Closing Recap

U.S. stocks staged a powerful “Turnaround Tuesday” rally, snapping a multi-day losing streak on hopes of easing U.S.-China trade tensions sparked by comments from Treasury Secretary Bessent; oil surged, gold eased off record highs, the dollar bounced slightly, and Treasury yields were mixed. 

Key Takeaways 

• Strong Rebound: Major indices posted significant gains (Dow +2.66%, S&P 500 +2.51%, Nasdaq +2.71%), snapping a 4-day losing streak. 
• Trade De-escalation Hopes: Rally ignited by comments from Treasury Secretary Bessent suggesting the U.S.-China tariff standoff is unsustainable and likely to de-escalate, along with White House remarks on ongoing talks. 
• Gains Pared from Highs: Stocks pulled back from session highs (Dow was up ~1000 points) after more nuanced details emerged suggesting negotiations will be a “slog.” 
• Volatility Eases Slightly: Despite the big rally, the VIX remained elevated but likely eased from recent peaks (based on prior day’s action). Extreme volatility persists (19 days of +/-1% moves YTD). 
• Oil Rallies, Gold Slips: Crude oil gained strongly on improved demand outlook tied to trade hopes, while gold eased slightly after hitting record highs. Bitcoin surged. 
• Dollar Bounces Modestly: The U.S. dollar recovered slightly after hitting multi-year lows earlier in the week. 
• Treasury Yields Mixed: Long-term yields fell (risk-off/recession fear linger), while short-term yields rose (risk-on/weak auction). 

Market Overview 

Wall Street executed a dramatic reversal today, with major stock indices posting hefty gains and snapping a painful four-day losing streak. This “Turnaround Tuesday” saw the Dow jump as much as 1,000 points intraday, fueled primarily by renewed hopes for de-escalation in the U.S.-China trade conflict. The initial catalyst appeared to be comments from Treasury Secretary Scott Bessent at a closed-door event, where he reportedly called the current tariff standoff “unsustainable” and expressed expectations for an eventual de-escalation, even while describing future negotiations as a “slog.” White House Press Secretary Karoline Leavitt also contributed to the positive tone by noting “a lot of progress” in ongoing trade negotiations with 34 countries this week.

Index	Up/Down	% Change	Last
DJ Industrials	1016.57	0.0266	39186
S&P 500	129.56	0.0251	5287
Nasdaq	429.52	0.0271	16300
Russell 2000	49.96	0.0271	1890

This news provided significant relief to a market battered by escalating tariff threats and fears of Fed independence being undermined by President Trump’s recent attacks on Chair Powell. Sectors heavily exposed to global trade and China, such as energy, materials, technology, and consumer discretionary, led the rally. However, the gains were pared significantly from the day’s highs after more detailed reports emerged from Bessent’s meeting, emphasizing the difficulty and length of the expected negotiation process. Reports that potential deals with Japan and India might lack specific details initially also tempered enthusiasm. Despite the pullback, the strong close suggests investors are desperately seeking any sign of an off-ramp from the trade war narrative, even as underlying sentiment remains extremely fearful.

Economic Data

Yesterday’s regional manufacturing data continued to show weakness, but was largely ignored by markets focused on trade headlines. 

• Richmond Fed Manufacturing Index (Apr): Weakened further to -13 from -4 in March. Shipments (-17 vs -7) and Services Revenues (-7 vs -4) components also deteriorated. 

Commodities, Currencies, and Treasuries 

Gold prices saw volatile trading, hitting new record highs ($3,509.90) early before pulling back to settle slightly lower by $5.90 at $3,419.40/oz as the intense safe-haven bid eased somewhat on the trade optimism. Crude oil prices rallied strongly, with WTI gaining $1.23 (+1.95%) to settle at $64.31/bbl. The gains were directly linked to hopes that easing trade tensions would avert a severe global slowdown, thereby supporting energy demand. Bitcoin surged to seven-week highs above $91,600, potentially benefiting from the risk-on mood or acting as an alternative safe haven. The U.S. dollar index bounced modestly (+0.55%) after hitting multi-year lows, aided perhaps by the positive trade tone or profit-taking in currencies like the Euro. Treasury yields were mixed; the 10-year yield fell, reversing some of Monday’s spike as growth concerns lingered, while the 2-year yield rose following a relatively weak auction result.

Asset	Up/Down	Unit / % Change	Last
WTI Crude	1.23	USD/bbl	64.31
Brent	1.18	USD/bbl	67.44
Gold	-5.9	USD/oz	3419.4
EUR/USD	-0.0087	USD	1.1426
USD/JPY	0.59	JPY	141.43
10-Year Note	-0.018	%	0.04387

Looking Ahead

The market remains highly sensitive to trade headlines, and today’s rally hinges on the perception of de-escalation. Any contradictory statements or lack of tangible progress in negotiations could easily reverse sentiment. Investors will continue to monitor comments from officials and await concrete details on potential trade agreements. The focus also remains on the Q1 earnings season, with results potentially offering guidance on how companies are navigating the uncertain trade environment. Upcoming economic data will also be watched for confirmation of whether the economy is weathering the storm.