020 over one month. It also surpasses the $8 trillion erased during the 12 months following the Lehman Brothers collapse in 2008. Also, U.S. consumer confidence is at its <a href="https://www.benzinga.com/government/regulations/25/03/44475192/consumer-confidence-falls-to-lowest-since-2022-as-inflation-tariff-worries-grow">lowest level since late 2022</a>.



But Bessent insists that the trade war is compounding China's economic problems. Any attempt by Beijing to manipulate its currency to offset tariffs would damage its own economy, he argues.



"They're going from bad to terrible," Bessent said. "If China tries to devalue their way out of this, then that's a tax on the rest of the world."



Bessent added that such a move would likely trigger a global chain reaction, forcing other countries like Japan, South Korea, and the European Union to raise tariffs in response to a weaker yuan. He claims that would further isolate China economically.



"Everyone is coming to the table. Basically, China is surrounded," Bessent said, referring to growing trade cooperation between the U.S. and key Asian allies like Vietnam, Japan and South Korea.



Bessent also tied the tariff push to national security, pointing to China's role in the fentanyl epidemic that continues to ravage the U.S. population. He said that addressing the flow of precursor chemicals from China should be a top priority in any negotiations.



"Distributing drugs in China is punishable by death. Why don't they apply the same standard to the people who are exporting these chemicals to the U.S.?" Bessent asked.



He said the original trigger for Trump's tariff escalation was China's failure to stop fentanyl exports. This, he says, remains a valid reason to maintain pressure.



See Also: <a href="https://www.benzinga.com/government/regulations/25/04/44710975/wall-streets-american-exceptionalism-trade-falters-as-dollar-stocks-bonds-all-slide">Wall Street&#8217;s &#8216;American Exceptionalism&#8217; Trade Falters As Dollar, Stocks, Bonds All Slide</a>



Why It Matters: Bessent says China's retaliatory tariff action in response to the U.S. imposing a 104% tariff on Chinese goods will hurt its own fragile economy far more than it impacts the U.S.



Chinese officials disagree. "As the world's second-largest economy and the second-largest consumer market, China will only continue to open its doors wider, regardless of the changing international landscape," China's Foreign Ministry said in a <a href="https://www.fmprc.gov.cn/zyxw/202504/t20250405_11588935.shtml" target="_blank" rel="noreferrer noopener">statement</a> on April 5.



Markets remain in turmoil, with the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) nearing bear market territory. Pressure is now extending to Treasuries as well.



The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) plunging 6.5% over four sessions. But Bessent played down fears of a systemic crisis, characterizing the selloff in Treasuries as a normal market shakeout.



"This is an uncomfortable but normal deleveraging. Some large leverage players are experiencing losses and being forced to reduce exposure," Bessent said.



As leverage comes down, the bond market will stabilize, he said. Bank deregulation will also create new, more durable demand for Treasuries, he added.



What&#8217;s Next: Bessent says the White House is moving to pass a tax extension package and roll out further deregulation measures aimed at reigniting private sector investment.



He called the negotiations "substantial" and said Trump's direct involvement is accelerating momentum on Capitol Hill. Deregulation, he noted, takes time to show results, but will be "powerful" once implemented.



"We are going to releverage the private sector through smart, safe and sound bank deregulation," Bessent said. "Part of that includes changing the Supplementary Leverage Ratio so banks can buy more Treasuries without a big capital charge."



Bessent said Trump's economic plan is about reversing trends from the previous administration. 



It&#8217;s worth noting that, under the Biden administration, the U.S. unemployment rate was 3.4% at one point. The last time it was that low <a href="https://www.benzinga.com/general/politics/23/05/32369714/its-been-70-years-since-a-president-with-unemployment-at-3-4-had-approval-ratings-as-low-as-bide">was in 1969</a>.



"We're reprivatizing the economy," Bessent said. &#8220;As we get the budget under control and inflation under control, energy prices will come down, and then the private sector will have room to grow.&#8221;



Read now: 



<ul>
<li><a href="https://www.benzinga.com/markets/equities/25/04/44711174/how-to-trade-spy-as-china-spews-retaliatory-tariffs-technical-analysis">How To Trade SPY As China Spews Retaliatory Tariffs: Technical Analysis</a></li>
</ul>



Image: Shutterstock

Asia

Politics

'From Bad To Terrible': Treasury Secretary Slams Beijing's Retaliatory Tariffs As Trump Trade Agenda Wipes Trillions

At the start of 2025, exposure to the U.S. dollar and American assets like equities and Treasuries was a staple in global investment portfolios, riding high on the back of a resilient economy and a <a href="https://www.benzinga.com/news/econ-s">dominant U.S. exceptionalism narrative. </a>



For years, the global investment narrative leaned heavily on American dominance. Strong tech innovation, high productivity and relatively better demographics helped maintain a performance gap between U.S. equities and their global peers.



That conviction, however, is unraveling just four months later, as escalating trade tensions—spurred by President Donald Trump&#8216;s aggressive tariff push—have dramatically altered the outlook for the world&#8217;s largest economy.



The U.S. dollar and American assets, including both stocks and bonds, are experiencing a broad selloff, raising concerns among investors and challenging assumptions about the stability of U.S. markets.



<h3 class="wp-block-heading">Why Investors Perceive The US Isn't Safe Anymore</h3>



After several days of carnage on Wall Street, investor sentiment remains deeply negative, but the market reaction is beginning to signal something more concerning than just an equity selloff. 



The U.S. Treasury market, traditionally a safe haven during periods of market stress, is no longer playing its usual role.



Yields on the 10-year U.S. Treasury note spiked by 17 basis points during Wednesday's morning session, reaching 4.45%. That move — occurring in tandem with steep equity losses — is counterintuitive. 



Typically, bonds rally and yields fall as investors seek safety when stocks tumble. The SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) is now teetering on the brink of a bear market, down nearly 20% from its recent peak, yet Treasuries are offering no refuge.



Instead, bond prices are falling sharply. The iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>) has declined 3.5% over the last three trading sessions and slid another 3% in premarket trading on Wednesday. 



This marks the worst four-day stretch since 2022, when Treasuries plunged amid the Federal Reserve's rapid-fire rate hikes to combat soaring inflation.



Unlike in 2022, the current bond selloff appears to be driven less by inflation or rate expectations and more by growing concerns about the broader appeal of U.S. assets.



<h3 class="wp-block-heading">Investors Are Liquidating Everything, Even Risk-Free Treasuries</h3>



Worryingly, it suggests that investors are liquidating even high-quality, dollar-denominated holdings to raise cash, as noted by a Citi research report published this week.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">Citi on yesterday&#39;s &quot;mysterious rise&quot; in Treasury yields: &quot;This could be an early sign that investors are looking to liquidate positions even in high-quality assets to raise cash.&quot; <a href="https://t.co/8DGVyzq1DG">pic.twitter.com/8DGVyzq1DG</a>&mdash; Tracy Alloway (@tracyalloway) <a href="https://twitter.com/tracyalloway/status/1909575344908026297?ref_src=twsrc%5Etfw">April 8, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



&#8220;Much of the recent focus has been on the anomalous positive correlation between USD and US stocks,&#8221; Bank of America Global Rates and Currencies team wrote in a note Wednesday. 



"The correlation shifts are consistent with rising U.S. risk premium, ‘peak U.S. exceptionalism,'" said Bank of America. The note advised watching official data and Treasury auctions to assess the changing nature of foreign demand, particularly from unhedged buyers.



"The backdrop of U.S. exceptionalism in recent years has leaned against FX-hedging U.S. equities from a foreign investor perspective," wrote Goldman Sachs analysts. "In a few short months, those conclusions have flipped."



Goldman's FX strategist Michael Cahill said that if tariffs continue to erode corporate margins and reduce real consumer incomes, the central pillar of a strong dollar may crack. The dollar index is already showing signs of strain after months of bullishness.



&#8220;80 days ago in Davos, most common phrase was &#8220;American exceptionalism.&#8221; You heard everywhere. I would say probably every meeting I went to, everyone is focusing on how to do more in the United States. And obviously that&#8217;s been thrown out right now,&#8221; said BlackRock CEO Larry Fink during an event at the Economic Club of New York. 



Jefferies strategist Chris Woods also believes that the U.S. has likely peaked in terms of its share of global stock market capitalization. He sees limited upside for U.S. equities amid high valuations and slowing growth, and said that emerging market equities could begin to outperform if the dollar weakens further.



According to DataTrek Research, the so-called "American exceptionalism trade" relied on a virtuous cycle: rising stock prices drove capital allocation and underpinned economic policy that reinforced financial markets.



This self-sustaining loop has endured for 15 years, but a prolonged bout of volatility could cause lasting damage.



"A few weeks of turmoil does not necessarily threaten it. A few months of ever-lower stock prices, however, risks permanently damaging investors' confidence in its foundations," DataTrek said.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">1/2 The bedrock of the "American exceptionalism" trade over the last 15 years has been the virtuous circle connecting stock prices, the allocation of corporate/societal capital, and the US government's economic policies&#8230;&mdash; Nick Colas &amp; Jessica Rabe (DataTrek) (@DataTrekMB) <a href="https://twitter.com/DataTrekMB/status/1909333119456387303?ref_src=twsrc%5Etfw">April 7, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The sharp selloff in U.S. Treasuries is not indicative of systemic trouble, Treasury Secretary Scott Bessent said Wednesday, calling the move a typical market dislocation driven by leveraged investors unwinding positions — not a sign of deeper instability.



