Trump's tariffs "choke" the market's throat, U.S. stocks stage a thrilling "roller coaster" market

According to Zhitong Finance APP, the U.S. stock market experienced a turbulent day. The S&P 500 index rose by as much as 4% in early trading on Tuesday, marking its largest gain since 2022, due to signs that U.S. President Donald Trump was willing to negotiate a trade agreement. However, the index closed down 1.6% after the White House announced it would continue to impose tariffs on China. The market's fear gauge, the VIX index, rebounded after a decline, closing at its highest level since the outbreak of the pandemic. In terms of U.S. Treasury bonds, the yield on the 30-year U.S. Treasury bond surged in the final moments of trading, marking the largest two-day increase in five years, due to concerns from overseas investors triggered by a weak bond auction. In the foreign exchange market, speculators rushed to buy yen and Swiss francs, both of which are considered safe-haven currencies during times of crisis. Andrea DiCenso, co-portfolio manager of the Alpha Strategy team at Loomis, Sayles & Company, stated, "The road ahead will only become more unclear. We are all subject to one person's decisions." The threat of a trade war has led to sharp fluctuations in the U.S. stock market. Since Trump's tariff plan upended the global growth outlook in just a few days, the market has been hit by sell-offs and turmoil. Matt Miskin, co-chief investment strategist at Manulife John Hancock Investments, said, "When volatility is so high, liquidity dries up, and things often move in illogical ways." Despite optimistic sentiments sparked by comments from U.S. Treasury Secretary Scott Basset and Trump suggesting that tariffs might be reduced through negotiations, there is no doubt that Trump's chaotic policies will disrupt supply chains, create uncertainty for businesses, and trigger consumer anxiety, leading to economic losses. As concerns about a recession grow, the market continues to send warning signals. Oil prices resumed their decline on Tuesday, falling to nearly $58 per barrel. With U.S. Treasuries failing to serve their safe-haven purpose, the financial environment has generally tightened. The yield on the 10-year U.S. Treasury bond rose to nearly 4.3%, higher than levels at the end of March, increasing the costs of mortgages and other types of loans. The yield on the 30-year U.S. Treasury bond closed at 4.76%, nearly half a percentage point higher than Monday's low. If a slowdown in economic activity leads to a decline in tax revenues, and tariffs potentially trigger another inflation shock and exacerbate the deficit, the upward pressure on U.S. government borrowing costs may continue. Jean Boivin, head of BlackRock Investment Institute, stated, "The new round of tariffs in the U.S. and the responses from other countries further indicate that we will be in a world where interest rates and long-term bond yields are higher than pre-pandemic levels." Concerns over the new round of U.S. tariffs triggered another sharp reversal in the market later on Tuesday, as Trump showed little willingness to compromise. Despite negotiating with major U.S. allies in the final hours before the full implementation of tariffs, he insisted on imposing a 104% tariff on many Chinese goods, significantly escalating the risks Que Nguyen, Chief Investment Officer of Stock Strategies at Research Affiliates, stated: "Currently, there is a game of chicken between the market and the government."