Market Chacha: Tariffs & Trepidation

Fresh news and strategies for traders. SPY Trader episode #1085. Hey everyone, it's your pal Wally Pip here, and welcome back to Spy Trader! It's 12 pm on Thursday, April 10th, 2025, Pacific time, and the market's doing the chacha – one step forward, two steps back. What did the financier say to his money before going to sleep? "Goodnight, sleep tight, don't let the bears bite." So, yesterday we saw a massive surge after President Trump announced a 90day pause on some tariffs. The S&P 500 jumped almost 10%, the Nasdaq over 12%, and the Dow had its best day in years. But today, it's payback time. We're seeing a significant pullback, giving back some of those gains. The Dow, S&P, and Nasdaq are all in the red. What's driving this? Well, even though there's a tariff pause, Trump increased tariffs on Chinese imports, initially to 125% and now clarified to be 145%. That's a big deal, folks. The EU is holding off on retaliating for now, but this China situation is still a major headwind. Remember, even with yesterday's surge, we're still below where we were before all these tariff announcements started on April 2nd. Let's talk sectors. Tech stocks, which led yesterday's rally, are getting hammered today. We're seeing Tesla, Nvidia, and even Apple taking a hit. Industrials are also down. Delta and United Airlines are also feeling the pain after their Wednesday jump. Nike is struggling, likely due to those tariffs affecting its production. U.S. Steel is an interesting one to watch with the Nippon Steel takeover bid still in play. Inflation data came in at 2.4% annually for March, which is a move in the right direction, but these tariffs could throw a wrench in that. We're still worried about a potential recession, and the Fed is likely to hold rates steady for now. Okay, so what should you do? Caution is the name of the game. This market is super volatile, reacting to every trade headline. Keep your portfolio diversified. I'd consider underweighting those sectors that are really exposed to the tariffs, like tech and industrials. Look at defensive sectors like consumer staples – people always need their toilet paper, right? Bonds, specifically US Treasuries, might offer some safety in this storm. Bottom line: keep a close eye on trade news, economic data, and what the Fed is saying. And most importantly, don't panic! Stick to your longterm plan. That's all for today's Spy Trader. Stay safe out there, and I'll catch you next time!