While downplaying domestic risks, Bessent did strike a more hawkish tone on China, suggesting that Beijing could provoke broader global instability if it retaliates against tariffs by weakening its currency.



The U.S. imposed a 104% tariff on Chinese imports, with the impact beginning overnight, while Beijing fired back by raising tariffs on American goods to 84%.



Read now: 



<ul>
<li><a href="https://www.benzinga.com/25/04/44708618/china-retaliates-with-massive-84-tariff-hike-on-us-goods-amid-escalating-trade-war">Xi Jinping Hits Back: China Raises Tariffs On US Goods To 84%, Doubling Down On Trade War</a></li>
</ul>



Photo: FOTOGRIN/Shutterstock

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Wall Street's 'American Exceptionalism' Trade Falters As Dollar, Stocks, Bonds All Slide

Xi Jinping&#8216;s China has unveiled a significant hike in retaliatory tariffs on U.S. products, intensifying the ongoing trade war between the world&#8217;s two biggest economies.



What Happened: On Wednesday, China declared that it will raise its reciprocal tariffs on U.S. goods to 84% from the previous 34% from April 10, <a href="https://www.scmp.com/economy/china-economy/article/3305873/china-fires-back-stern-rebuke-trumps-tariff-escalation?module=top_story&amp;pgtype=homepage">reported</a> the South China Morning Post. 



This move comes in the wake of an intensifying trade conflict between the U.S. and China. This comes after the latest U.S. tariff hike — which brings levies on Chinese goods to more than 100% — took effect at the start of April 9.



In response to the new U.S. tariffs, the Ministry of Commerce not only filed a complaint with the World Trade Organization but also added six American companies to its unreliable-entity list. Additionally, it imposed export controls on 12 U.S. firms, prohibiting Chinese companies from supplying them with dual-use items—products that can serve both civilian and military purposes.



"China will firmly defend its interests, multilateral trade system and international economic order," stated the Chinese finance ministry online.



SEE ALSO:&nbsp;<a href="https://benzinga.com/markets/25/04/44706492/trump-predicts-tremendous-thundering-landslide-in-2026-midterms-says-tariffs-will-help-republicans-win-bi" target="_blank" rel="noreferrer noopener">Trump Predicts &#8216;Tremendous, Thundering Landslide&#8217; In 2026 Midterms, Says Tariffs Will Help Republicans Win Big</a>



Why It Matters: This announcement comes on the heels of President Donald Trump&#8216;s <a href="https://www.benzinga.com/markets/equities/25/04/44704005/trumps-104-tariff-on-chinese-imports-sends-stock-futures-plunging-dow-falls-over-500-points">104% tariff on Chinese imports</a>, which sent stock futures plunging and major indexes to significant lows. 



Despite the escalating trade war, many U.S. companies <a href="https://www.benzinga.com/news/global/25/04/44700937/us-companies-stick-with-china-as-trump-tariffs-take-effect-report">have chosen to stick </a>with their operations in China, viewing it as a strategic value. A report commissioned by the U.S. Chamber of Commerce Foundation revealed that a majority of surveyed firms still see value in maintaining or expanding their presence in China, even as they increasingly view it as their biggest geopolitical risk.



This escalating trade conflict is likely to have far-reaching implications on the global economy, and all eyes are on how this situation will unfold in the coming days.



During the U.S. premarket session, U.S.-listed Chinese stocks traded mixed. Baidu Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BIDU#NASDAQ">BIDU</a>) and Nio Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NIO#NYSE">NIO</a>) were in the red, while Xpeng Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XPEV#NYSE">XPEV</a>) and Li Auto Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/LI#NASDAQ">LI</a>) saw modest gains.



<ul>
<li>READ MORE:&nbsp;<a href="https://benzinga.com/markets/cryptocurrency/25/04/44699720/bitcoin-ethereum-xrp-dogecoin-extend-losses-as-white-house-hammers-chinese-goods-with-104-tariff" target="_blank" rel="noreferrer noopener">Bitcoin, Ethereum, XRP, Dogecoin Extend Losses As White House Hammers Chinese Goods With 104% Tariff &#8211; Benzinga</a></li>
</ul>



Image via Shutterstock



Disclaimer:&nbsp;This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

News

Markets

BIDU

XPEV

Xi Jinping Hits Back: China Raises Tariffs On US Goods To 84%, Doubling Down On Trade War

Delta Air Lines, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DAL#NYSE">DAL</a>) shares are trading higher premarket after the company reported better-than-expected <a target="_blank" href="https://www.benzinga.com/pressreleases/25/04/n44707201/delta-air-lines-announces-march-quarter-2025-financial-results" rel="noreferrer noopener">first-quarter 2025 results</a>.



Delta reported fourth-quarter operating revenue growth of 2% year-over-year to $14.04 billion, beating the consensus of $13.02 billion. Adjusted operating revenue was $12.98 billion (+3.3% YoY)



The adjusted average fuel price was $2.47 per gallon, down from $2.79 in last year&#8217;s quarter. Adjusted EPS was $0.46 (+2% YoY), beating the consensus of $0.38.



Related: <a target="_blank" href="https://www.benzinga.com/25/04/44705362/top-wall-street-forecasters-revamp-delta-air-lines-price-expectations-ahead-of-q1-earnings" rel="noreferrer noopener">Top Wall Street Forecasters Revamp Delta Air Lines Price Expectations Ahead Of Q1 Earnings</a>



Total passenger revenue for the quarter grew 3% year over year to $11.48 billion; cargo revenue grew 17% year over year to $208 million, and Other revenue was $2.352 billion (-4% year over year).



Delta recorded an adjusted operating income of $591 million, down from $640 million YoY, with an adjusted operating margin of 4.6%, down 50 bps.



Adjusted operating expenses increased by 4% YoY to $12.388 billion, and Adjusted Non-fuel costs were $9.875 billion (+7% YoY) for the quarter.



Delta generated an adjusted operating cash flow of $2.44 billion (-1% Y/Y) in the March quarter, and free cash flow stood at $1.28 billion.



As of the March quarter, Delta reported adjusted net debt of $16.9 billion, down $1.1 billion from year-end 2024. Total liquidity was $6.8 billion, including $3.1 billion in undrawn revolver capacity.



The passenger load factor dropped 81.4% from 82.7% last year. DAL&#8217;s Air Traffic Liability ended the quarter at $10 billion.



Also Read: <a target="_blank" href="https://www.benzinga.com/general/travel/25/04/44671680/which-us-airline-is-facing-the-strongest-industry-tailwinds" rel="noreferrer noopener">Which US Airline Faces The Strongest Industry Tailwinds?</a>



Delta&#8217;s Chief Financial Officer, Dan Janki, noted that the company delivered better-than-expected results despite early-year weather challenges. &#8220;Our teams ran a strong operation… enabling us to drive efficiency and deliver non-fuel unit cost growth of up 2.6 percent over prior year,&#8221; he said. Janki added that as Delta reduces capacity growth, it is &#8220;taking incremental action to manage costs,&#8221; and expects non-fuel unit cost growth to align with its long-term target of low-single-digit increases in the second quarter and beyond.



&#8220;With broad economic uncertainty around global trade, growth has largely stalled.&nbsp;In this slower-growth environment, we are protecting margins and cash flow by focusing on what we can control.&nbsp;This includes reducing planned capacity growth in the second half of the year to flat over last year while actively managing costs and capital expenditures,&#8221; commented Ed Bastian, Delta&#8217;s chief executive officer.



&#8220;We expect June quarter profitability of $1.5 to $2 billion.&nbsp;Given the lack of economic clarity, it is premature at this time to provide an updated full-year outlook.&nbsp;Given our position of strength, our bias toward action, and the decline in fuel prices, Delta remains well positioned to deliver solid profitability and free cash flow for the year. I expect that our financial results will continue to lead the industry and validate our strategy to create differentiation and greater financial durability,&#8221; added Bastian.



Also Read: <a target="_blank" href="https://www.benzinga.com/25/04/44634938/airline-earnings-at-risk-as-demand-dips-amid-weak-business-travel-low-transborder-traffic-doge-cuts-analyst-says" rel="noreferrer noopener">Airline Earnings At Risk As Demand Dips Amid Weak Business Travel, Low Transborder Traffic, DOGE Cuts: Analyst Says</a>



Second Quarter 2025 Outlook: DAL&#8217;s total revenue is expected to be down 2% to up 2% over the prior year, with an operating margin of 11%—14%.



Adjusted Earnings per share are forecasted between $1.70 and $2.30 versus the $2.39 estimate.



Delta is not reaffirming its full-year 2025 financial guidance and plans to provide an update later in the year as market visibility improves.



Price Action: DAL shares are trading lower by 0.45% at $35.73 premarket at the last check on Wednesday.



