On Wednesday, the US stock market faced a volatile trading session. It initially declined but rebounded later after Trump announced the imminent implementation of comprehensive tariff measures, eventually closing higher. The market fluctuations were mainly driven by investors' focus on Trump's tariff policies, particularly the specifics of their implementation and the potential impact on the global economy, inflation, and corporate earnings.
Recently, due to increased predictions and uncertainty about tariffs, the US stock market has continued to fluctuate. The CBOE Volatility Index (often referred to as the "fear index") has remained near mid-March levels for several consecutive trading days. This indicates the market is still in a highly vigilant state, with investors concerned that Trump's tariff policies might pose a greater shock to the global economy.
Whether Trump will impose a general 20% tariff has become a focal point for the market. Investors are closely awaiting more details about the specific tariffs. Reportedly, Trump is considering implementing this general tariff measure on more products, further exacerbating market uncertainty.
During this period, the stock market's performance is closely tied to Trump's remarks. Christopher Wolfe, Chief Investment Officer at Pennington Partners & Co, stated that Trump's speeches and policies will significantly influence the market's direction, particularly regarding shifts in economic policy. The market's reaction will depend on whether Trump's tariff statements lead to policy changes or take a more random, capricious approach, which could negatively impact the stock market.
Despite market volatility, technology stocks performed strongly on Wednesday, becoming the main support for the index's rise. Tesla shares rose 5.3% after the White House confirmed that Tesla CEO Musk would remain, alleviating concerns about his potential departure. Additionally, the consumer discretionary sector rose 2%, becoming the best-performing sector in the S&P 500. Other tech giants like Amazon also climbed by 2%.
From an economic data perspective, US private employment growth accelerated, with strong private employment performance in March, indicating that companies accelerated purchasing and hiring before the tariffs took effect. Moreover, US new orders for durable goods grew steadily in February, further supporting the economic growth outlook. This series of data gives investors some confidence in the US economy.
The future market focus will shift to the upcoming monthly non-farm employment data and speeches by Federal Reserve Chairman Powell to assess the health of the US economy and the future path of interest rates. Although the market faces significant volatility risks due to tariff policy uncertainties, investors remain highly attentive to future economic data and policy directions.
