Closing Recap

U.S. stocks finished lower for a second straight day as caution prevailed ahead of today’s FOMC meeting, despite some positive trade deal hints; gold surged to near record highs, the dollar fell further, oil prices rebounded, and Treasury yields eased after a strong auction. 

Key Takeaways 

• Second Day of Declines: Major indices slipped again, erasing early attempts to stabilize, with markets cautious before the Fed’s policy decision. 
• Tariff Headlines Mixed: Treasury Secretary Bessent hinted at potential trade deal announcements this week, but President Trump’s firm stance with Canada and potential EU retaliation kept trade fears alive. 
• Bearish Commentary Weighs: Downbeat remarks from Paul Tudor Jones on stocks (predicting new lows even with tariff easing) and AI risks added to investor anxiety. Negative corporate guidance revisions also noted. 
• Gold Surges to Near Records: Gold prices jumped over 3% as investors sought safety amid economic uncertainty, Fed anticipation, and a falling dollar. 
• Dollar Slides Further: The U.S. dollar continued its decline against major currencies, reflecting shaken confidence and tariff impacts. 
• Oil Rebounds: Crude oil prices rose over 3% on various factors including specific inventory dynamics, despite broader demand concerns. 
• Yields Ease After Solid Auction: Treasury yields pulled back, particularly after a well-received 10-year note auction, signaling some demand for U.S. debt.
•  Record Trade Deficit: The U.S. trade deficit widened to a record high in March, partly due to businesses front-loading imports ahead of tariffs. 

Market Overview 

U.S. equity markets ended lower for the second consecutive session, failing to hold onto early gains as investor caution dominated ahead of today’s pivotal Federal Reserve policy meeting. While U.S. Treasury Secretary Scott Bessent offered a sliver of optimism by suggesting trade agreements with some partners could be announced as early as this week, but the broader trade narrative remained fraught with tension. President Trump took a hard line with Canadian Prime Minister Mark Carney regarding tariffs, and reports surfaced of the EU potentially targeting €100 billion in U.S. goods with retaliatory levies if a deal isn’t reached. This kept markets on edge, with all three major U.S. indices remaining below their long-term 200-day moving averages, a bearish technical signal. 

Index	Up/Down	% Change	Last
DJ Industrials	-389.83	-0.0095	40828
S&P 500	-43.54	-0.0077	5606
Nasdaq	-154.58	-0.0087	17689
Russell 2000	-21.07	-0.0105	1983

Adding to the cautious mood were downbeat comments from influential figures. Legendary hedge fund manager Paul Tudor Jones predicted stocks would hit new lows even if tariffs on China are moderated, citing the entrenched positions of both President Trump on tariffs and the Fed on not cutting rates. He also voiced significant concerns about the potential existential threat posed by AI. Further darkening the outlook, JP Morgan Asset Management highlighted that S&P 500 companies have issued the most downward earnings revisions since Q1 2014, and over 60% of CEOs anticipate a recession in the next six months. Amidst this uncertainty, safe-haven assets like gold surged, while the U.S. dollar continued its broad decline.

Economic Data

Yesterday’s main economic release was the U.S. trade deficit, which widened to a record, partly influenced by tariff-related import front-loading. Global debt also hit a new record.

•  U.S. Trade Deficit (Mar): Widened to a record high of -$163.52 billion as imports (+4.4%) surged ahead of tariffs, while exports (+0.2%) saw modest growth. The goods deficit was particularly large, while the services surplus provided a small offset. 
• Global Debt (Q1 – IIF): Rose by ~$7.5 trillion to a record over $324 trillion. China, France, and Germany were major contributors. Emerging market debt also hit a record, with China accounting for a significant portion of that increase. 

Commodities, Currencies, and Treasuries 

Gold prices experienced a massive surge, with June futures climbing $100.50 (+3.02%) to settle at $3,422.80 per ounce, less than 2.5% from new all-time highs. The rally was driven by intense safe-haven demand ahead of the FOMC meeting, a sharply falling U.S. dollar, and persistent concerns about the economic impact of tariffs. Crude oil prices rebounded strongly, with WTI gaining $1.96 (+3.43%) to settle at $59.09/bbl. The reasons for the oil rally were less clear but could involve specific inventory expectations, technical factors, or positioning ahead of Fed/trade news. Natural gas prices continued to slide. The U.S. dollar index resumed its sharp decline, falling significantly against the Euro and Yen, as concerns over U.S. economic stability and trade policy weighed heavily. Reuters polling indicated growing concern among FX strategists about the dollar’s safe-haven status. Treasury yields eased, particularly after a strong 10-year note auction showed good demand. The 10-year yield settled around 4.305% after being higher earlier. Bitcoin prices edged up.

Asset	Up/Down	Unit / % Change	Last
WTI Crude	1.96	USD/bbl	59.09
Brent	1.92	USD/bbl	62.15
Gold	100.5	USD/oz	3422.3
EUR/USD	0.0054	USD	1.1367
USD/JPY	-1.26	JPY	142.45
10-Year Note	-0.038	%	0.04305

Looking Ahead 

All eyes are now squarely on the Federal Reserve’s policy announcement and subsequent press conference by Chair Powell tomorrow afternoon. While no rate change is expected, the Fed’s assessment of the current economic conditions, inflation outlook, and particularly the impact of tariffs will be critical for market direction. Any shift in tone or guidance could trigger significant volatility. Trade headlines, especially regarding potential deals or further escalations, remain a key wildcard. Q1 earnings season continues, though likely to be overshadowed by the Fed and trade news in the immediate term.