Image via Shutterstock

Earnings

Guidance

Delta Air Lines Wants To Protect Margins And Cash Flow Citing Economic Uncertainty, Does Not Reaffirm FY25 Outlook

U.S. stock futures were volatile on Wednesday after the equities reversed gains on Tuesday following President Donald Trump&#8216;s 104% tariff on China. Futures of major benchmark indices were mixed in premarket.



The White House Press Secretary Karoline Leavitt <a href="https://www.benzinga.com/economics/macro-economic-events/25/04/44698697/markets-reverse-gains-as-trumps-104-china-tariff-announcement-rattles-wall-street">confirmed that Trump&#8217;s retaliatory</a> 104% tariff on Chinese imports would take effect at 12:01 a.m. ET Wednesday. Her remarks triggered a sharp deterioration in market sentiment and reignited fears of a global trade escalation.



Despite growing geopolitical concerns surrounding China, a new U.S. Chamber of Commerce Foundation <a href="https://www.benzinga.com/news/global/25/04/44700937/us-companies-stick-with-china-as-trump-tariffs-take-effect-report">report highlighted by</a> The Wall Street Journal reveals that most surveyed companies still find significant strategic advantages in staying or growing their operations there.



This finding underscores a divergence between Washington&#8217;s &#8220;selective decoupling&#8221; efforts and the deep reliance of corporate America on China&#8217;s manufacturing, workforce, and consumer base.



Major indices were significantly down from recent highs as of Tuesday&#8217;s close. The S&amp;P 500 was 18.95% lower, the Nasdaq 100 was down 23.10%, and the Dow Jones declined 16.48%, following a week of tariff-driven selloffs.



The 10-year Treasury bond yielded 4.35% and the two-year bond was at 3.80%. However, the CME Group's FedWatch&nbsp;<a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">tool</a>‘s projections showed markets pricing a 58.3% likelihood of the Federal Reserve keeping the current interest rates unchanged in its May meeting.



<figure class="wp-block-table is-style-stripes"><table style="overflow:auto; height: 90px; display: block;"><tbody><tr><td>Futures</td><td>Change (+/-)</td></tr><tr><td>Dow Jones</td><td>-0.06%</td></tr><tr><td>S&amp;P 500</td><td>0.22%</td></tr><tr><td>Nasdaq 100</td><td>0.64%</td></tr><tr><td>Russell 2000</td><td>-0.17%</td></tr></tbody></table></figure>



The SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) and Invesco QQQ Trust ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), which track the S&amp;P 500 index and Nasdaq 100 index, respectively, were higher in premarket on Wednesday. The SPY was up 0.30% to $497.98, while the QQQ advanced 0.63% to $418.70, according to <a href="https://pro.benzinga.com/dashboard">Benzinga Pro</a> data.



Cues From Last Session:



Consumer discretionary, materials, and energy sectors led a broad decline in U.S. stocks on Tuesday, as the S&amp;P 500 closed entirely in negative territory.



The selloff intensified after the President&#8217;s 104% tariff.



Among individual tech giants, Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), Tesla Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>), and Amazon.com Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>) saw significant drops, while Nvidia Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) also traded lower.



In other news, Walgreens Boots Alliance Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/WBA#NASDAQ">WBA</a>) reported better-than-expected earnings, and small business optimism hit its lowest point since October 2024.



The Dow Jones index slumped 320 points or 0.84% to 37,645.59, whereas the S&amp;P 500 index fell 1.57% to 4,982.77. Nasdaq Composite declined to end 2.15% lower at 15,267.91, and the small-cap gauge, Russell 2000, tumbled 2.73% to 1,760.71.



<figure class="wp-block-table is-style-stripes"><table style="overflow:auto; height: 90px; display: block;"><tbody><tr><td>Index</td><td>Performance (+/-)</td><td>Value</td></tr><tr><td>Nasdaq Composite</td><td>-2.15%</td><td>15,267.91</td></tr><tr><td>S&amp;P 500</td><td>-1.57%</td><td>4,982.77</td></tr><tr><td>Dow Jones</td><td>-0.84%</td><td>37,645.59</td></tr><tr><td>Russell 2000</td><td>-2.73%</td><td>1,760.71</td></tr></tbody></table></figure>



Insights From Analysts:



In this environment of heightened uncertainty, Julia Khandoshko, CEO at European broker Mind Money, advises investors to focus on capital preservation rather than chasing high returns.



&#8220;The most rational strategy in the short term is to focus on liquidity, reliable fixed-income instruments, and safe haven assets such as gold. This is not an attempt to make money but a need to preserve capital in conditions of high uncertainty,&#8221; she adds.



Even nations currently enjoying a trade surplus shouldn&#8217;t be complacent, warns Khandoshko. She points to the danger of stagflation – a damaging combination of stalled economic growth and ongoing inflation – using Japan&#8217;s long-lasting difficulties as a stark example.



The widening 3-year SOFR swap spread is signaling <a href="https://www.benzinga.com/government/regulations/25/04/44705659/cathie-wood-points-to-serious-liquidity-issues-as-overnight-borrowing-rate-spreads-widen-o">growing liquidity problems</a> within the U.S. banking system, according to Ark Invest CEO Cathie Wood. She argues that this crisis necessitates swift solutions, including a trade agreement and aggressive Federal Reserve intervention, emphasizing the urgency with &#8220;No more time to waste.&#8221;



This spread, a key indicator of U.S. banking liquidity, represents the difference between the fixed rate in a SOFR-based swap and the yield on a government bond of the same maturity.



SOFR, the Secured Overnight Financing Rate, is the benchmark reflecting the cost of overnight cash borrowing used across various financial transactions, and its widening spread adds to existing concerns about emerging liquidity issues in the U.S. market.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">As Zerohedge notes, this swap spread is suggesting serious liquidity issues in the US banking system. This crisis is calling out for some kind of Mar-a-Lago Accord on free trade, in tandem with serious support from the Fed? No more time to waste. <a href="https://t.co/5VXYqLJemJ">https://t.co/5VXYqLJemJ</a>&mdash; Cathie Wood (@CathieDWood) <a href="https://twitter.com/CathieDWood/status/1909816910033678801?ref_src=twsrc%5Etfw">April 9, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Meanwhile, Ed Yardeni of Yardeni Research suggests that "Fixed-income investors may be starting to worry that the Chinese and other foreigners might start selling their U.S. Treasuries," after Trump levied 104% tariff duties on China after the latter's retaliation.



Adding to the market unease, credit markets are exhibiting increasing strain, evidenced by a rapidly widening yield spread between high-yield corporate bonds and the 10-year Treasury.



Data from Yardeni indicates this spread reached 407 basis points as of April 7th, signaling declining investor confidence and growing concerns about an economic slowdown or potential recession.



"The good news is that the Fed Put will probably make a quick comeback if this happens," said Yardeni.



See Also: <a href="https://www.benzinga.com/money/how-to-trade-futures">How to Trade Futures</a> 



Upcoming Economic Data



Here&#8217;s what investors will keep an eye on Wednesday:



<ul>
<li>February&#8217;s wholesale inventories data will be released by 10:00 a.m., and Richmond Fed President Tom Barkin will speak at 11:00 a.m. ET.</li>
</ul>



<ul>
<li>Minutes of Fed&#8217;s March FOMC meeting will be out by 2:00 p.m. ET.</li>
</ul>



Stocks In Focus:



<ul>
<li>Delta Air Lines Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DAL#NYSE">DAL</a>) declined 1.11% in premarket on Tuesday before the opening bell. Analysts expect a quarterly earnings of 38 cents per share on revenue of $13.02 billion.</li>



<li>Simply Good Foods Co. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SMPL#NASDAQ">SMPL</a>) was up 1.45% as Wall Street expects it to report earnings of 40 cents per share on revenue of $354.43 million before the opening bell.</li>



<li>Constellation Brands Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/STZ#NYSE">STZ</a>) was down 1.10% ahead of its earnings call after the closing bell. Analysts expect a quarterly earnings of $2.28 per share on revenue of $2.13 billion.</li>



<li>Kura Sushi USA Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/KRUS#NASDAQ">KRUS</a>) dropped 3.28% after posting downbeat results for its second quarter. The company also said it sees FY25 total sales of $275 million to $279 million, versus market estimates of $280.741 million.</li>



<li>Aehr Test Systems (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AEHR#NASDAQ">AEHR</a>) climbed 1.92% after posting better-than-expected earnings and sales results for its third quarter on Tuesday.</li>



<li>Redwire Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RDW#NYSE">RDW</a>) was 2.98% higher after it announced to jointly pursue commercial lunar missions with ispace U.S., including NASA CLPS, leveraging Redwire&#8217;s space infrastructure and ispace U.S.&#8217;s lunar transportation.</li>



<li>Marsh &amp; McLennan Companies Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MMC#NYSE">MMC</a>) jumped 17.83% as it announced the acquisition of Arthur Hall Insurance on April 2.</li>



<li>Vincerx Pharma Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VINC#NASDAQ">VINC</a>) plunged 52.39% after disclosing that it has terminated the previously announced non-binding Letter of Intent with Global Digital Holdings regarding a potential merger.</li>



<li>Cartesian Therapeutics Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/RNAC#NASDAQ">RNAC</a>) tumbled 36.97% after reporting 12-month data for lead cell therapy in myasthenia gravis patients.</li>
</ul>



Commodities, Gold, And Global Equity Markets:



Crude oil futures were trading lower in the early New York session by 2.59% to hover around $57.82 per barrel.



