Bond Yield Curve Steepens on Mixed Data, Treasury Refunding Plan

Bond

Summary:

The bond yield curve steepened as mixed U.S. economic data and steady Treasury issuance disappointed investors. Long-term yields rose on stagflation fears, while Fed rate cut bets increased amid slowing growth.

Long-term government bonds underperformed Wednesday as mixed economic data muddled the path for the Federal Reserve while the Treasury Department’s unchanged guidance on debt issuance disappointed some investors who had expected more support for longer-maturity bonds.

Yields on 30-year bonds rose 3 basis points to 4.68%, while those on two-year rates declined 2 basis points to 3.62%, following weaker-than-expected GDP data, stronger-than-forecast consumption and higher-than-estimated prices. The Treasury maintained its guidance on keeping the issuance of longer-dated securities unchanged for at least “several quarters” while flagging it could potentially enhance its buyback program.

“The overall takeaway to me is stagflation concerns are validated even before many tariffs come into effect,” Zachary Griffiths, head of US investment grade and macro strategy at CreditSights. “I think you’re seeing that in the market reaction with the curve bear steepening now.”

The 10-year yield jumped as much as five basis points to 4.23% after the data and Treasury’s quarterly refunding announcement, then pared the move.

The Treasury in a statement said it plans to sell $125 billion of securities at next week’s so-called quarterly refunding auctions, which span 3-, 10- and 30-year maturities. It also reiterated guidance that’s been in place since January 2024, according to which it expects to keep auction sizes steady for the next several quarters.

While the guidance was in line with most investors’ expectations, some market watchers had anticipated that Treasury officials could take a more aggressive stance to soothe the markets’ supply concerns. Citigroup’s strategists, for example, last week said that the curve may steepen if buybacks are not increased.

“Although guidance was unchanged, the long-end reaction suggests more was expected from Treasury,” Wells Fargo’s strategists Angelo Manolatos and William Gibbons wrote in a note. “Some market participants likely expected increased liquidity support buybacks and/or a discussion about a shorter weighted average maturity.”

The underperformance of long bonds widened the yield gap between five- and 30-year yields 4 basis points to 92 basis points. The curve has steepened about 30 basis points in April. The so-called curve steepening has been a popular theme in the bond market as traders expect that the slowing economy would eventually lead the Fed to cut borrowing costs, while inflation and bond supply would keep long-end yields elevated.

Wednesday’s data showed the US economy contracted at the start of the year for the first time since 2022 amid a monumental pre-tariffs import surge and softer consumer spending. The GDP report also highlighted that a closely watched measure of underlying inflation accelerated to a 3.5% pace in the first quarter — the most in a year.

“The upside in consumption is the main market driver here followed by the stronger price index,” said Jordan Rochester, head of macro strategy for EMEA at Mizuho International Plc. “GDP today says that is not the current problem to worry about. Instead it’s higher prices and huge import accumulation.”

April was a highly volatile month in the $29 trillion Treasury market as investors gamed out the impact of President Donald Trump’s tariffs on inflation and economic output. This month’s trading range for the US 10-year government bond was the widest since the collapse of SVB in early 2023.

A key Bloomberg gauge of the Treasury markets was up 0.6% in April, the fourth monthly advance and the longest winning streak since last September.

In recent days, the market has rallied amid signs that the US economy is stumbling. That fueled bets on further interest-rate cuts from the Federal Reserve, with swaps now implying 96 basis points of easing this year, which means four quarter-point cuts are almost fully priced. That compares to just three at the end of March. At least one big option trader, however, has dialed up an $18 million bet on the potential that the Fed will avoid cutting interest rates at all this year.

The focus turns later this week to the US jobs report on Friday, which is expected to show the economy created 135,000 new positions in April compared to 228,000 in March.

What Bloomberg strategists say...

“The quarterly refunding announcement duly saw unchanged coupon auction sizes and unchanged guidance for steady issuance over the next several quarters. TIPS re-openings were adjusted slightly higher. There was some discussion of enhancing the buyback program, though that seems unlikely to move the needle much given the gaping budget deficit. Given the opacity of the debt ceiling issue, the Treasury declined to issue any guidance on the x-date. All in, this was all largely as expected and should have a minimal impact.”

source : Bloomberg

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Adam

Economic

China–U.S. Trade War

Companies slowed hiring sharply in April as they braced against potential impacts from President Donald Trump’s tariffs against U.S. trading partners, ADP reported Wednesday.

