MARKET WRAP

Markets didn’t like yesterday’s sweeping tariff announcement, with a gap lower and further weakness into the close. The SPX opened with a -3% decline and shed another -2% beyond that. The near -5% SPX decline today is the largest since 2020. The overall decline from recent highs is now approaching -13%.

For the day, some very large numbers all over, SPX -4.8%, QQQ -5.4% and IWM -6.6%. The 10Y yield declined to 4.05, Oil got wrecked, down -6.9% to 66.75. Even gold was lower by 1.2%. The VIX closed above 30. Tomorrow AM we get the latest Jobs Number. (more on the VIX and tomorrow’s expected moves at the bottom of the email).

• MRKT Call: Carter Worth joins to discuss just how low this correction could go with some historical technical examples.

• RiskReversal Pod: Josh Brown on the importance of a rules-based strategy, the resilience of some sectors, and how his firm is managing client portfolios through volatility.

MRKT MATRIX: April 3, 2025

Today’s Top Stories:

• Dow nosedives 1,600 points, S&P 500 and Nasdaq drop the most since 2020 after Trump's tariff onslaught (CNBC)

• US Emerges as Biggest Loser in Markets From Trump’s Tariff (Bloomberg)

• Economists Slash US Growth, Boost Inflation Forecasts on Tariffs (Bloomberg)

• Traders Bet on More Fed Cuts With 10-Year Yield Headed Toward 4% (Bloomberg)

• Commerce Secretary Lutnick says Trump’s reciprocal tariffs will spur countries to examine their trade policies (CNBC)

• Macron Suggests Retaliation Against U.S. Tech Services For Trump Tariffs (WSJ)

• Nvidia positioned to weather Trump tariffs, chip demand ‘off the charts,’ says Altimeter’s Gerstner (CNBC)

• Two retailers could end up beneficiaries of tariffs, says Citi in upgrade (CNBC)

• DOGE-Related Plans to Cut Jobs Top 280,000 in Challenger Report (Bloomberg)

• Intel, TSMC Tentatively Agree to Form Chipmaking Joint Venture (The Information)

Today’s MRKT Call is Presented by CME Group

Market Crashes on Trump Tariffs

Carter joins the show to cover today’s sell-off and where we may be within a correction historically. Could we fill the gap to 4850 SPX (-21% from highs)? The show delves into potentially tariff immune companies and more:

Analysis: SPX, RUT, META, US10Y, DXY, XLU, T, VZ, TMUS, SPOT, NFLX, AAPL, TJX 

• Your Questions Answered:

  • What’s with the VIX being fairly muted

  • CBW, NEM, or GDX?

  • Are stocks that manufacture outside US but sell in US no touches?

  • Thoughts on WMT and COST, beasts right now?

  • Would you expect a short term relief bounce next week?

Click here to access all of the charts mentioned in today’s MRKT Call.

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Today’s RiskReversal Podcast is Presented by Betterment and RBC

Josh Brown on Trump, Tariffs & Where Investors Go From Here

Dan Nathan is joined by Josh Brown, CEO of Ritholtz Wealth Management, to examine the impact of recent market movements, institutional money, and the evolving economic landscape under the current administration. They delve into the specifics of the stock market downturn, the implications of recent tariffs, and the potential for recession. Josh shares his approach to tactical shifts, the importance of a rules-based strategy, and how his firm is managing client portfolios through volatility. The conversation also touches on the resilience of various market sectors, the challenges of globalization, and the long-term outlook for investors.

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What’s Next?

Why wasn’t the VIX above 30 this morning? A key factor was the relatively stable intraday trading range following the gap-down open. This type of market action allows for a more orderly and liquid environment for those looking for last minute protection. But, things changed into the close as the SPX made new lows, with the VIX closing just above 30.

During this fairly rapid correction, we haven’t seen the kind of panic-driven volatility spike typically seen in environments where liquidity access and hedging become uncertain. With the VIX now with a close above 30 are we near? 

A useful historical comparison is the 23% or so decline in 2022. During that selloff, which lasted nine months from peak to trough, the VIX surpassed 30 multiple times, with the highest reading around 38. These spikes, occurring roughly six times throughout the decline, were often followed by bounces in equities, and sharp contractions in the VIX—sometimes back into the teens.

Historically, VIX spikes above 30 during an otherwise orderly decline tend to coincide with temporary, tradable market bounces, some of which can be quite strong. However, all but the final bounce in 2022 proved to simply be counter-trend moves within the broader decline.

If the market is entering a prolonged downturn of -20% or more (See Carter’s take on how low this could go on today’s MRKT Call), VIX levels can serve as a useful gauge for potential oversold bounces but not necessarily a signal of it being all over. We may be nearing one of those situations, but caution is warranted.

On the flipside, and looking into the future a bit, if we did see a bounce soon and the VIX were to drop back below 20, it could then signal a good opportunity to reduce exposure—that is if the underlying risks that are driving the decline remain unresolved.

Tomorrow morning we get the latest NFP Jobs Number. Options are pricing about a 1.6% move for the day, which suddenly feels like not enough. The one basis for that could be it’s just shy of the intraday moves we saw today following the -3% gap lower.

Expected Moves For Tomorrow:

• SPX 1.6% [ 5310 - 5490 ]

• QQQ 1.8%

• IWM 2.2%

• TLT 1.1%

• USO 1.4%
  

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