Gold Spot US Dollar advanced 2.04% to hover around $3,043.09 per ounce. Its fresh record high stood at $3,168.04 per ounce. The U.S. Dollar Index spot was lower by 0.49% at the 102.450 level.



Asian markets were mostly lower on Wednesday. Except for China&#8217;s CSI 300 and Hong Kong's Hang Seng index, India's S&amp;P BSE Sensex, Japan's Nikkei 225, Australia's ASX 200, and South Korea's Kospi index declined. European markets were also lower in early trade.



Read Next:



<ul>
<li><a href="https://www.benzinga.com/government/regulations/25/04/44705659/cathie-wood-points-to-serious-liquidity-issues-as-overnight-borrowing-rate-spreads-widen-on-spiking-treasury-yields-this-crisis-is-calling-out-for-some-kind-of-mar-a-lago-accord">Cathie Wood Points To &#8216;Serious Liquidity Issues&#8217; As Overnight Borrowing Rate Spreads Widen On Spiking Treasury Yields</a></li>
</ul>



Photo courtesy: Shutterstock

Futures

Economics

Federal Reserve

Pre-Market Outlook

Trading Ideas

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AEHR

AMZN

KRUS

NVDA

RNAC

SMPL

TSLA

VINC

US Stocks Futures Trade Mixed Ahead Of Opening Bell: 'Preserve Capital In Conditions Of High Uncertainty,' Says Expert

President Donald Trump has declared that his administration is on the brink of imposing a significant tariff on <a href="https://in.benzinga.com/markets/25/04/44627820/trumps-reciprocal-tariffs-on-india-exempt-pharma-easing-mark-cubans-price-hike-concerns">pharmaceuticals imported from foreign countries.</a>



What Happened: President Trump, on Tuesday, disclosed plans for a &#8220;major tariff&#8221; on foreign pharmaceuticals. Trump is hopeful that this move will prompt drug companies to shift their operations to the U.S., <a href="https://www.theguardian.com/australia-news/2025/apr/09/donald-trump-flags-major-tariff-on-pharmaceuticals-as-us-senator-criticises-whack-on-australia">reported</a> The Guardian.



&#8220;We&#8217;re going to be announcing very shortly a major tariff on pharmaceuticals&#8230; when they hear that they will leave China, they will leave other places because&#8230; most of their product is sold here,&#8221; Trump expressed at a National Republican Congressional Committee dinner.



Despite exempting pharmaceuticals from the recent round of reciprocal tariffs, Trump has been hinting for a long time that the drug industry would be a target. The President is of the view that the tariff will drive drug companies to return to the U.S., considering it is a significant market for their products. &#8220;The advantage we have over everybody is that we&#8217;re the big market. So we&#8217;re going to be announcing very shortly a major tariff on pharmaceuticals,&#8221; Trump added.



The President, however, did not divulge any specifics regarding the tariff increase or its potential impact.



Pharmaceutical stocks across the globe, including GlaxoSmithKline, Sanofi and India&#8217;s Teva Pharmaceuticals, tumbled on Wednesday.



In the U.S. pharmaceutical stocks, Pfizer (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PFE#NYSE">PFE</a>) declined 3.5%, while Eli Lilly And Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LLY#NYSE">LLY</a>) lost 3.2%. AstraZeneca Plc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AZN#NASDAQ">AZN</a>) fell 1.35%, while Amgen Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMGN#NASDAQ">AMGN</a>) and Merck &amp; Co. Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MRK#NYSE">MRK</a>) dropped 2.94% and 2.75%, respectively, during the Wednesday pre-market trading session.



SEE ALSO:&nbsp;<a href="https://benzinga.com/markets/25/04/44706492/trump-predicts-tremendous-thundering-landslide-in-2026-midterms-says-tariffs-will-help-republicans-win-bi" target="_blank" rel="noreferrer noopener">Trump Predicts &#8216;Tremendous, Thundering Landslide&#8217; In 2026 Midterms, Says Tariffs Will Help Republicans Win Big</a>



Why It Matters: The $1.7 trillion revenue prescription drug industry has demonstrated a strong resilience to tariffs. The U.S., being the largest and most profitable market globally for prescription drugs and generic products, imports most of these from overseas. In 2024, drug imports reached $213 billion, more than two and a half times the total 10 years earlier. The proposed tariff could, in theory, help bring business back onshore.



However, companies like&nbsp;AstraZeneca Plc and&nbsp;Pfizer&nbsp;have extensive global manufacturing networks, including Ireland, Germany, Canada, the UK, and the U.S and are not restricted to India and China. Sources told Reuters that it could take up to 10 years to build and equip a factory in the U.S., due to stringent regulatory requirements from the U.S. Food and Drug Administration (FDA). Therefore, Trump&#8217;s tariff might necessitate drugmakers to overhaul a complex, expensive manufacturing system.



Meanwhile, after Trump indicated major tariffs on pharmaceuticals, EU drugmakers have urged European Commission President Ursula von der Leyen to take "rapid and radical action" to address the growing "risk of an exodus" to the U.S., following a meeting in Brussels.



<ul>
<li>READ MORE: <a href="https://benzinga.com/25/04/44705972/ford-motor-general-motors-to-witness-higher-demand-as-american-automotives-reap-the-fruit-of-protectionism-says-e" target="_blank" rel="noreferrer noopener">Ford, GM To Witness &#8216;Higher Demand&#8217; As American Carmakers Set To &#8216;Reap The Fruit Of Protectionism,&#8217; Says Expert: Here&#8217;s A List Of Potential Gainers And Losers From Trump Tariffs</a></li>
</ul>



Image via Shutterstock



Disclaimer:&nbsp;This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

AMGN

Trump Hints At 'Major Tariff' On Imported Pharmaceuticals: Pfizer, Eli Lilly, Amgen And Other Stocks Tumble In Wednesday Pre-Market

Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>) investors have &#8220;slid into panic mode&#8221; with shares dropping 23% since Apr. 2, according to Deepwater Asset Management Managing Partner Gene Munster, who warns the situation could deteriorate further amid escalating U.S.-China tensions.



What Happened: &#8220;It&#8217;s going to get ugly with China over the next month, which will intensify the panic,&#8221; Munster wrote Tuesday on X, addressing Apple&#8217;s dramatic selloff as the White House confirmed President Donald Trump&#8216;s 104% retaliatory tariff on Chinese <a href="https://www.benzinga.com/markets/equities/25/04/44704005/trumps-104-tariff-on-chinese-imports-sends-stock-futures-plunging-dow-falls-over-500-points">imports would take effect Wednesday</a>.



Apple shares fell 4.98% to $172.42 on Tuesday as markets reversed earlier gains following the tariff announcement, with investors concerned about potential supply chain disruptions and weakened sales in China.



Despite near-term challenges, Munster remains optimistic about Apple's long-term outlook. He believes that over the next three months, Apple will be &#8220;largely spared&#8221; from the impact of tariffs due to CEO Tim Cook's &#8220;favorable&#8221; relationships with both Trump and Chinese President Xi Jinping.



Munster also suggests that current recession fears are &#8220;already priced in.&#8221;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">Over the past five trading days <a href="https://twitter.com/search?q=%24AAPL&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$AAPL</a> investors have slid into panic mode. Shares are down 23% since April 2. • It&#39;s going to get ugly with China over the next month, which will intensify the panic. • My eyes are on the horizon. Looking out 3 months from now, I believe Apple…&mdash; Gene Munster (@munster_gene) <a href="https://twitter.com/munster_gene/status/1909707386706710929?ref_src=twsrc%5Etfw">April 8, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



See Also: <a href="https://www.benzinga.com/markets/equities/25/04/44704930/trump-says-he-warned-tsmc-of-100-tariff-if-it-doesnt-manufacture-in-us-these-chip-companies-are-loaded">Trump Threatened TSMC He&#8217;d Impose Up To 100% Tariffs If It Didn&#8217;t Manufacture Chips In US: &#8216;These Chip Companies Are Loaded&#8217;</a>



Why It Matters: The tariffs have reportedly driven <a href="https://in.benzinga.com/media/25/04/44679666/apple-customers-flock-to-stores-as-tariffs-threaten-to-drive-iphone-prices-up-by-45-report">U.S. consumers to Apple stores seeking to purchase iPhones</a> before potential price increases. According to TechInsights, manufacturing costs could rise by more than 45%, potentially increasing iPhone prices from $580 to $850 per unit.



Bank of America analyst Wamsi Mohan sees Apple&#8217;s valuation <a href="https://in.benzinga.com/analyst-ratings/analyst-color/25/04/44696168/apple-is-a-buying-opportunity-again-as-key-valuation-level-flashes-green-bank-of-america-says">compression as a buying opportunity</a>, noting the company&#8217;s forward price-to-earnings ratio of about 21 times has historically signaled strong future returns, averaging 17% gains one year after similar drops.



&#8220;This storm will pass,&#8221; Munster said. &#8220;Apple&#8217;s brand loyalty remains strong—and will drive an Apple Intelligence upgrade cycle in FY26.&#8221;



Apple performs well on momentum and quality metrics but lags in short- to long-term price trends, according to data from Benzinga Edge Stock Rankings. <a href="https://www.benzinga.com/premium/ideas/benzinga-edge-2#:~:text=Turn%20Market%20Chaos,when%20markets%20rebound">Sign up to learn more</a>.