Private sector payrolls rose by just 62,000 for the month, the smallest gain since July 2024, amid heightened uncertainty over the degree of the tariffs and the impact they would have on hiring plans and broader economic conditions.

The total marked a deceleration from the downwardly revised gain of 147,000 in March and missed the Dow Jones consensus estimate for an increase of 120,000.

“Unease is the word of the day. Employers are trying to reconcile policy and consumer uncertainty with a run of mostly positive economic data,” said ADP’s chief economist, Nela Richardson. “It can be difficult to make hiring decisions in such an environment.”

Wage gains also took a step backward, rising 4.5% from a year ago for those staying in their jobs, down 0.1 percentage point from March. However, job changers saw an increase to 6.9%, up 0.2 percentage point.

From a sector standpoint, leisure and hospitality posted the biggest gain, adding 27,000 jobs. Others that showed increases included trade, transportation and utilities (21,000), financial activities (20,000), and construction (16,000). Education and health services lost 23,000 positions while information services fell by 8,000.

The ADP estimate serves as a precursor to Friday’s nonfarm payrolls data from the Bureau of Labor Statistics, and the two reports can differ substantially. Economists surveyed by Dow Jones are looking for job growth of 133,000 in the BLS report, which unlike ADP includes government hiring. The unemployment rate is expected to be unchanged at 4.2%.

Source: cnbc

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Grace Montgomery

Central Bank

Federal Reserve policymakers won't take much signal from a decline in first-quarter U.S. GDP, but by June clearer signs of a faltering economy will move central bankers to resume cutting interest rates, ultimately by a full percentage point by the end of the year, traders bet on Wednesday.

The U.S. economy contracted by an annualized 0.3% last quarter, the Commerce Department's Bureau of Economic Analysis said on Wednesday, as American businesses rushed to buy imported goods ahead of President Donald Trump's barrage of tariffs. Consumer spending downshifted to a 1.8% pace from a 4% pace last quarter.The report contained "clear signs that the economy already was fundamentally slowing" last quarter, economists at Pantheon Macro wrote. "A period of stagnation now likely lies ahead if the current set of tariffs is maintained, with recession the most likely outcome if the additional reciprocal tariffs are imposed in full in July.

Futures contracts that settle to the Fed's policy rate continued to point to a start to Fed rate cuts in June, with a total of four quarter-point reductions likely, bringing the rate to the 3.25%-3.5% range by year-end.

Fed policymakers meet next week and are nearly universally expected to keep rates in their current 4.25%-4.5% range. Central bankers say they expect the tariffs to boost prices and slow the labor market, a difficult mix because the Fed can't fight both problems at the same time.

Source: Kitco

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Economic

The Dollar strengthened and stock markets fell through the midweek session as investors chewed over a soft U.S. GDP report that showed the economy shrank in the first quarter (-0.2% q/q).

This was the first decline in three years, which disappointed a market that expected a flat reading to follow Q4 2024's 0.4% q/q reading.

"Stagflation concerns were bolstered by Wednesday's data showing an unexpected contraction in U.S. GDP during the first quarter along with a surprisingly large jump in core PCE prices," says Paul Spirgel, a Reuters market analyst.

Disappointment was painted on the S&P 500 stock index, which is trading lower on the day alongside other major U.S. bourses.

In 2025, the Dollar and U.S. stocks have tended to fall together, which means the USD advance is a surprise and raises questions as to whether the Dollar is regaining its safe-haven status.

It is too soon to suggest this is the case because it is the final day of the month, and month- and quarter-end flows are likely distorting the market. Investment bank analysts have suggested that USD strength should be expected.

Dollar strength also suggests the U.S. GDP data was not as bad as the headline decline suggests, given there were some significant distortions caused by importers front-running Trump's tariffs.

According to economist Atakan Bakiskan at Berenberg Bank, "the main drag on growth came from a sharp widening in the trade deficit, as businesses frontloaded imports to stay ahead of tariffs."

He says consumption softened only modestly and households increased spending by 1.8% q/q (annualised) after 2.8% growth in 2024, with a stronger tilt towards services, which rose 2.4%, while goods consumption increased by only 0.5%.

