U.S. Stocks Sink Ahead of Trump’s 104% Tariffs on China
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Why are U.S. stocks experiencing volatility?
U.S. stocks rally stalls ahead of 104% tariffs on China going into effect at midnight. Plus, how do you trade in turbulent times? Some investors are turning to a 1997 book for strategies.
What is the impact of Trump's tariffs on the market?
Ever since the COVID pandemic, there is a really tremendous shift. And the pre-2020 world is just very different from where we are today. And we're seeing that a lot now with Trump's tariffs.
How is the commercial real estate sector affected?
And how President Trump's tariff plan could send coastal commercial real estate into a tailspin. It's Tuesday, April 8th. I'm Alex Osola for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. More volatility in the markets today. There was a big bounce-back rally in the morning stemming from comments from Treasury Secretary Scott Besant, who said that the Trump administration was open to negotiating to reduce tariffs. But by the afternoon, the enthusiasm had stalled out, as U.S. Trade Representative Jameson Greer said Trump won't provide tariff exemptions for individual products or companies. U.S. stocks capped off a volatile session in a downswing. The Dow rose more than 1,400 points early on, reflecting investors' faith that the administration may deliver on talks of potential trade deals, but ultimately closed down about 0.8 percent. The S&P 500 fell about 1.6 percent.
And the Nasdaq, which had rallied more than 4 percent earlier, ended the day roughly 2.2 percent lower, blowing its biggest intraday gain since at least 1982. I'm joined now by WSJ Markets reporter Jack Pitcher. So, Jack, we saw a lot more volatility today. What is going on?
Yeah, we're looking at some historic volatility as far as the ranges the major stock indexes have been trading in day to day. Today started off with a lot of optimism. There were some headlines overnight that the Trump team was willing to negotiate on tariffs. Some people were hoping there would be an announcement today that these are getting pushed back before they're actually implemented tomorrow. By the afternoon, it was clear that that was not the case. We saw the S&P 500 up more than 4% at one point earlier in the day, and it closed down more than 1%. In our data going back to 1978, that is the first time that's ever happened.
How long can volatility stay high like this?
It's impossible to know when things might calm down, but right now with so little clarity on the tariff situation and markets reacting so heavily to individual headlines, it's so important whether or not these are in effect, whether they're paused because the business implications are so wide-reaching. Traders, investors we're talking to expect volatility to remain highly elevated as long as it's an open question of whether these tariffs are implemented and whether deals have been cut.
That was WSJ Markets reporter Jack Pitcher. Thanks so much, Jack.
Thank you.
Meanwhile, White House Press Secretary Caroline Leavitt confirmed that President Trump's tariffs, including the steep duties set for Chinese imports, will go into effect just after midnight. Leavitt said China's retaliatory tariffs were a mistake, and in response, the administration would increase China's total tariff rate to 104 percent at midnight. Trump had already placed 20 percent tariffs on Chinese imports since taking office. He was set to increase the rate by 34 percent starting tomorrow, but said he would add an additional 50 percent because of China's retaliation. Levitt said the administration would prioritize allies as advisers consider deals to lower tariffs. Markets are particularly volatile at the moment.
Recently, the Chicago Board Options Exchange's Volatility Index, or VIX, also known as Wall Street's fear gauge, hit its highest level since early 2020, though it's come down a bit since. For investors, this could be a moment of reckoning. But some feel prepared for a world run amok thanks to a surprising playbook, a 1997 book called The Fourth Turning, An American Prophecy. One of its authors, Neil Howe, is planning to launch a financial product this summer that would invest in assets he believes would do well during generational crises and extreme market turbulence. For more, I'm joined by Kevin Dugan, who covers business culture for the journal. Kevin, what are some of these assets that author Neil Howe considers relatively safe in such volatile circumstances?
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Chapters
6 chapters
1
Why are U.S. stocks experiencing volatility?
0:03–0:17
2
What is the impact of Trump's tariffs on the market?
0:17–0:30
3
How is the commercial real estate sector affected?
0:30–4:56
4
What strategies are investors using in turbulent times?
4:56–5:55
5
What insights does Neil Howe provide on investing?
5:55–7:40
6
Why is 'The Fourth Turning' still relevant today?
7:40–11:07
Speakers
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