JPMorgan: The US in recession this year due to Trump’s tariffs
April 8, 2025
Linea Mercati Interview 4/8/25
April 9, 2025The New York Stock Exchange avoided a fall on Monday, closing in mixed order after a turbulent session. Losses were contained, but remained less severe than those seen in other financial markets, which were still reeling from the announcement of Donald Trump’s tariffs.
A collapse was ultimately avoided. The New York Stock Exchange limited its losses on Monday, April 7, ending in a mixed session. However, the decline was less pronounced than that of other stock markets, which were still reeling from the shock of Donald Trump’s tariffs.
The Dow Jones Industrial Average lost 0.91%, the Nasdaq index edged up 0.10%, and the broader S&P 500 index dropped 0.23%.
Swinging both up and down, the American stock market experienced an “extremely volatile” session, Peter Cardillo of Spartan Capital Securities told AFP.
Wall Street is navigating blindly, following the White House’s statements on tariffs, but remains undermined by “recession fears” linked to the Trump administration’s trade policy, writes Patrick O’Hare of Briefing.com in a note.
Donald Trump, who accuses his country’s economic partners of “plundering” him, imposed a universal 10% additional tax rate on all products imported into the United States, which came into effect on Saturday. This rate is set to be raised as of Wednesday for several dozen major trading partners, including the European Union (+20%) and Vietnam (+46%).
These measures, announced Wednesday evening, caused a wave of panic in the American market, which lost nearly 6% at the close on Friday and more than $6 trillion in market capitalization.
Wall Street was “hit hard” at the end of last week, “and now the rest of the world’s markets are joining us,” Cardillo explained. Asian and European markets were particularly hard hit on Monday, with Hong Kong plummeting more than 13% – its worst session since 1997, while the Paris Stock Exchange fell 4.78%, its worst session in three years.
Wall Street remains very “tight,” but would not need much time to turn around, as “there was a lot of selling in a very short period of time,” Art Hogan of B. Riley Wealth Management told AFP.
In a sign of investor nervousness, the Vix volatility index, nicknamed the “fear index,” has moved to levels it has not reached since the Covid-19 pandemic.
A Jump After a False Report
On Monday, stocks jumped for a few minutes around 2:10 PM GMT amid false press reports that the Trump administration might have considered pausing its tariffs. This information was immediately denied by the White House.
Donald Trump even threatened to significantly increase tariffs on Chinese products if Beijing maintains its response to its tariff offensive, while leaving the door open to negotiations with the other affected countries.
The bond market, for its part, tightened significantly, with the yield on 10-year US government bonds standing at 4.21%, compared to 3.99% at the close on Friday.
“The next major obstacle” will be the release of inflation data this week, Cardillo believes, including the release of the March US Consumer Price Index (CPI) on Thursday.
On Friday, investors will welcome producer prices (PPI).
Elsewhere, on the stock chart, the Nasdaq was supported by some of the tech giants, such as Nvidia (+0.68%), Apple (+0.46%), and Microsoft (+0.46%).
US Steel (USS) shares closed up 16.22% after President Donald Trump launched a new review on Monday of the proposed acquisition of US steelmaker US Steel by its Japanese competitor Nippon Steel, which his predecessor Joe Biden had blocked on national security grounds.
According to several media outlets, this revived hopes of a green light for the merger.
With the fall in Bitcoin, stocks associated with cryptocurrencies were also underperforming, such as the exchange Coinbase (-2.04%) and Strategy (-8.67%), formerly MicroStrategy, which owns the largest private Bitcoin reserve in the world.