Read Next:



<ul>
<li><a href="https://www.benzinga.com/personal-finance/25/04/44703064/shaq-says-billionaire-magic-johnson-gave-him-the-best-money-advice-being-famous-is-cool-but-at-some-point-you-want-to-start-owning-things" target="_blank" rel="noreferrer noopener">Shaq Says Billionaire Magic Johnson Gave Him the ‘Best' Money Advice — Being Famous Is Cool, ‘But at Some Point, You Want to Start Owning Things'</a></li>
</ul>



Image via Shutterstock



Disclaimer:&nbsp;This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Global

Tech

Apple Stock Nosediving Since 'Liberation Day' Tariffs Has Created Panic, Says Gene Munster: Predicts Tim Cook's 'Favorable' Relationship With Trump, Xi Jinping Will Rescue iPhone-Maker

As Washington doubles down on its trade war with China, and tariffs <a href="https://benzinga.com/markets/equities/25/04/44704005/trumps-104-tariff-on-chinese-imports-sends-stock-futures-plunging-dow-falls-over-500-points">now going as high as 104%</a>, some leading experts believe that the Middle Kingdom might have an ace up its sleeve, that could hit the United States where it hurts most—Services.



A vast majority of U.S. imports from China are tangible goods, whereas its exports to the country largely comprise services, and this includes tech solutions, consulting services, law firms, and even Hollywood movies, among others. China, in fact, runs a $32 billion deficit with the U.S. on services.



What Happened: Two widely followed bloggers in China with connections within the Chinese Communist Party have released a seemingly identical list of measures that the country is planning in retaliation against the tariffs imposed by the Trump Administration, <a href="https://www.bloomberg.com/news/articles/2025-04-08/influential-china-bloggers-post-options-to-hit-back-at-trump">reported</a> Bloomberg.



Among the list of measures shared by Ren Yi, the grandson of a former Guangdong province Communist Party chief, and Liu Hong, a senior journalist at Xinhua, the state-run news agency, includes a plan to &#8220;reduce or ban the import of U.S.-made films.&#8221;



See More: <a href="https://www.benzinga.com/news/global/25/04/44705797/high-stakes-high-yields-investors-puzzled-with-us-treasuries-defiant-run-amid-market-turmoil">US Treasuries Defiant Run Amid Trump Tariff Turmoil Puzzles Investors— Hedge Funds Selling Or China Dumping?</a>



Besides this, China plans to target the U.S. services sector in several other ways, such as restricting American companies from taking part in Chinese government procurement processes and limiting the cooperation between Chinese companies and U.S. law firms and consultancies.



Why It Matters: In China&#8217;s $17.7 billion box office, Hollywood movies managed to gross a little under $600 million in 2024, while the total U.S. and Canadian box office numbers during the same period stood at $8.6 billion. So, the move is expected to have a sizable impact on the industry.



Stocks like Walt Disney Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIS#NYSE">DIS</a>) will be in focus considering its globalized IP, with <a href="https://www.matthewball.co/all/china-marvel-and-the-uncertain-future-of-the-global-franchise">several multi-million dollar hits</a> over the years. It also has a sizable merchandising and theme park business in China, which will be impacted. Warner Bros Discovery Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/WBD#NASDAQ">WBD</a>) is next in line, with several international licensing deals in the country that could be cut short.



However, the hardest hit could be IMAX Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IMAX#NYSE">IMAX</a>), which derives 23% of its revenue from China, where 45% of all <a href="https://thebambooworks.com/imax-china-roars-into-year-of-the-snake-after-weak-performance-in-2024/">IMAX screens</a> are located.



Several other companies provide software, consulting, and related services in the Mainland, such as Salesforce Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CRM#NYSE">CRM</a>) partnering with Alibaba Group Holding Ltd. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BABA#NYSE">BABA</a>) to <a href="https://www.theregister.com/2023/11/06/asia_in_brief/">offer services</a> in the country, however, given the opaqueness of the nation&#8217;s financial markets, and the kind of barriers imposed, there isn&#8217;t a lot of clarity on the kind of impact a tariff on services would have. 



Read More: <a href="https://www.benzinga.com/news/global/25/04/44706519/apple-stock-nosediving-since-liberation-day-tariffs-has-created-panic-says-gene-munster-predicts-tim-cooks-favorable-relationship-with-trump-xi-jinping-will-rescue-iphone-maker">Apple Stock Nosediving Since &#8216;Liberation Day&#8217; Tariffs Created Panic, Says Gene Munster: Predicts Tim Cook&#8217;s &#8216;Favorable&#8217; Relationship With Trump, Xi Jinping Will Rescue iPhone-Maker</a>



Photo: Shutterstock

General

BABA

IMAX

China May Hit US Where It Hurts Amid Trump's Tariff War — Services Trade In Crosshairs, With Walt Disney, IMAX And Warner Bros. Discovery In Focus

On Tuesday, April 8th, U.S. markets closed sharply lower as the S&amp;P 500 plunged below 5,000 for the first time in nearly a year, capping a four-day loss of $5.83 trillion—the steepest since the index&#8217;s inception in the 1950s. Early gains evaporated as hopes for delayed U.S. tariffs faded, and looming 104% duties on Chinese goods fueled mounting fears of a global economic downturn.



In economic data, the NFIB Small Business Optimism Index fell by 3.3 points to 97.4 in March, marking its lowest level since October 2024 and missing expectations of 101.3.



All sectors within the S&amp;P 500 ended Tuesday in the red, with consumer discretionary, materials, and energy stocks leading the day&#8217;s declines.



The Dow Jones Industrial Average declined 0.84% to 37,645.59, the S&amp;P 500 dropped 1.57% to 4,982.77, and the Nasdaq Composite fell 2.15% to close at 15,267.91.



Asia Markets Today



<ul>
<li>On Wednesday, Japan&#8217;s Nikkei 225 closed 3.78% lower at 31,764.00, led by losses in the Paper &amp; Pulp, Transport, and Communication sectors amid trade war fears, tech stock losses, a rising yen, and widespread panic selling. Nearly 90% of stocks declined as investors grappled with sharp volatility and deepening global economic uncertainty.</li>



<li>Australia&#8217;s S&amp;P/ASX 200 was down 1.80% and closed at 7,375.00, led by losses in the Energy, Metals &amp; Mining and Resources sectors.</li>



<li>India&#8217;s Nifty 50 was down 0.59% to 22,402.45, and Nifty 500 slid 0.57% to 20,363.10.</li>



<li>The RBI cut interest rates by 25 basis points to 6% and shifted to an &#8220;accommodative&#8221; stance, citing easing inflation and slowing growth. GDP forecast was lowered amid global trade tensions.</li>



<li>China&#8217;s Shanghai Composite rose 1.31% to 3,186.81, and Shanghai Shenzhen CSI 300 increased 0.99% to 3,686.79.</li>



<li>Hong Kong&#8217;s Hang Seng Index gained 0.68% to 20,264.49.</li>
</ul>



Eurozone at 05:45 AM ET



<ul>
<li>The European STOXX 50 was down 2.77%.</li>



<li>Germany&#8217;s DAX declined 2.85%.</li>



<li>France&#8217;s CAC 40 fell 2.77%.</li>



<li>U.K.&#8217;s FTSE 100 index traded lower by 2.50%.</li>



<li>European shares fell sharply on Wednesday as steep U.S. tariffs reignited trade war concerns, dragging markets lower and pushing the STOXX 600 closer to bear territory. Rate-sensitive banks, pharmaceutical giants, energy and mining stocks led the decline.</li>
</ul>



Commodities at 05:45 AM ET



<ul>
<li>Crude Oil WTI was trading lower by 3.89% at $57.25/bbl, and Brent was down 3.82% at $60.42/bbl.</li>



<li>Oil prices fell to a multi-year low Wednesday, marking their worst five-day losing streak in years. Global recession fears deepened amid escalating U.S.-China trade tensions and rising supply outlooks.</li>



<li>Natural Gas rose 0.55% to $3.482.</li>



<li>Gold was trading higher by 2.44% at $3,062.64, Silver was up 2.12% to $30.320, and Copper rose 2.21% to $4.2355.</li>
</ul>



U.S. Futures at 05:45 AM ET



Dow futures were down 0.40%, S&amp;P 500 futures declined 0.22%, and Nasdaq 100 futures rose 0.21%.



Forex at 05:45 AM ET



<ul>
<li>The U.S. Dollar Index declined 0.64% to 102.31, USD/JPY was down 0.70% to 145.23, and USD/AUD declined 0.95% to 1.6626.</li>



<li>The U.S. dollar slumped after President Trump&#8217;s steep tariff hike on China intensified recession fears. Markets now expect deeper Federal Reserve rate cuts, pressuring the greenback. The Dollar Index fell to levels not seen since September 2024, while safe-haven currencies like the yen and euro strengthened.</li>
</ul>



Photo via Shutterstock

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USDU

China Markets Up, Europe Tumbles As Trade War Escalates; Oil Hits Multi-Year Low - Global Markets Today While US Slept

Following a jump in the U.S. Treasury yields, the Secured Overnight Financing Rate (SOFR) swap spreads have widened, signaling a &#8220;serious liquidity&#8221; issue, according to Ark Invest&#8217;s Cathie Wood. Experts believe that only the government and the Federal Reserve&#8217;s intervention would be able to contain this crisis.



