Stock Market Update

[BRIEFING.COM] The stock market started the new week with significant volatility. The S&P 500 (-1.6%), which entered bear market territory right out of the gate (i.e., a 20% drop from its recent peak), traded up as much as 3.3% at its session high and down as much as 4.7% at its session low. 

The ebb and flow in equities have followed this morning's mixed headlines. The early surge higher coincided with reports, which have been refuted, that President Trump is considering a 90-day pause on the tariffs, except for China. 

The president said in a subsequent Truth Social post that if "China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose additional tariffs on China of 50%, effective April 9th."

Overall, equity market dynamics continue to indicate worries about an economic slowdown, which may impact corporate earnings, exacerbated by the trade war. Many stocks have participated in today's retreat, as evidenced by market breadth. Decliners lead advancers by a better than 9-to-1 margin at the NYSE and by a better than 4-to-1 margin at the Nasdaq.

The CBOE Volatility Index (VIX), referred to as the "fear gauge," spiked above 50.00. The move reflects increased hedging as investors brace for more volatility and downside risk ahead.

Selling picked up in Treasuries as the mixed headlines rolled in this morning. The 10-yr yield is up 15 basis points to 4.14%.