Markets Fluctuate, Bonds Rattle on Trump’s Tariff War

9 Apr at 11:05 am

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Markets Fluctuate, Bonds Rattle on Trump’s Tariff War/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stock markets showed early resilience Wednesday despite steep swings globally, as President Trump’s latest tariffs stirred uncertainty. While equities hovered near flat, Treasury bond yields surged, hinting at growing market stress. The deepening trade conflict with China has investors weighing recession risks against hopes for future negotiations.

U.S. Stocks Volatile as Global Tariff Fears Grow — Thomas Schreck works on the floor at the New York Stock Exchange in New York, Tuesday, April 8, 2025. (AP Photo/Seth Wenig)

Wall Street Braces for Impact as Trump’s Tariffs Roil Bonds: Quick Looks

Market Snapshot: S&P 500 flat, Dow down 170 points, Nasdaq up 0.5%
Trump’s New Tariffs: 104% tax on Chinese imports went into effect at midnight
China’s Response: Beijing to raise U.S. tariffs to 84% starting Thursday
Bond Market Stress: 10-year Treasury yield jumps to 4.36%
Delta Air Lines Impact: Pulled 2025 forecast, citing global uncertainty
Global Market Reaction: Sharp losses in London, Tokyo, Paris; Chinese stocks rise
Investor Concerns: Fears of prolonged trade war and potential U.S. recession
Corporate Fallout: Planning becomes harder amid escalating economic unpredictability

Markets Fluctuate, Bonds Rattle on Trump’s Tariff War

Deep Look

NEW YORK — April 9, 2025 — U.S. stocks wobbled but avoided major losses Wednesday as financial markets worldwide reacted to escalating trade tensions sparked by President Donald Trump’s sweeping new tariffs on global imports, including a 104% tax on Chinese goods.

The S&P 500 held mostly steady in early trading after a volatile futures session, while the Dow Jones Industrial Average dropped 170 points, or 0.5%. The Nasdaq managed to eke out a 0.5% gain as investors searched for signs of stabilization.

But while equities showed tentative calm, the real story unfolded in the U.S. bond market, where Treasury yields surged, indicating a possible cash crunch or growing anxiety over future inflation and economic slowdown.

“This level of brinkmanship between the world’s two largest economies is unsettling,” one analyst noted. “Markets are reacting not just to tariffs, but to the uncertainty about what comes next.”

Tariff Fallout Hits Bonds First

The 10-year Treasury yield rose sharply to 4.36%, up from 4.26% Tuesday — a massive shift for bonds — and even briefly hit 4.50% earlier in the session. For comparison, it sat at just 4.01% late last week.

Analysts attributed the spike to a combination of factors, including hedge funds liquidating bonds to cover equity losses and foreign investors offloading Treasurys due to rising trade tensions. Both scenarios depress bond prices, which in turn raises yields.

Higher yields ripple across the economy, raising borrowing costs for consumers and businesses alike — from mortgages to credit cards.

“These yield movements signal deeper stress in the financial system,” said one market strategist. “This isn’t just about tariffs anymore.”

Corporate Caution Emerges

Even as Wall Street looked for a silver lining, corporate America signaled caution. Delta Air Lines scrapped its 2025 financial forecast, citing weakened travel demand and broad uncertainty stemming from the trade war.

“With global growth slowing and business travel bookings dipping, it’s too volatile to project,” said Delta CEO Ed Bastian. The airline’s stock nonetheless rose 7.1%, as investors welcomed its proactive cost-control stance.

Other companies are also bracing for fallout. Economists fear that extended tariffs will dampen consumer demand, depress investment, and potentially trigger a U.S. recession if no resolution is reached soon.

Trump’s Trade Gamble Escalates

The pressure on markets follows Trump’s midnight move to implement tariffs up to 104% on Chinese imports. Beijing quickly hit back, saying it would raise its own tariffs on U.S. goods to 84% starting Thursday.

“If the U.S. insists on further escalation, China has the firm will and abundant means to fight to the end,” said China’s Ministry of Commerce.

Wall Street remains hopeful, however, that ongoing outreach from foreign leaders and trade groups could coax Trump into negotiating. That potential for resolution has helped stocks avoid steeper declines — at least for now.