Closing Recap 

U.S. stocks plummeted, erasing a significant portion of yesterday’s massive rally, as another U.S. tariff hike on China intensified trade war fears despite cooler-than-expected CPI data; gold surged as a safe haven, the dollar was crushed, oil plunged, and Treasury yields finished higher after volatility.

Key Takeaways 

• Sharp Reversal Lower: Equities sold off hard throughout the day, with the S&P 500 falling nearly 3.5% and the Nasdaq over 4.3%, giving back much of Wednesday’s relief rally. 
• U.S. Escalates China Tariffs AGAIN: The White House announced another tariff hike on China (now totaling 145%), further escalating the trade conflict and spooking markets. 
• CPI Data Ignored: Cooler-than-anticipated March CPI inflation data failed to support markets, completely overshadowed by tariff fears. 
• Near Circuit Breaker Intraday: The S&P 500 neared the -7% intraday threshold that triggers market-wide trading halts. 
• Gold Surges: Investors flocked to gold as a safe haven, pushing prices up over 3%. 
• Dollar Crushed: The U.S. Dollar Index plunged sharply (-2%) against major currencies amid trade war and potential Fed response concerns. 
• Oil Plunges: Crude oil prices dropped significantly on fears of tariff-induced recession and demand destruction. 
• Yields End Higher: Despite strong safe-haven flows into gold and a dollar collapse, Treasury yields finished higher after erasing early gains, following a decent 30-yr auction. 

Market Overview 

The stock market giveth, and the stock market taketh away. After yesterday’s spectacular relief rally, severe selling pressure returned with a vengeance today, sending major indices tumbling. The S&P 500 flirted with the -7% circuit breaker level intraday before paring losses slightly, while the Nasdaq 100 did breach that mark at its lows. The catalyst was clear: a further, aggressive escalation of tariffs on China by the Trump administration, reportedly bringing the total levy to a staggering 145%. This move came despite China not immediately retaliating to the previous day’s hike and intensified fears of an intractable trade war with potentially devastating consequences for the global economy.

Index	Up/Down	% Change	Last
DJ Industrials	-1014.79	-0.025	39593
S&P 500	-188.85	-0.0346	5268
Nasdaq	-737.66	-0.0431	16387
Russell 2000	-81.76	-0.0427	1831

The market’s extreme sensitivity to trade developments was evident as even positive news on the inflation front was completely disregarded. The March Consumer Price Index (CPI) came in cooler than expected, both on the headline and core measures, which would typically be seen as a positive for markets concerned about Fed policy. However, in the current environment, tariff fears trumped inflation data. Uncertainty reigns supreme, with markets remaining on edge awaiting China’s next move and grappling with the potential economic fallout. The selling pressure was broad-based (“blood in the streets”), marking the fifth down day in the last six trading sessions and underscoring the fragile state of investor confidence. Data showing significant outflows from emerging markets, especially China, in March further highlighted the global impact of the trade dispute.

Economic Data

Today’s key inflation report showed a welcome cooling trend, but it was completely ignored by a market fixated on trade war risks. Jobless claims remained stable. 

• Consumer Price Index (CPI) (Mar): Headline CPI unexpectedly fell -0.1% m/m (vs. +0.1% consensus), while core CPI rose just +0.1% m/m (vs. +0.3% consensus). Year-over-year, headline CPI was +2.4% (vs. +2.6% est.) and core CPI was +2.8% (vs. +3.0% est.). 
• Real earnings rose +0.3%. Weekly Jobless Claims: Increased slightly to 223,000 (matching consensus) from 219,000 prior, remaining historically low. Continuing claims fell to 1.850 million (below 1.882M consensus). 
• China Inflation (Mar – Reported Earlier): CPI was weak at -0.1% y/y (vs. 0.0% est.), while PPI deflation deepened to -2.5% y/y, signaling weak domestic demand.

Commodities, Currencies, and Treasuries

Gold prices surged over 3% ($98.10) to settle near $3,177.50/oz, benefiting strongly from safe-haven demand and a plunging U.S. dollar as trade war fears intensified. Crude oil prices slumped again, with WTI falling 3.66% to settle near $60/bbl. Fears of a deepening U.S.-China conflict hitting global growth, potentially triggering a recession, along with an EIA demand forecast cut, weighed heavily on prices. Other commodities also pulled back. The U.S. Dollar Index was crushed, falling over 2% to lows not seen since October, as trade war risks and potential implications for Fed policy hammered the currency. The Euro saw its biggest one-day jump since 2022, and the dollar fell sharply against the Yen and Swiss Franc. Treasury yields had a volatile session; after falling overnight, they erased gains and finished higher despite a strong 30-year bond auction. The 10-year yield ended near 4.38%, well off its lows near 4.26% earlier in the day but still reflecting significant underlying uncertainty despite the closing uptick.

Assets	Up/Down	Last
WTI Crude	-2.28	60.07
Brent	-2.15	63.33
Gold	98.1	3177.5
EUR/USD	0.0232	1.1182
USD/JPY	-3.02	144.7
10-Year Note	-0.02	0.04376

Looking Ahead 

The market is now firmly in the grip of the escalating U.S.-China trade war. The immediate focus will be on China’s reaction (or lack thereof) to the latest punishing U.S. tariffs. Any further retaliation could trigger additional selling. Tomorrow brings the Producer Price Index (PPI) inflation data and the unofficial start of Q1 earnings season with reports from major banks (JPM, MS, WFC). While earnings are important, they will likely be interpreted through the lens of potential tariff impacts on future guidance. Volatility is expected to remain exceptionally high, driven by trade headlines and geopolitical developments.