Stock Market Plunge, Fed Policy, and Tariffs: A Bloomberg News Analysis

Market Reaction to Tariffs

• 📉 Stocks dropped 10% in two days following President Trump's announcement of tariffs, raising concerns about a potential global recession.
• 📊 The S&P 500 lost 322 points, the Nasdaq 963 points, and the Dow 2232 points by the end of the trading week.
• 📈 The ten-year Treasury yield settled at 4%, with the two-year yield at 3.67%.

Federal Reserve Stance and Economic Outlook

• ⚠️ Fed Chair Jay Powell stated the Fed is in a good position to handle risks and uncertainties, despite tariffs being significantly larger than expected.
• 🧐 Powell indicated it's too soon to determine the appropriate path for monetary policy, acknowledging much remains unknown about the effects of tariff increases on inflation and growth.
• 📉 Diane Swonk, chief economist at KPMG, adjusted forecasts to a scenario worse than their worst-case, noting that tariffs could lead to a recession.

White House Economic Advisor's Perspective

• 🇺🇸 Stephen Miran, chair of the White House Council of Economic Advisors, believes tariffs are designed to redress trade deficits and could provide revenue for tax relief and encourage investment.
• 🎢 He acknowledged that market volatility is expected following the president's actions.

Business and IPO Impacts

• ⏸️ Nintendo is delaying preorders for the new Switch 2 due to tariffs, though the launch date remains unchanged.
• 🚫 Billions of dollars in acquisitions and initial public offerings (IPOs) are on hold, including those from GM, Klarna, and StubHub.

TikTok and Jobs Report

• ⏳ President Trump extended the deadline for TikTok to divest its U.S. operations by an additional 75 days.
• 📊 The March jobs report showed an upside surprise with 28,000 new jobs, though unemployment rose slightly to 4.2% and average hourly earnings increased less than forecast.
• 💬 Labor Secretary Lori Chavez Dreamer expressed optimism about the job market's strength and its potential for continued growth.