In fact, when adjusted for imports and inventories, which do not reflect underlying economic strength due to the frontloading effect, real GDP in the US rose around 2.3% q/q.

"Despite mounting downside pressures on growth, the US economy remains solid for now," says Bakiskan.

The Dollar's advance saw the Pound to Dollar exchange rate retreat further from three year highs at 1.3444. When that high was reached on Tuesday we warned about a strong horizontal resistance level that could deal Sterling a setback.

This layer of resistance has shown its teeth and Pound-Dollar's retreat extends back to 1.3310 at the time of writing.

For now, strategists maintain a 'buy the dip' mentality. Pound-to-Dollar Down as Investors Focus on the Positives in a Dire GDP Release_1

Above: GBPUSD at daily intervals.

"Sterling fell on Wednesday, retreating further from its April 28 high of 1.3445, but a reversion to gains remains possible for GBP/USD as the dollar selloff tied to tariff concerns appears largely intact — albeit paused — as markets await clarity on U.S. trade policy," says Paul Spirgel, a Reuters market analyst.

He explains that with tariff risk still elevated, further dollar weakness seems likely. "The recent dollar bounce may be temporary position adjustment as markets await further developments."

The British Pound has risen 3.20% against the Dollar in April, adding to March's 2.70% gain, boosted by a significant repraisal in the U.S. economy's growth prospects under a punitive tariff regime.

Policy uncertainty and President Donald Trump's disruptive reordering of the global political order have prompted international investors to reduce exposure to U.S. assets, including the Dollar.

"There has been a sharp stop of foreign investor inflow into U.S. bond and equity markets over the last two months. Our broad takeaway is that the flow evidence so far points to an, at best, very rapid slowing in US capital inflows and, at worst, continued active disinvestment from US assets. Either interpretation poses a challenge to the USD as a twin deficit currency," says George Saravelos, Global Head of FX Research at Deutsche Bank.

He warns that a buyers strike of U.S. assets is set to harm the Dollar further. "What matters for the USD is what foreign investors are doing and, so far, based on his analysis the evidence is that they remain on a buyers' strike on US assets."

Source: Poundsterlinglive

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Damon

Economic

Wall Street's main indexes dropped on Wednesday after data showed the economy contracted for the first time in three years in the first quarter, deepening concerns around the impact of U.S. tariffs and the global trade war.

Private payrolls growth also slowed more than expected in April, while the personal consumption expenditure index - the Federal Reserve's preferred inflation gauge - rose slightly more than expected in March on an annual basis.

Wednesday's reports join a series of data releases over the month that have pointed to an increasingly uncertain outlook for the U.S. economy, as the fallout from the Trump administration's steep tariffs and erratic trade policy take effect.

"Given the amount of damage that's been done to businesses (and) consumer confidence, we could just be getting started on seeing a continuation of these weaker numbers," said John Luke Tyner, portfolio manager at Aptus Capital Advisors.

U.S. consumer spending jumped last month as households rushed to buy motor vehicles to avoid higher prices and shortages due to tariffs.

Shows trade effect on GDP

Traders are now pricing in a full percentage point interest rate cut by the end of the year from the Fed.

Caterpillar (CAT.N), opens new tab declined marginally, after gaining premarket following its quarterly results.

At 10:03 a.m. ET, the Dow Jones Industrial Average (.DJI), opens new tab fell 699.90 points, or 1.73%, to 39,827.72, the S&P 500 (.SPX), opens new tab lost 113.47 points, or 2.04%, to 5,447.36 and the Nasdaq Composite (.IXIC), opens new tab lost 449.75 points, or 2.58%, to 17,011.57.

All S&P 500 sectors were in the red, with consumer discretionary (.SPLRCD), opens new tab and information technology (.SPLRCT), opens new tab shares down 3.6% and 2.3%, respectively.

The CBOE Volatility index (.VIX), opens new tab, seen as Wall Street's fear gauge, was up 3.53 points at 27.69, its highest in nearly a week.

"Magnificent Seven" members Meta Platforms (META.O), opens new tab and Microsoft (MSFT.O), opens new tab fell 2% and 3% ahead of their results, due after markets close, that investors are watching closely for clarity on the outlook for the tech sector and AI-focused investments.

