‘Tariffs Off’ Reversal Madness

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Thursday, April 10.

State of Play

Stocks staged a major rally yesterday after President Trump announced a 90-day pause on reciprocal tariffs. When we say major rally, we mean major. We’re talking 9.5% for the S&P 500, its biggest one-day gain since 2008 and third-best day since World War II. The Nasdaq rallied even more, up 12%!

As we eye our board of indicators for signs of direction at 0630, a mixed bag awaits:

• Stock index futures are dropping again. Pretty significantly, in fact. Small caps are leading the drop, with the Russell 2000 down 2.2%. S&P 500 and Nasdaq are down 1.4% and 1.7%, respectively;

• Cryptos are rallying, with Bitcoin up 6% to around $82,000, its highest level of the week;

• Bonds are also rallying again. The 10-year yield is down 10 basis points to 4.30% (yields move inversely to prices), apparently all due to the tariff reversal. So much for China dumping all its Treasuries. Or maybe they’re buying them back again?

• Commodities are mixed. WTI crude oil is down 2.5% to trade below $61/barrel — still a lot higher than it was yesterday over reports China has slowed its purchases of US oil — as copper is up 4%. Gold and silver continue to rally as well, both up over 1.5%;

Cover art by author via Flux_pro_1.1 AI