President Trump’s tariff blitz has created a “nightmare situation” on Wall Street, with traders dumping stocks and U.S. Treasurys at near-unprecedented rates, defying historical correlations that have held for decades, according to market commentator The Kobeissi Letter.
“Something broke this week,” the publication said, pointing to a more than 10% plunge in the S&P 500 Index and a 55-basis-point spike in the 10-year U.S. Treasury yield.
The most alarming part? Yields are now higher than they were before the Fed began cutting rates in September — with stocks now pricing in an imminent recession.
“Bonds, gold, and stocks are all crashing at the same exact time,” Kobeissi noted. “This is a mass run to the sidelines right now.”
Investors are dumping assets across the board as President Trump upends the global financial order with his so-called “reciprocal tariffs” campaign.
Although Trump has since walked back some of his biggest threats — culminating in a 90-day freeze on select tariffs — the White House is preparing for a prolonged trade battle with China.
On Thursday, Trump announced that tariffs on Chinese imports had climbed to at least 145%, escalating from the 125% and 104% duties unveiled in recent days.
Market chaos “no big deal”
The White House is pursuing an aggressive tariff agenda with little regard for the stock market — something seemingly confirmed by Trump’s top trade architect, Peter Navarro.
“You had the highest rise in stock market history yesterday. Of course, there’s gonna be a little pullback,” Navarro said, referring to the S&P 500’s 9.5% rally on Wednesday, April 9.
The 3.5% drop on Thursday? “Just a normal retracement after a big day. It’s no big deal,” he said.
What Navarro didn’t mention: markets have been on a knife’s edge since mid-February, when Trump ramped up his trade-war rhetoric. On April 2, his “Liberation Day” tariff announcement wiped $5 trillion off U.S. markets in just two days.
Even with the April 9 relief rally, U.S. stocks had lost a combined $9.6 trillion since Inauguration Day. Experts now worry that Wall Street’s chaos could soon spill over into the real economy, especially as recession risks mount.
“Everything is still very volatile, because with Donald Trump, you don’t know what to expect,” Francis Lun, CEO of Geo Securities, told the Associated Press.
“This is really big uncertainty in the market. The threat of recession has not faded,” Lun added.
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