US stocks got hit hard. US yields moved sharply lower. The USD fell sharply after the tariff announcements late yesterday.
Yesterday Pres. Trump announced reciprocal tariffs against most countries. Below are the tariffs against major US export countries:
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Canada: 10% baseline tariff.​
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Mexico:10% baseline tariff
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China: 34% tariff.​
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Japan: 24% tariff.
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Germany: 20% tariff (as part of the European Union).​
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South Korea: 25% tariff
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United Kingdom: 10% baseline tariff
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France: 20% tariff (as part of the European Union)
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India: 26% tariff.​
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Taiwan: 32% tariff.
Looking at the USD, it fell the hardest vs the CHF. The CHF benefitted the most from flight to safety flows despite tariffs being hiked by 31%. The USD fell -2.47% against the CHF.
The JPY was another beneficiary even though autos will be a big headwind for Japan. Japanese automakers heavily rely on the U.S. market, with a substantial portion of their vehicles imported either directly from Japan or via manufacturing facilities in other countries. For instance, in 2024, major Japanese carmakers exported nearly 880,000 vehicles to the U.S. from Mexico alone. Cars arriving from Japan on or after April 9, 2025 will have a 25% tariff + 2.5% import duty + 24% reciprocal tariff for a total cumulative tariff of 51.5%. Ouch.
For today, the USDJPY fell -2.06%
The dollar also fell:
- -1.66% vs the EUR
- -1.03% vs the CAD
- -0.73% vs the NZD
- -0.61% vs the GBP
- -0.38% vs the AUD
Although the USD fell vs the major currencies, it also rebounded in the US session.
A rebound did not happen in the US stock market. The major indices tumbled sharply with the Nasdaq index falling near 6% which was the 4rd largest one-day decline going back to at least 2015 (the other 3 were in March 2020).
The final numbers for the day are showing:
- Dow industrial average fell $-1679.39 or -3.98% at 40,545.93. That was the worst day since June 2020
- S&P index fell -274.45 points or -4.84% at 5396.52. That was its worst day since June 2020
- NASDAQ index fell -1050.44 points or -5.97% at 16550.61. That was its worst decline since March 16, 2020.
In the US debt market, yields are also sharply lower as investors prepare for a recession:
- 2 year yield 3.687%, -21.6 basis points. The yield is in its lowest level since October 3. The low yield for 2024 was at 3.508%
- 5-year yield 3.729%, -22.3 basis points. The yield is lowest since October 4.
- 10 year yield 4.032%, -16.3 basis points. The yield is low since October 4
- 30 year yield 4.474%, -7.7 basis points. The yield is still higher than the lowest level in March which came in at 4.424%.
In other markets:
- Crude oil fell sharply on the combination news of lower global growth as a result of tariffs and a potential trade war, and comments from OPEC+ that it would increase crude production faster than previously announced. The price of crude oil fell $-5.10 or -7.11% and $66.61.
- Gold prices also fell surprisingly by $-23.95 or -0.76% to $3114.28.
- Silver fell $2.06 or -6.09% at $31.82.
- Bitcoin felt $196 or -0.24% and $82,333. The low price extended to $81,200. The high price was at $83,896.
