When the Trump post hit on Wednesday that Trump was backing off his plan to increase tariffs at the fastest rate in 100 years, and the S&P 500 soared 7% in eight minutes Wednesday, buy orders were pouring in at such a furious clip across all markets that $SPDR S&P 500(SPY.US) the $570 billion ETF managed by State Street Advisors that tracks the S&P500 was trading at a record 0.9% premium to the ETF’s underlying NAV.
The euphoria didn’t last long. By Thursday morning, stocks were sinking and, more importantly, Treasury yields were soaring even after President Trump said it was their sudden surge that had prompted him to do an abrupt about face and implement his 90-day reprieve on tariffs in the first place. The bond market was buckling, the VIX soared to its highest level since Covid, and the turmoil threatened to continue until the Treasury or Fed stepped in.By Friday, markets had stabilized and the VIX had receded, but this weekend traders were asking themselves what was the lasting damage to consumer and corporate investment spending, and long-term (5-10year) consumer inflationary expectations, which on Friday reached their highest levels in 30 years.
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