Fanning concerns about a pullback in investments into AI, Super Micro Computer (SMCI.O), opens new tab cut its third-quarter forecasts due to delays in customer spending, while Snapchat parent Snap (SNAP.N), opens new tab said it would not provide a second-quarter financial forecast.

Their shares fell more than 16% each.

Wall Street's indexes recouped some ground this month after a sharp slump following the April 2 "Liberation Day" tariff announcements, but are set for monthly declines.

The S&P 500 is set to snap its best winning streak since November if losses hold through close.

Wednesday also marks 100 days since Trump took office. Erratic changes in trade policies and uncertainty have roiled markets over that period, offsetting initial optimism over the administration's business-friendly policies.

"If you were looking for a playbook on how to slow a healthy economy, (policy changes) seem like a good example," said Scott Helfstein, head of investment strategy at Global X.

Among other stocks, Norwegian Cruise Line Holdings (NCLH.N), opens new tab tumbled 10% after missing first-quarter earnings estimates.

Declining issues outnumbered advancers by a 7.61-to-1 ratio on the NYSE and by a 4.77-to-1 ratio on the Nasdaq.

The S&P 500 posted 2 new 52-week highs and 3 new lows while the Nasdaq Composite recorded 14 new highs and 57 new lows.

Reporting by Lisa Mattackal and Purvi Agarwal in Bengaluru; Editing by Devika Syamnath

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Warren Takunda

Economic

China–U.S. Trade War

The U.S. economy shrank at a 0.3% annual pace from January through March, the first drop in three years, as President Donald Trump’s trade wars disrupted business. First-quarter growth was slowed by a surge in imports as companies in the United States tried to bring in foreign goods before Trump imposed massive tariffs.

The January-March drop in gross domestic product — the nation’s output of goods and services — reversed a 2.4% gain in the last three months of 2024. Imports grew at a 41% pace, fastest since 2020, and shaved 5 percentage points off first-quarter growth. Consumer spending also slowed sharply — to 1.8% growth from 4% in October-December last year. Federal government spending plunged 5.1% in the first quarter.

Forecasters surveyed by the data firm FactSet had, on average, expected the economy to eke out 0.8% growth in the first quarter, but many expected GDP to fall.

Financial markets sank on the report. The Dow Jones tumbled 400 points at the opening bell shortly after the GDP numbers were released. The S&P 500 dropped 1.5% and the Nasdaq composite fell 2%.

The surge in imports — fastest since 1972 outside COVID-19 economic disruptions — is likely to reverse in the second quarter, removing a weight on GDP. For that reason, Paul Ashworth of Capital Economics forecasts that April-June growth will rebound to a 2% gain.

Trade deficits reduce GDP. But that’s mainly a matter of mathematics. GDP is supposed to count only what’s produced domestically. So imports — which the government counts as consumer spending in the GDP report when you buy, say, Swiss chocolates — have to be subtracted out to keep them from artificially inflating domestic production.

And other aspects of Wednesday’s GDP report suggested that the economy looked solid at the start of the year.

A category within the GDP data that measures the economy’s underlying strength rose at a healthy 3% annual rate from January through March, up from 2.9% in the fourth quarter of 2024. This category includes consumer spending and private investment but excludes volatile items like exports, inventories and government spending.

Still, many economists say that Trump’s massive import taxes — the erratic way he’s rolled them out — will hurt growth in the second half of the year and that recession risks are rising.

“We think the downturn of the economy will get worse in the second half of this year,’' wrote Carl Weinberg, chief economist at High Frequency Economics. “Corrosive uncertainty and higher taxes — tariffs are a tax on imports — will drag GDP growth back into the red by the end of this year.’'

Wednesday’s report also showed an increase in prices that is likely to worry the Federal Reserve which is still trying to cool inflation after a severe pandemic run-up. The Fed’s favored inflation gauge – the personal consumption expenditures, or PCE, price index – rose at an annual rate of 3.6%, up from 2.4% in the fourth quarter. Excluding volatile food and energy prices, so-called core PC inflation registered 3.5%, compared with 2.6% from October-December. The central bank wants to see inflation at 2%.

