Investors resume flight from US stocks, no respite in sight from tariff chaos
ARTICLE SUMMARY
Market volatility continues amid tariff uncertainty: Wall Street indexes fell significantly on Thursday, reversing the previous day's historic gains when President Trump temporarily lowered some tariffs. The S&P 500 and Nasdaq were down 4.6% and 5.4% respectively on Thursday afternoon, after posting their biggest single-day gains since 2008 and 2001 the day before.
China remains the focal point of trade tensions: While Trump paused tariffs on many trading partners for 90 days, he increased them further on Chinese imports, creating continued uncertainty in the market relationship with one of America's largest trading partners.
Yesterday's rally appears to have been a "short squeeze": As Jim Carroll of Ballast Rock Private Wealth noted, "What we saw yesterday had all the signs of being a short squeeze, the result of people who were offside needing to be onside again being tapped on the shoulders by risk managers, and told hey, it's time to close out those short positions."
Investors face difficult decisions in volatile conditions: Financial advisors are fielding anxious client calls about whether to realize losses or stay invested. As Carroll stated, "This is bonkers. I think a lot of retail clients, talking to their advisors after this latest downturn, are saying, just get me out of the way of this landslide and we can come back later. What they're feeling is an unusual degree of anxiety."
Other notable quotes from Jim Carroll:
"In many ways this is different even than Trump 1.0. and it feels that it could be more serious. We're backing China up against a wall. What's going to happen next? It frightens people."
"We're in for a period of volatility in both directions. That is what happens when things get like this, you get these violent moves in both directions. When the uncertainty is this high, I don't have a clue what will be happening next."