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Traders work on the floor of the New York Stock Exchange.Key Takeaways
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Stocks have swung wildly during President Trump's first 100 days, with the White House's unpredictable tariff policies leaving companies and investors unsure about the economic outlook.
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Treasury yields and the dollar have declined as recession risks have increased and global investors have soured on U.S. assets.
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Investors have flocked to gold, a traditional safe haven, amid the market turmoil; there is also evidence to suggest that some investors have taken refuge in bitcoin.
President Trump campaigned on shaking up the status quo. His first 100 days have delivered Wall Street a shake-up and then some.
Stocks have been on a wild ride since Trump’s inauguration. The S&P 500 endured one of its worst sell-offs in decades earlier this month after Trump unveiled his “Liberation Day” tariffs on April 2. A week later, when Trump announced a 90-day pause on most of those duties, stocks staged their biggest rally since 2008.
The Cboe Volatility Index (VIX), otherwise known as “the fear index,” closed at its highest level since March 2020 the day before the “Liberation Day” tariffs went into effect. The index has come down from its recent highs, but as of Tuesday sat nearly 10 points—or about 50%—above where it was when Trump took office.
Stocks, which are riding a six-day winning streak, have regained nearly all of their “Liberation Day” losses. Though, with tariffs on China still 145% higher than at the start of the year and no major trade deals announced since the tariffs were paused, uncertainty remains high on Wall Street.
Bonds and the Dollar Haven't Fared Much Better
Trump’s tariffs have also rattled bond and currency markets. Treasury yields slid throughout the first months of Trump’s second term as investors got their first taste of the president’s unpredictable, ever-shifting trade policy. Economists warned tariffs would deal a blow to economic growth and raise prices; uncertainty about the tariffs and their fallout spurred a sharp drop in consumer and business confidence.
The 10-year Treasury yield slumped to a 6-month low around the time of “Liberation Day” as stock market chaos drove investors into the relative safety of bonds. Then something unexpected happened: yields surged as bonds sold off despite no discernible change in the tariff or economic outlooks.
At the same time, the U.S. dollar, which one would expect to rise with Treasury yields, slumped. The simultaneous sell-off of Treasury debt and U.S. dollars—two long-time safe havens for global investors—prompted some experts to wonder whether the world was responding to Trump’s tariffs by shunning U.S.-based assets, a phenomenon analysts dubbed the “Sell America” trade.