What Happened: SOFR is a benchmark interest rate that reflects the cost of borrowing cash overnight, and it is used as a reference rate for various financial transactions.



On the other hand, the SOFR swap spread is the difference between the fixed rate in a SOFR-based interest rate swap and the yield on a government bond of the same maturity.



This surge in SOFR swap spread is a result of the dramatic rise in the 10-year Treasury bond yields, which are up from a recent low of 3.87% on April 4, which was two days after the &#8220;Liberation Day,&#8221; to 4.44% at the time of writing.



According to Wood, a widening negative SOFR swap spread is sending a distress signal pointing to a potential crisis of liquidity in U.S. banks.



She argues that this crisis necessitates a geopolitical solution through a trade agreement, which she terms the &#8220;Mar-a-Lago Accord,&#8221; and a monetary policy solution through aggressive intervention by the Federal Reserve.



She further underscores the severity of the situation by adding that there is &#8220;No more time to waste&#8221;.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">As Zerohedge notes, this swap spread is suggesting serious liquidity issues in the US banking system. This crisis is calling out for some kind of Mar-a-Lago Accord on free trade, in tandem with serious support from the Fed? No more time to waste. <a href="https://t.co/5VXYqLJemJ">https://t.co/5VXYqLJemJ</a>&mdash; Cathie Wood (@CathieDWood) <a href="https://twitter.com/CathieDWood/status/1909816910033678801?ref_src=twsrc%5Etfw">April 9, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Adding to this, Joseph Wang, the CIO at Monetary Macro said in an X post, &#8220;If the White House wants lower 10 year yields they need to speed up banking regulation reforms.&#8221;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">Big tightening in SOFR swap spreads. If the White House wants lower 10 year yields they need to speed up banking regulation reforms. <a href="https://t.co/19PlN9cI4a">pic.twitter.com/19PlN9cI4a</a>&mdash; Joseph Wang (@FedGuy12) <a href="https://twitter.com/FedGuy12/status/1909686590668259624?ref_src=twsrc%5Etfw">April 8, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



See Also: Bear <a href="https://www.benzinga.com/25/04/44683084/bear-markets-hit-harder-and-last-longer-during-recessions-heres-a-historical-look-at-bear-market-severity-and-duration">Markets Hit Harder And Last Longer During Recessions, Says Strategist</a>



Why It Matters: The surge in yields suggests that bond prices are falling amid an ongoing market correction. Simplistically, this indicates that investors, who traditionally prefer investing in bonds during a stock market crash, are liquidating their positions. However, there is more at play here.



After President Donald Trump levied 104% tariff duties on China after the latter&#8217;s retaliation, Ed Yardeni of Yardeni Research suggests that &#8220;Fixed-income investors may be starting to worry that the Chinese and other foreigners might start selling their U.S. Treasuries.&#8221;



Moreover, the credit markets are also starting to show signs of stress as the yield spread between the high-yield corporate bond composite and the 10-year Treasury bond is widening rapidly.



According to the data shared by Yardeni, the high-yield corporate spread stood at 407 basis points as of April 7, indicating reduced investor confidence, economic slowdown, or recession fears.



Consequently, ETFs that invest in high-yield corporate bonds and in senior bank loans are starting to plunge.



The iShares iBoxx $ High Yield Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HYG#NYSE">HYG</a>) and Invesco Senior Loan ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BKLN#NYSE">BKLN</a>) are down 3.64% and 2.75%, respectively, over the last five days.



&#8220;The good news is that the Fed Put will probably make a quick comeback if this happens,&#8221; said Yardeni.



Additionally, highlighting his concerns about rising yields, economist Peter Schiff said, &#8220;Without an emergency rate cut tomorrow morning and the announcement of a massive QE program, tomorrow could be a 1987-style stock market crash.&#8221;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">As I warned earlier, the Treasury market is crashing. The yield on the 10-year just hit 4.5%, and the yield on the 30-year just hit 5%. Without an emergency rate cut tomorrow morning and the announcement of a massive QE program, tomorrow could be a 1987-style stock market crash.&mdash; Peter Schiff (@PeterSchiff) <a href="https://twitter.com/PeterSchiff/status/1909822222534955101?ref_src=twsrc%5Etfw">April 9, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Price Action: As of Tuesday&#8217;s close, the Nasdaq 100 index was in bear market territory, down 23.10% from its previous record of 22,222.61 points. S&amp;P 500 was 18.95% lower from its latest Feb. 19 high of 6,147.43 points. Whereas, Dow Jones was 16.48% lower than its 52-week high of 45,073.63 points. 



The yield on the two-year Treasury stood at 3.77%, and the long-term 30-year bond yielded 4.92%. The SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) and Invesco QQQ Trust ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), which track the S&amp;P 500 index and Nasdaq 100 index, respectively, declined on Tuesday.



The SPY was down 1.57% to $496.48, while the QQQ advanced 1.80% to $416.06, according to <a href="https://pro.benzinga.com/dashboard">Benzinga Pro</a> data.



On Wednesday, the future of Dow was lower by 2.32%, the S&amp;P 500 future declined 2.58%, and the Nasdaq 100 was down 2.63%.



Read Next:



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<li><a href="https://www.benzinga.com/25/04/44679385/market-enters-risk-off-mode-as-analyst-predicts-this-signal-flashing-warnings-similar-to-2020-and-2008-crisis">Market Enters &#8216;Risk-Off&#8217; Mode As Analyst Predicts This Signal Flashing Warnings Similar To 2020, 2008 Crisis</a></li>
</ul>



Photo courtesy: Shutterstock

Sector ETFs

Bonds

BKLN

Cathie Wood Points To 'Serious Liquidity Issues' As Overnight Borrowing Rate Spreads Widen On Spiking Treasury Yields: 'This Crisis Is Calling Out For Some Kind Of Mar-a-Lago Accord'

President Donald Trump on Tuesday unveiled sweeping plans to revive U.S. coal production to meet the nation's rising energy demands, marking a dramatic policy reversal from the climate-focused agendas of the Biden <a href="https://www.benzinga.com/topic/donald-trump">and Obama administrations.</a>



Meanwhile, Wall Street plunged deeper into negative territory as escalating tariff tensions with China reignited fears of a global economic slowdown.



"We're ending Joe Biden's war on beautiful clean coal once and for all," Trump declared. "We're going to reopen those plants, put miners back to work, and get approvals very fast."



Trump's order directs federal agencies to fast-track mining permits, slash environmental regulations, and expand coal leases on federal lands.



"Pound for pound, coal is the single most reliable, durable, secure, and powerful form of energy on Earth," the president added.



According to the U.S. Energy Information Administration, coal production in 2023 totaled 578 million short tons, less than half the 1.17 billion short tons produced at its peak in 2008. 



The decline, the EIA noted, has been driven by rising costs, tougher environmental rules, and increased competition from natural gas and renewables.



&#8220;We&#8217;ll be signing a bill to unleash the might of our beautiful clean coal industry in this country,&#8221; Trump said.



Shares of Peabody Energy Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BTU#NYSE">BTU</a>), the largest private-sector coal company in the world, rose 9% in after-hours trading, and Warrior Met Coal Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HCC#NYSE">HCC</a>) rose 6.5%.



<h3 class="wp-block-heading">Wall Street Selloff Deepened</h3>



While Trump was touting coal's comeback, Wall Street was in full-blown retreat. 



Major indexes erased hefty morning gains in a volatile session that saw risk sentiment collapse after White House Press Secretary Karoline Leavitt confirmed Trump's 104% retaliatory tariff on Chinese imports would go live at 12:01 a.m. ET Wednesday.



"China made a mistake by retaliating, and the president is punching back harder," Leavitt said, ruling out any delay or exemption to the tariffs.



The news sent a jolt through financial markets, reversing a sharp morning rally and pushing the S&amp;P 500 index to its lowest levels in a year.



The S&amp;P 500 closed at 4,892, down 1.57%, after having surged as much as 3.7% earlier in the session.



The Nasdaq 100 ended the day at 17,104, falling 1.95% from the previous close, despite hitting a 4.1% intraday gain during the morning rally.



The Dow Jones Industrial Average finished at 37,663, shedding 0.8%, after climbing as much as 2.5% at its session peak.



<h3 class="wp-block-heading">Mega-Cap Tech: From Rally To Rout</h3>



Among the Magnificent Seven, losses were led by Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), which closed down 5%, falling more than 9 percentage points from its intraday highs. 



Tesla Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>) ended 4.9% lower, while Amazon.com Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>) dropped 2.9%. 



The iShares Semiconductor ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SOXX#NASDAQ">SOXX</a>), which had surged more than 3% in morning trading, ended lower by 4%, signaling broad risk aversion toward chipmakers. AI darling Nvidia Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) closed 1.4% lower.



