That was some kind of rally yesterday after President Trump announced a 90-day pause on the reciprocal tariff rate for most countries. China was not in that grouping. Its tariff rate increased to 125% from 104%.<\/p>\n\n\n\n
The S&P recorded a 9.5% gain while the Nasdaq Composite recorded a 12.2% gain. The latter was the second-best day ever for the Nasdaq, whereas the former was the third largest single-day gain since World War II, according to CNBC<\/em>.<\/p>\n\n\n\n That relief rally was undoubtedly catalyzed by short-covering activity, yet most investors will take the gains no matter how they come, given how fast the losses piled up after the April 2 reciprocal tariff announcement. <\/p>\n\n\n\n Not surprisingly, foreign markets followed suit with big gains of their own. Japan’s Nikkei, for instance, soared 9.1%. <\/p>\n\n\n\n There is some backtracking this morning, however. That is not surprising. Given the scope of yesterday’s gains, we suspect plenty of participants saw that as a gift that made them close to whole again in terms of the tariff sell-off and are opting to get out knowing that the tariff, economic, and earnings uncertainty was not resolved with yesterday’s 90-day pause (key word) and escalated tariff action for China.<\/p>\n\n\n\n Currently, the S&P 500 futures are down 105 points and are trading 1.9% below fair value, the Nasdaq 100 futures are down 472 points and are trading 2.4% below fair value, and the Dow Jones Industrial Average futures are down 593 points and are trading 1.4% below fair value.<\/p>\n\n\n\n Once again, there is a lot for market participants to take in today, including the NEC Director’s declaration that it will take an “extraordinary deal” for President Trump to lower the 10% global tariff, the EU announcing it is suspending its countermeasures for 90 days to negotiate with the U.S., a disappointing earnings report from CarMax (KMX)<\/strong>, a $22 billion 30-yr bond auction at 1:00 p.m. ET, and China reporting a 0.1% yr\/yr decline in March CPI.<\/p>\n\n\n\n Other focal points include the data out of the U.S. this morning.<\/p>\n\n\n\n