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Did Nothing for Uncertainty – April 10, 2025

Mike Tierney

Good morning,

Yesterday, under extraordinary pressure from the bond market, President Trump suspended his reciprocal tariffs for 90 days on all countries not named China. That led to a historic surge in the stock market. The epic rally in the S&P 500 Index (SPX) was among the top 10 percentage return days in the nearly century-long price history of the Index.

For orientation following yesterday’s vertigo, the SPX jumped +9.5% to close at 5457. That left the Index down -11% from its highs instead of the -19% maximum drawdown it closed at on Tuesday.

From a technical indicator perspective, yesterday’s surge, as big as it was, did little to mend all the damage caused in the past week. One day is not a trend, even days like yesterday. We’ll need some follow through in order to get more constructive.

Here is my immediate simple-minded concern: the suspension will not help uncertainty, and uncertainty alone can cause a recession. I believe it is going to take a lot more than a suspension to release the current grip the market has on a recession ahead.

Be well,
Mike

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