The first-quarter GDP numbers “highlight the bind that the Federal Reserve is in,” Ryan Sweet of Oxford Economics wrote in a commentary. The Fed must weigh whether to cut interest rates to support economic growth or leave rates high because of elevated inflation. “The economy was essentially stagnant in the first three months of the year while growth in headline and core inflation accelerated, fanning concerns of stagflation.’’

Trump inherited a solid economy that had grown steadily despite high interest rates imposed by the Fed in 2022 and 2023 to fight inflation. His erratic trade policies — including 145% tariffs on China — have paralyzed businesses and threatened to raise prices and hurt consumers.

Democrats were quick to blame Trump for disrupting several years of solid economic growth. Democratic Sen. Elizabeth Warren of Massachusetts said: “100 days into his presidency, Donald Trump’s red-light, green-light tariffs are shrinking our economy, with businesses stockpiling imports in anticipation of tariff doomsday.″

There is potential evidence emerging that the solid job market, a pillar of the U.S. economy during the pandemic recession, may be weakening.

On Wednesday, payroll provider ADP reported that companies added just 62,000 jobs in April, about half of what was expected, and down from 147,000 in March. That could be a signal that businesses may be taking a more cautious approach to hiring amid uncertainty over tariffs. Still, the ADP figures often diverge from the government’s jobs reports, which arrive Friday.

Employers in the education and health, information technology, and business and professional services industries all cut jobs. Business and professional services include sectors such as engineering, accounting and advertising.

“Unease is the word of the day,” said Nela Richardson, chief economist at ADP. “It can be difficult to make hiring decisions in such an environment.”

Source: AP

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Adam

Stocks

The US stock market just recorded its worst first 100 days of any presidential term since President Gerald Ford assumed office in 1974.

The stock market initially surged higher after President Donald Trump’s reelection in November on expectations for a pro-business boom. Yet 100 days into Trump’s second term, Wall Street has been shaken by historic levels of uncertainty and volatility because of tariffs.

“Given the ongoing uncertainty around US trade policy and the economic outlook more broadly, we suspect the going will get tougher from here,” said Jonas Goltermann, deputy chief markets economist at Capital Economics, in a Monday note.

The stock market has rallied in recent days, with the S&P 500 and Dow posting a six-day winning streak. The Dow on Tuesday closed higher by 300 points or 0.75%. The broader S&P 500 gained 0.58% and the tech-heavy Nasdaq Composite gained 0.55%.

However, the S&P 500 is still down 7.27% since Trump’s inauguration on January 20. The benchmark index has shed $3.66 trillion in market value since Trump was inaugurated, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

Markets extended their gains Tuesday afternoon as Commerce Secretary Howard Lutnick said on CNBC he had a trade deal done, though he declined to name the country.

The S&P 500’s performance so far during Trump’s second term has been the third-worst performance during the first 100 days of any presidential term in US history, following only President Richard Nixon and Ford.

“Policy is overshadowing key fundamentals,” said Terry Sandven, chief equity strategist at US Bank Wealth Management Group. “We could still have some weakness in front of us, but at a minimum, we’ve got volatility until visibility around tariffs starts to improve.”

A whipsawing ride for the stock market

The stock market has been on a rollercoaster this year, whipsawing at the whims of Trump’s back-and-forth decisions on tariff policy.

The S&P 500 hit a record high in February before sliding into correction in March as Trump began to roll out his plan for tariffs. The S&P 500 plummeted in early April after Trump unveiled his so-called “Liberation Day” tariffs, hitting its lowest point of the year on April 8, when it was on the cusp of entering a bear market.

The market has regained some ground since but the S&P 500 is still down 1.94% from where it was before Trump unveiled his “reciprocal” tariffs on April 2.

“I don’t remember a time when a policy was so directly aimed at economic outcomes, where it was received so negatively, universally by the investment community,” said Kelly Bouchillon, senior partner at Sound View Wealth Advisors. “It’s the most uncertainty I think we’ve seen around corporate earnings and growth in sometime, all self-inflicted by the administration.”

The Magnificent Seven tech stocks, which boosted the market to record highs in 2024, have broadly slumped this year. Apple (AAPL) is down 15.66% this year. Nvidia (NVDA) is down 18.8%. Tesla (TSLA) is down 27.7%.

Amazon (AMZN) has tumbled 14.6% this year. The e-commerce giant briefly dropped on Tuesday after a report from Punchbowl News that the e-commerce giant would begin listing how much of an item’s price represents the added cost of tariffs. White House press secretary Karoline Leavitt called the move a “hostile and political act.”