Read Next: 



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<li><a href="https://www.benzinga.com/economics/macro-economic-events/25/04/44699965/biggest-tax-hike-since-1982-trumps-tariff-strategy-faces-harsh-economic-forecast">Biggest Tax Hike Since 1982? Trump&#8217;s Tariff Strategy Faces Harsh Economic Forecast</a></li>
</ul>



Photo: Shutterstock

Macro Economic Events

SOXX

Trump Unleashes 'Beautiful Clean Coal' Policies As Wall Street Tanks, S&P 500 Hits 1-Year Low

Despite mounting political and <a href="https://www.benzinga.com/economics/macro-economic-events/25/04/44699965/biggest-tax-hike-since-1982-trumps-tariff-strategy-faces-harsh-economic-forecast">economic strain</a> between the U.S. and China, many American companies remain reluctant to scale back their operations in the world's second-largest economy.



What To Know: According to a new report commissioned by the U.S. Chamber of Commerce Foundation and <a href="https://www.wsj.com/world/china/many-u-s-companies-plan-to-keep-china-ties-survey-finds-906481c9">cited</a> by The Wall Street Journal, a majority of surveyed firms still see strategic value in maintaining or expanding their presence in China — even as they increasingly view it as their biggest geopolitical risk.



The report, based on surveys and interviews with nearly 200 businesses, highlights a disconnect between Washington's push for "selective decoupling" and corporate America's entrenched reliance on China's manufacturing capacity, skilled labor, and vast consumer market.



Read Also: <a href="https://www.benzinga.com/news/25/04/44699850/why-ishares-china-large-cap-etf-fxi-is-falling">Why iShares China Large-Cap ETF (FXI) Is Falling</a>



Per the WSJ, roughly 70% of participating U.S. Chamber members indicated plans to maintain or grow Chinese engagement, despite concerns over Beijing's tightening regulatory environment and the rising specter of conflict across the Taiwan Strait.



What Else: Those long-term worries came into sharper focus Tuesday after White House Press Secretary Karoline Leavitt confirmed that President Donald Trump's <a href="https://www.benzinga.com/economics/macro-economic-events/25/04/44698697/markets-reverse-gains-as-trumps-104-china-tariff-announcement-rattles-wall-street">104% tariff on Chinese imports</a> will take effect at 12:01 a.m. ET on Wednesday. "It was a mistake for China to retaliate," Leavitt said, reiterating the administration's hardline stance.



Financial markets quickly reversed early gains, with the SPDR S&amp;P 500 ETF Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NASDAQ">SPY</a>) closing down 1.7% and the SPDR Dow Jones Industrial Average ETF Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NASDAQ">DIA</a>) sliding 1.2% on Tuesday.



The tariff announcement dampened hopes of near-term trade resolution and heightened fears of broader economic fallout, <a href="https://www.benzinga.com/economics/macro-economic-events/25/04/44698697/markets-reverse-gains-as-trumps-104-china-tariff-announcement-rattles-wall-street">echoing concerns</a> raised earlier Tuesday by Chicago Fed President Austan Goolsbee regarding potential growth slowdowns linked to trade policy.



Read Also: 



<ul>
<li><a href="https://www.benzinga.com/economics/macro-economic-events/25/04/44699965/biggest-tax-hike-since-1982-trumps-tariff-strategy-faces-harsh-economic-forecast">Biggest Tax Hike Since 1982? Trump&#8217;s Tariff Strategy Faces Harsh Economic Forecast</a></li>
</ul>



Photo: Shutterstock

US Companies Stick With China As Trump Tariffs Set To Take Effect: Report

BofA Securities analysts Bryan D. Spillane, Lisa K. Lewandowski and Peter T. Galbo have put forward on Tuesday their research findings on consumer staple companies in the face of a potential recession.



The analysts said consumer staples have historically outperformed the S&amp;P 500 in most recent recessions, suggesting a defensive edge.



However, the analysts warned that current conditions, such as lingering high prices and weak volume growth, may limit their resilience in a future downturn.



Also Read: <a target="_blank" href="https://www.benzinga.com/tech/25/04/44695622/amazon-touts-ai-milestone-says-new-model-outshines-gpt-4o-in-real-time-speech" rel="noreferrer noopener">Amazon Touts AI Milestone, Says New Model Outshines GPT-4o In Real-Time Speech</a>



Still, their limited exposure to new tariffs could make the sector more appealing than others, potentially helping sustain valuation multiples.



During recessions, the Consumer Staples sector stock prices are primarily influenced by earnings per share (EPS) rather than sales growth.



Analysis shows that forward EPS estimates account for over 90% of stock price movement across key subsectors like Beverages, Household &amp; Personal Care (HPC), Packaged Food, and Tobacco, with the correlation being the tightest Beverages and HPC.



The analysts noted that this highlights the critical importance of earnings strength when evaluating stock performance in uncertain economic conditions.



A review of six past recessions reveals that certain Consumer Staples stocks consistently outperformed the S&amp;P 500.



Campbell Soup Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CPB#NYSE">CPB</a>), Colgate-Palmolive Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CL#NYSE">CL</a>), General Mills Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GIS#NYSE">GIS</a>), McCormick &amp; Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MKC#NYSE">MKC</a>), PepsiCo Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PEP#NASDAQ">PEP</a>), and Hormel Foods Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HRL#NYSE">HRL</a>) each posted a 100% success rate in outperforming the index during those downturns.



In the last four recessions with the most comprehensive data, McCormick, General Mills, and Church &amp; Dwight Co. Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CHD#NYSE">CHD</a>) delivered the strongest relative performance.



Top-performing Consumer Staples stocks in a potential downturn will likely share three traits: profit flexibility to offset revenue pressure and rising costs, strong U.S. manufacturing presence to limit tariff-related inflation, and solid balance sheets capable of sustaining share buybacks to boost earnings per share.



Analysts see McCormick, Coca-Cola Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KO#NYSE">KO</a>) and Philip Morris International Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PM#NYSE">PM</a>) as well-defended, with Keurig Dr Pepper Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/KDP#NASDAQ">KDP</a>), Molson Coors Beverage Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TAP#NYSE">TAP</a>) and Altria Group Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MO#NYSE">MO</a>) in the next tier of potential outperformers.



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</ul>



Image via Shutterstock

This Beverage Maker, Tobacco Company And Packaged Food Giant Outshine In A Recession

As President Donald Trump initiated a tariff plan that many <a href="https://www.benzinga.com/25/04/44665530/jamie-dimon-once-a-tariff-supporter-warns-trumps-new-policy-could-slow-us-growth-fuel-inflation-the-quicker-the-issue-is-resolved-the-better">critics label stagflationary</a>, key figures in the Federal Reserve, including Mary Daly, president of the Federal Reserve Bank of San Francisco, signaled that the central bank might <a href="https://www.benzinga.com/economics/macro-economic-events/25/04/44667104/speculators-raise-wagers-on-fed-emergency-rate-cuts-as-theories-of-self-induced-crash-gather-pace">delay further rate cuts</a>.



Daly, speaking at a moderated discussion at Brigham Young University on Tuesday, said she is comfortable with current interest rate levels, <a href="https://www.bloomberg.com/news/articles/2025-04-08/fed-s-daly-says-policy-is-in-good-place-amid-trade-uncertainty">reported </a>Bloomberg.



"We cut the interest rate by 100 basis points last year. That puts policy in a good place to stay modestly restrictive — keep inflation coming down — but not so restrictive that the economy is vulnerable," Daly told attendees.



Daly participates in the rate-setting Federal Open Market Committee as a rotating voting member. The Missouri native served on the committee in 2024 and is not currently a sitting member.



Daly said she thinks the committee should be careful when deviating from its current path.



"So, with growth good and policy in a good place, we've built the time and the ability to just tread slowly and tread carefully," she said.



Meanwhile, Fed Chair Jerome Powell has rebuked Trump&#8217;s overtures to policymakers to cut rates. Speaking at the Society for Advancing Business Editing and Writing conference on April 4, Powell said it&#8217;s &#8220;too soon&#8221; to assess a change in policy given the tariffs&#8217; impact on inflation.



According to the Federal Reserve Bank of St. Louis, the federal funds rate is currently 4.33%, lower than the 2024 peak of 5.33% but substantially higher than the low interest rate environment observed in the 2010s.



Also Read:



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<li><a href="https://www.benzinga.com/economics/macro-economic-events/25/04/44698697/markets-reverse-gains-as-trumps-104-china-tariff-announcement-rattles-wall-street">Markets Reverse Gains As Trump&#8217;s 104% China Tariff Announcement Rattles Wall Street</a></li>
</ul>



Photo: Shutterstock

San Francisco Fed's Mary Daly Says Central Bank Should 'Tread Slowly And Tread Carefully'

Wall Street's early rally lost steam and flipped into negative territory Tuesday afternoon after White House Press Secretary Karoline Leavitt confirmed that President Donald Trump's retaliatory 104% tariff on Chinese imports would take <a href="https://www.benzinga.com/topic/donald-trump">effect at 12:01 a.m. ET Wednesday. </a>



Her remarks triggered a sharp deterioration in market sentiment and reignited fears of a global trade escalation.



By 2:15 p.m. ET, the S&amp;P 500 – as tracked by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) – had slipped 0.3%, the Russell 2000 fell 1.3%, and the Nasdaq 100 was barely positive, up just 0.1%. The Dow Jones Industrial Average held onto a 0.3% gain, though upside momentum was fading fast.



