Closing Recap 

U.S. stocks staged a spectacular relief rally, erasing deep overnight losses to finish with massive gains, reportedly ignited by hopes of a tariff pause; gold and oil prices soared, while Treasury yields spiked sharply higher in a notable divergence. 

Key Takeaways 

• Massive Reversal Rally: Equities experienced a stunning turnaround, with major indices surging 7-12% after plunging overnight, driven by tariff de-escalation hopes. 
• Tariff Pause Hope Ignites Rally: Headlines (potentially inaccurate, based on prior days) suggesting a 90-day tariff pause appeared to be the primary catalyst for the ferocious buying. 
• Extreme Fear & Oversold Conditions: The rally occurred despite rock-bottom sentiment (Fear & Greed Index at 4) and deeply oversold technical indicators, suggesting capitulation may be near. 
• VIX Remains Elevated: Despite the huge stock gains, the VIX remained significantly elevated, reflecting persistent underlying anxiety. 
• Gold and Oil Surge: Both gold and crude oil prices posted strong gains, benefiting from safe-haven demand (gold) and eased recession fears/tariff hopes (oil). 
• Yields Spike Sharply: In a major divergence, Treasury yields surged higher, with the 10-year climbing significantly, erasing earlier safe-haven bids. 

Market Overview 

In a session defined by extreme volatility and a powerful reversal, U.S. stocks clawed back from the brink, ending with extraordinary gains. The day began under immense pressure, continuing the “tariff tantrum” that followed China’s retaliatory tariff hikes and devastating losses late last week. Overnight futures pointed to another brutal open, extending the market’s well-warranted fear. However, sentiment shifted dramatically mid-session. Headlines suggesting a potential 90-day pause on tariffs by the Trump administration (though potentially unconfirmed or inaccurate based on recent history) appeared to ignite a massive short-covering rally and wave of buying. 

Index	Up/Down	% Change	Last
DJ Industrials	2962.86	0.0787	40608
S&P 500	474.13	0.0952	5456
Nasdaq	1857.06	0.1216	17124
Russell 2000	152.44	0.0866	1913

This rally occurred against a backdrop of extreme pessimism. The Fear & Greed Index plumbed new depths (4/100), and technical indicators screamed “oversold,” with only 6% of S&P 500 stocks above their 50-day moving average yesterday. The VIX, while off its overnight highs above 60, remained near 50, indicating significant fear. Historically, such extreme readings and sharp VIX spikes have often preceded market bounces. The market’s performance remains the worst start to a presidential term since 1928, and key technical damage (like the Nasdaq’s 50-day MA crossing below the 200-day MA) has occurred. Despite the powerful rally today, the market remains highly sensitive to tariff headlines, and underlying capitulation signals (like the recent spike in sell-side downgrades) suggest deep distress. Early trading saw defensive sectors outperform, but the later rally was likely broad-based.

Economic Data

Economic data released today showed strength in the housing market (prior to the recent yield spike) and robust wholesale activity. 

• Mortgage Applications (Week Ended Apr 4): The MBA Mortgage Market Index surged +20.0% to its highest level since September. The purchase index climbed +9.2%, and the refinance index soared +35.3% as the average 30-year mortgage rate fell 9 bps to 6.61% (lowest since October) during that specific week. (Note: This data predates the most recent surge in Treasury yields). 
• Wholesale Sales & Inventories (Feb): Wholesale sales jumped +2.4% in February, a strong rebound from January’s revised -0.9% decline. The inventory/sales ratio improved to 1.30 months from 1.32 months. 

Commodities, Currencies, and Treasuries

Commodities experienced significant rallies alongside equities. Gold futures jumped nearly 3% ($89.20) to settle near $3,080/oz, benefiting initially from safe-haven demand as China escalated tensions overnight, and likely sustained by hopes that a tariff pause could ease deflationary recession fears while potentially keeping inflationary pressures alive. Crude oil prices executed a massive reversal; after hitting four-year lows early, WTI futures surged $2.77 (+4.65%) to settle above $62/bbl. The rally was directly tied to hopes that a tariff pause would avert an immediate global recession, bolstering demand expectations. 

Asset	Up/Down	Last
WTI Crude	2.77	62.35
Brent	2.66	65.48
Gold	89.2	3079.4
EUR/USD	-0.0022	1.0934
USD/JPY	1.85	148.14
10-Year Note	0.099	0.04359

Brent crude saw similar gains. In stark contrast to the equity rally, Treasury yields spiked dramatically higher. The 10-year yield surged roughly 10 basis points to close near 4.36%, having completed an incredible ~60 basis point climb from its lows near 3.88% in just three days. This marks one of the largest 3-day yield increases since 1982 and a significant divergence from typical risk-on dynamics, possibly reflecting inflation fears, supply concerns, or bond market disbelief in the tariff pause narrative. The U.S. dollar strengthened, particularly against the yen, aligning with the risk-on stock move but contrasting with the usual implications of sharply rising yields.

Looking Ahead 

The market desperately needs confirmation regarding the rumored 90-day tariff pause – its reality and scope will be paramount. Any backtracking or denial could trigger another sharp reversal lower. Assuming the rally holds, focus will shift back to the underlying economic health, with key inflation reports (CPI/PPI) due this week and Q1 earnings season kicking off Friday with major banks. The extreme technical readings and sentiment suggest potential for a bottoming process, but the tariff situation remains the primary overhang, and the sharp rise in Treasury yields presents a new headwind to monitor closely. Expect continued high volatility driven by headlines.