An Amazon spokesperson said in a statement to CNN that the move “was never a consideration for the main Amazon site and nothing has been implemented on any Amazon properties.”

Trump called Amazon founder Jeff Bezos to complain, two senior White House officials told CNN. Trump later said it was a “good call.”

“Jeff Bezos was very nice. He was terrific,” Trump told reporters on Tuesday. “He solved the problem very quickly. Good guy.”

The best performers in the market this year have been have been tobacco and gold, according to CFRA Research. Newmont Corporation (NEM), a gold mining company, is up 42.3% this year. Phillip Morris (PM), the tobacco giant, is up 41.47%.

Meanwhile, AI and tech company Palantir (PLTR) has soared 53.48% this year, making it the best-performing stock in the S&P 500 after gaining about 340% in 2024.

The Nasdaq, which entered a bear market on April 4, is down 11% since Trump’s inauguration. The Dow is down 6.8% since Trump’s inauguration.

US government bonds

While stocks have been volatile, US Treasuries have emerged as a notable loser in Trump’s first 100 days in office.

Typically, when investors sell off stocks in times of uncertainty, they park their cash in US Treasuries, seeking the safety of an asset backed by the full faith and credit of the US government.

Yet as stocks declined around the world in early April, investors abruptly sold off US Treasuries, raising questions about how much they value US government bonds as a haven.

The yield on the 10-year Treasury note has come down to 4.176% since spiking in early April, but the recent volatility has unnerved investors.

“The prospect of foreign investors reducing exposure to US assets amid concerns about the continued predominance of US Treasuries as a safe haven has been at the center of market debate over the last few weeks,” said Vishwanath Tirupattur, a strategist at Morgan Stanley, in a Monday note.

The US dollar

A decline in the dollar this year has sparked debates on Wall Street about the stability and preeminence of US financial markets.

The US dollar index, which measures the dollar’s strength against six foreign currencies, has tumbled more than 8% this year. The dollar index on April 21 hit its lowest level in three years.

After Trump’s election in November, the dollar pushed higher on expectations for economic growth. The swift decline in the dollar has raised questions about investors’ confidence in the United States. The Euro has gained more than 9% against the dollar this year.

“That trend of a weaker currency and money flowing into non-US assets does stand out to me as being maybe something that’s going to be a little bit more persistent going forward,” said Joe Zappia, co-chief investment officer at LVW Advisors.

International stocks

Some winners across Trump’s first 100 days have been stocks overseas, which have been buoyed by investors reconsidering their allocations to US assets.

US markets this year have underperformed markets in Europe, South America and Asia, and the theme of selling American assets has recently captivated some global investors and analysts on Wall Street.

Bank of America’s latest global fund manager survey showed the largest number of global investors on record intending to decrease holdings of US stocks.

Germany’s DAX index is up 12.6% this year. Hong Kong’s Hang Seng index is up 9.7% this year.

The Trump administration’s trade policy has raised concerns about US economic growth and caused global investors to rethink their exposure to the US, Arun Sai, senior multi-asset strategist at Pictet Asset Management, told CNN.

“If you’re a European investor, you will now think twice about allocating strategically to the US,” Sai said. “The S&P 500 is no longer the only game in town.”

Wall Street’s fear gauge

Trump’s trade policy has injected historic levels of volatility into the stock market.

The CBOE Volatility Index, Wall Street’s fear gauge, spiked sharply this year, hitting levels not seen since the onset of the Covid-19 pandemic.

The VIX closed at 52 points on April 8. The VIX has only closed above 50 twice before this month: in March 2020 and during the 2008 financial crisis.

The VIX has declined in recent weeks but is still trading above 20 points, the level associated with heightened volatility.

Gold

Gold has emerged as the champion of Trump’s first 100 days.

The yellow metal has soared about 26% this year, smashing through record highs and briefly surpassing $3,500 a troy ounce.

Investors have flocked to gold as a safe haven given the uncertain outlook of Trump’s tariffs and the US-China trade war. Bullion is historically a haven during times of economic and geopolitical uncertainty.

The most crowded trade in April was gold, according to the Bank of America survey, breaking a two-year streak for the Magnificent Seven tech stocks.