<h3 class="wp-block-heading">What Triggered The Market Turnaround?</h3>



Leavitt&#8217;s remarks delivered clarity — and a hard deadline — for Trump&#8217;s escalating tariff campaign.



"There will be 104% tariffs going into effect on China tonight at midnight," Leavitt said. 



"It was a mistake for China to retaliate, and the president is punching back harder."



The press secretary echoed Trump&#8217;s hardline stance, stating that "America does not need other countries as much as other countries need us," and emphasized that the president believes China wants to make a deal, but doesn't know how to start.



While earlier this week Trump hinted at openness to negotiations, Tuesday's update suggested no de-escalation in sight.



Leavitt insisted that tariffs are not up for delay or exemption, rejecting suggestions that market turmoil had prompted a policy shift. 



She confirmed that the administration expects these trade deals and tariffs to generate "trillions of dollars in revenue" while incentivizing onshoring and closing U.S. trade deficits.



Earlier on Tuesday, Chicago Fed President Austan Goolsbee warned that the economic consequences of tariffs may already be materializing.



"We can't wait until the end of the quarter plus one month to find out that investment has dropped off and GDP growth is shrinking," Goolsbee said, calling for timelier insight into the drag from protectionist policy.



<h3 class="wp-block-heading">Tech Stocks Lose Steam, Semis Cool Off</h3>



After leading the rally earlier in the session, tech stocks began to falter. 



Among the Magnificent Seven, Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>) turned sharply lower, down 2.33%, while Tesla Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>) shed 0.85% and Amazon.com Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>) slipped 0.32%.



Only Nvidia Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) continued to hold onto gains, up 2.43%.



Semiconductor stocks, which had gained over 3.3% by midday, then flipped to losses, with the iShares Semiconductor ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SOXX#NASDAQ">SOXX</a>) down 0.4%.



Defensive sectors such as utilities and communications hovered near flat, while materials and consumer discretionary posted the steepest losses amid fears of disrupted global supply chains.



Read now: 



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<li><a href="https://www.benzinga.com/government/regulations/25/04/44674785/trump-vows-to-reset-global-trade-warns-iran-faces-great-danger-if-talks-fail">Trump Vows To &#8216;Reset&#8217; Global Trade, Warns Iran Faces &#8216;Great Danger&#8217; If Talks Fail</a></li>
</ul>



Photo: Shutterstock

Large Cap

Markets Reverse Gains As Trump's 104% China Tariff Announcement Rattles Wall Street

A bold bet on tariffs as a self-funded strategy for future tax cuts could backfire, as President Donald Trump's sweeping import duties promise massive tax revenues, but at the cost of slower growth <a href="https://www.benzinga.com/news/econ-s">and higher consumer pain.</a>



In a recent report, the <a href="https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/">Tax Foundation</a> analyzed the economic fallout of Trump's tariff plan announced on April 2, estimating it would trigger the biggest tax increase since 1982 and shrink gross domestic product by 0.7% over the next decade, even before accounting for foreign retaliation.



<h3 class="wp-block-heading">What's The Economic Impact Of Trump's New Tariff Push?</h3>



The new tariff proposal would raise the average tariff rate on all imports from 2.5% to 16.5% by 2025, a level unseen since the Great Depression era in 1937. 



According to the Tax Foundation, the plan comprises a universal tariff policy and prior tariff escalations, together projected to generate $2.9 trillion in federal revenue over 10 years.



"The 2025 Trump tariffs are larger than the tax increases enacted under Presidents George H.W. Bush, Bill Clinton, and Barack Obama,&#8221; the report stated.



<h3 class="wp-block-heading">A Steep Cost For US Households</h3>



What boosts the Treasury's balance sheet drains the wallets of American families. Tariffs are essentially taxes on imports, and those costs typically fall on U.S. consumers and businesses. 



The think tank estimates the average U.S. household would pay over $1,900 more in 2025, with after-tax income declining by 1.9%.



"Tariffs raise prices and reduce available quantities of goods and services for U.S. businesses and consumers, resulting in lower income, reduced employment, and lower economic output," the report said.



Imports are also expected to plunge by more than $800 billion in 2025, a 25% drop, which could upend global supply chains and inflate prices of goods that rely on foreign components.



"Economists generally agree free trade increases the level of economic output and income," the report said. 



<h3 class="wp-block-heading">A Shrinking Incentive To Work And Invest</h3>



The economic damage extends beyond just higher consumer prices. One major effect comes from rising production costs. As tariffs raise the price of imported parts and raw materials, U.S. businesses pass those increases on to consumers. The resulting inflation erodes the real return on both labor and capital, ultimately discouraging work and investment.



"Because higher prices would reduce the return to labor and capital, they would incentivize Americans to work and invest less, leading to lower output," the Foundation said.



Another, more subtle risk lies in the currency market. A stronger U.S. dollar may offset some price inflation for American consumers, but it would also make U.S. exports less competitive globally. 



That, in turn, could reduce revenue for exporters, suppress job creation, and further dampen economic output.



Whether through rising prices or a stronger currency, the long-run effects from tariffs remain dire: lower growth, weaker income gains, and reduced economic dynamism.



Read Next: 



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<li><a href="https://www.benzinga.com/25/04/44698325/trump-tariff-strategy-self-inflicted-market-debacle-says-wedbush-analyst">Trump Tariff Strategy Creates &#8216;Self-Inflicted Market Debacle&#8217;: Analyst</a></li>
</ul>



Photo: Shutterstock

Biggest Tax Hike Since 1982? Trump's Tariff Strategy Faces Harsh Economic Forecast

On Friday, China&#8217;s finance ministry announced a 34%&nbsp;tariff on all goods imported&nbsp;from the U.S., effective April 10, in response to the U.S. administration&#8217;s 54% duties imposed by the Trump-led administration during the so-called <a target="_blank" href="https://www.benzinga.com/topic/tariffs" rel="noreferrer noopener">Liberation Day last week</a>.



Trump has&nbsp;threatened to impose an additional 50% duty&nbsp;on Chinese imports if Beijing does not <a target="_blank" href="https://www.benzinga.com/news/global/25/04/44679330/will-trump-impose-higher-tariffs-on-china-crypto-bettors-now-see-an-80-possibility" rel="noreferrer noopener">drop the 34% tariffs</a>.



On Monday, Trump hinted at more openness in trade negotiations with China after threatening to impose a 50% tariff on top of the 54% already levied.



&#8220;China also wants to make a deal badly, but they don&#8217;t know how to get it started,&#8221; <a target="_blank" href="https://www.benzinga.com/economics/macro-economic-events/25/04/44686417/wall-street-soars-as-trump-teases-trade-deals-magnificent-seven-add-over-500-billion-in-market-value" rel="noreferrer noopener">Trump wrote</a>.



Wedbush analyst Daniel Ives writes that &#8220;saying we can just make this in the USA&#8221; understates how complex the supply chain in Asia really is—and how electronics, chips, semiconductors, hardware, and smartphones have been built for U.S. consumers over the past 30 years.&#8221;



Also Read: <a target="_blank" href="https://www.benzinga.com/economics/macro-economic-events/25/04/44686417/wall-street-soars-as-trump-teases-trade-deals-magnificent-seven-add-over-500-billion-in-market-value" rel="noreferrer noopener">Wall Street Soars As Trump Teases Trade Deals, Magnificent 7 Add Over $500 Billion In Market Value</a>



&#8220;The reason I believe this is the biggest debacle ever seen in the markets is because its purely self-inflicted by Trump, and the logic about &#8220;near-term pain&#8221; is being way miscalculated, which speaks to our concern. It&#8217;s very easy to say &#8220;build in America&#8221; behind a microphone in the Beltway&#8230;the reality is so much different it&#8217;s almost a scary concept,&#8221; says Daniel Ives.



For U.S. tech/auto companies, tariffs are like flipping a boat with no life rafts.



The list of vulnerable companies is long and includes Apple Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), Nvidia Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>), Microsoft Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>), General Motors Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GM#NYSE">GM</a>), and Advanced Micro Devices, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMD#NASDAQ">AMD</a>), among others.



Building a factory in the U.S. takes four to five years. The analyst explains that high labor costs and other expenses in the U.S. don&#8217;t align with how modern supply chains are designed to operate. This makes it hard to compete with Chinese tech giants like BYD Co Ltd (OTC:<a class="ticker" href="https://www.benzinga.com/stock/BYDDF#OTC">BYDDF</a>) (OTC:<a class="ticker" href="https://www.benzinga.com/stock/BYDDY#OTC">BYDDY</a>), Huawei, Alibaba Group Holding Limited (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BABA#NYSE">BABA</a>), Tencent Holdings Ltd (OTC:<a class="ticker" href="https://www.benzinga.com/stock/TCEHY#OTC">TCEHY</a>) (OTC:<a class="ticker" href="https://www.benzinga.com/stock/TCTZF#OTC">TCTZF</a>)—and many others—a big opportunity to expand their global reach.



Also, much of the key technology and intellectual property behind these supply chains is already deeply rooted in Asia. So, any effort to shift production to the U.S. would take at least a decade to make a real impact, Wedbush analyst writes.



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