Good morning,
Trump says “big progress” is being made with Japan, easing fears of another currency war. The Nikkei jumped, futures are up, and traders are piling back in — especially into energy, tech, and financials.
Over in Europe, the ECB is preparing for its seventh rate cut in sharp contrast to Powell’s wait-and-see approach.
Meanwhile, Trump has barred Nvidia from selling its H20 chip — a model custom-built to bypass Biden-era restrictions — to China. The move has sparked fears the company could permanently lose ground to domestic rivals.
Netflix reports tonight, and bulls are calling it “Netflix and chill,” a rare safe haven in a market that’s otherwise going bonkers.Let’s get into it.
5 things to know before the bell
🧭 Bessent promises “clarity” — eventually
Treasury Secretary Scott Bessent says help is on the way, just not for 90 days. “Clarity on tariffs,” “clarity on taxes,” “clarity on deregulation” — all coming soon, he told CEOs. The problem is that markets wanted answers like yesterday, and Powell’s “wait-and-see” speech didn’t help either. Translation: get used to uncertainty for a while longer.
📈 $4,500 gold?
Gold popped to a fresh all-time high Thursday, adding more than $100 per ounce by midday as jittery investors chased safe havens. Silver tried to tag along but slipped into the red by the close. The move follows Goldman’s bold new call: $4,500 gold in a worst-case U.S.-China showdown + recession scenario. For now, the yellow metal held around $3,365, but the shine is getting harder to ignore.
🚗 Retail sales go vroom
Retail sales jumped 1.4% in March — the biggest gain since 2023 — but don’t get too excited. Analysts say Americans are panic-buying big-ticket items before tariffs drive prices higher. Auto sales surged 5.3% month-over-month while construction and dining also revved up. “Vehicles are moving off dealer lots faster than at any time since the post-pandemic demand surge,” Wells Fargo said. Tariff FOMO is real.
₿ Crypto cools down (in a good way)
Bitcoin is doing something it’s never done before: keeping its cool. After dipping below $77K last week, the biggest crypto bounced back above $84K and held. Analysts at Oppenheimer say the response to Trump’s tariff whiplash shows crypto is maturing. “It demonstrates this asset class has become more resilient,” they wrote.
📺 Netflix earnings
Netflix reports tonight and Wall Street’s feeling optimistic. The stock has outperformed Big Tech all year, and bulls say it’s one of the few names with real tariff immunity. Add in a still-growing ad biz and consumer habits that hold up in downturns, and you’ve got two big price targets: $1,150 from Oppenheimer, $1,175 from BofA. But it’ll need a clean earnings beat to keep the magic going.
Powell sticks to the script and markets don’t love it
The Fed’s had its hands full these past few years: pandemic chaos, stubborn inflation, and now a full-blown trade war brewing. So when Jerome Powell spoke yesterday, Wall Street listened extra closely… and didn’t like what it heard.
🤷 Still waiting for clarity
Despite the headlines, Powell didn’t really break new ground. He echoed what other Fed officials have been saying for weeks: the fallout from Trump’s trade moves could be larger than anticipated, but the details are still too murky for a decisive policy shift.
He flagged two trouble spots: crumbling consumer sentiment and a preemptive surge in imports before tariffs bite. Both could dampen growth while pushing inflation higher.
That’s a double whammy for the Fed’s dual mandate. “We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,” Powell warned.
📉 Rate cuts on hold
Markets are still pricing in rate cuts starting in June that would add up to a full point by year-end, but Powell made clear the Fed won’t act without “greater clarity.”
Translation: no cuts for now.
Tom Graff at Facet summed it up: “The Fed can’t act proactively… they simply can’t cut rates while inflation is on the rise. Especially when it’s already high.”
The market’s response was immediate. Stocks plummeted after Powell spoke with traders clearly craving more reassurance than the Fed was willing to give.
‘Soft data,’ ‘bimodal guidance’: Wall Street's new glossary
Markets have always been influenced by a bevy of esoteric buzzwords, but the Trump administration is playing a wild card that has even seasoned economists scratching their heads.
We recently covered the growing trend of CEOs skipping forward guidance heading into a turbulent second quarter, but that’s not the only way things are getting harder to navigate.
A crop of ominous terms like “death cross” and “stagflation” has returned to market chatter. Analysts are also leaning on a few lesser-known phrases as they try to make sense of what’s next.
Here are a couple of the most notable.
🍳Hard vs. soft data
Economists are searching for clues wherever they can find them — and that means leaning even harder on both “hard data” (things like jobs, GDP, and inflation) and “soft data” (consumer sentiment and business confidence).
Right now, it’s the soft data flashing warning signs. As Bernicke Wealth Management put it: “Hard data provides a factual basis for analysis, while soft data offers valuable insight into the sentiment surrounding the economy.”
By assessing both types in tandem, we can make more informed decisions,” he added.
🧭 Bimodal guidance
For companies still issuing guidance, there’s a new trend called “bimodal forecasts". That means offering two potential outcomes: one assuming economic stability, and one assuming recession.
United Airlines recently took this route, saying “a single consensus no longer exists, and therefore the company’s expectation has become bimodal either the U.S. economy will remain weaker but stable, or the U.S. may enter into a recession.”
But sometimes, plain talk still cuts through the noise.
Fitch Ratings, for example, didn’t sugarcoat its latest global growth outlook. If its below-2% forecast holds, it would mark the slowest expansion since 2009 excluding Covid,.
Will Nvidia lose ground to Huawei and other domestic chipmakers in China?
Nvidia is once again at the center of the U.S.-China trade storm and it shows. The stock dropped nearly 7% Wednesday, dragging down other Big Tech names and underscoring just how sensitive the Magnificent 7 are to policy.
📉 The story behind the slide
The selloff started after hours Tuesday, when Nvidia revealed that the U.S. government now requires a special export license for its H20 chip, effectively banning it from being sold in China.
The H20 was custom-designed to comply with Biden-era rules, which makes this reversal all the more jarring. Nvidia estimates the change will cost $5.5 billion next quarter.
But Jefferies analyst Blayne Curtis says the real number could be closer to $10 billion, since many unsold chips are already in production.
Analysts were blunt in their reaction.
“Banning the H20 makes little sense to us,” wrote Stacy Rasgon at Bernstein. “H20 performance is low, well below already-available Chinese alternatives; a ban essentially just hands the Chinese AI market over to Huawei.”
Raymond James’ Ed Mills called it “especially surprising” given the chip was previously approved by the Biden administration and recent media reports suggested a pullback from stricter bans.
🔮 Where things go from here
Major players like Tencent Holdings and ByteDance are expected to turn to domestic chipmakers and analysts warn they may not return to Nvidia even if restrictions are rolled back later.
“By restricting the H20 system, U.S. regulators are effectively pushing Nvidia’s Chinese customers toward Huawei’s AI chips,” said Nori Chiou, investment director at White Oak Capital Partners.
Others are more upbeat about Nvidia’s long-term outlook. Ed Mills noted that the damage could be mitigated if the U.S. walks back separate country caps on chip sales, currently set to take effect on May 15.
Still, the so-called “relief rally” — where Big Tech jumped on hopes of a trade breakthrough — has fizzled. Citi’s Atif Malik, who coined the term, says the trade chill is back. Even so, he’s sticking with a buy rating on Nvidia.
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