- President Donald Trump’s announcement Last week, “mutual mutual tariffs” caught investors, but the news of negotiations and a misconception about a 90-day pause may give traders some hope. Meanwhile, hedge fund may have supported stock prices when they covered their short positions.
Markets play like this 2020, again as investors proceed coun With President Donald Trump’s sweeping “mutual tariffs“As a result of the most volatile session, Wall Street after the start of the Covid-19 pandemic.
Initially, the shares fell back on Monday before some great technological names led to a recovery measurement. S&P 500 plunged into bear market Area to start the day, declining by 20% from the average February index before delete most of these losses to close 0.23% to the session. Technological heavy Nasdaq Composite followed a similar picture, ending with 0.1% strengthening while Chain Jones fell about 350 points after last week with losses to the back of 1500 points and more for the first time in its history.
Markets just weren’t prepared for protectionist measures On Wednesday, Trump presented a White House in the pink garden, said Jay Hatfield, CEO of infrastructure advisers. Saturday came into force 10%, but most imports are taxed much higher when these goods come from countries that have a trade deficit from the United States
“What we call the” death schedule “was quite unexpected,” said Hatfield, who runs ETFs and a number of hedge fund.
However, Hatfield noted that the shares did not make a straightforward Monday when the administration officials said more than 50 countries called on the White House to agree, even if the pause reports were paused False. When the S&P rose below 5,000, a little over a month after increased above 6100, it caused a natural level of support for the index, he said.
“We start finding the bottom,” Hatfield said. “But this does not mean that the bottom is 4800 or 4600”.
Ironically, stock prices could also get an incentive because uncertainty remains high. A Cboe The volatility index, or VIX, briefly moved above 50 times during the session. People are known as Wall -Strit “The sensor of fear“The index stems from the S&P 500 options and feels its highest sustainable spike after the pandemic.
Hatfield said these enhanced signals from the volatility hedge -faces that have provided them with good hedge, buying supplies, or contracts that give investors the right to sell the main asset – in this case the S&P 500 futures contracts – a pre -defined price.
The exercise of these options is profitable when the index value drops below the “strike price”. However, when the volatility is high, traders have an incentive to relax on these positions to ensure that they make money before stocks may bounce.
“This is actually one good thing in hedge funds,” Hatfield said. “These are those who are engaged in buying that makes the market stabilize.”
For example, a small hedge -fond Hatfield loaded on the S&P 500, which put on Friday morning before eliminating them on Monday what it could do because its long index was limited.
“If you never cover your shorts,” he said, “you never make money.”
Rally of stock but Apple and Nike fall
The tariff uncertainty created several winners and lost on Monday. Popular shares of chips rallied, with stock Bull Market Darlings Nvidia and Broadcom Jumping 3.5% and 5.4% respectively. Amazon and Meta He also helped to lead the path for technological giants in America, and both promotions rose more than 2%.
But The dollar of the tree One of the largest winners on the day surpassed all these companies. About half of the product products with discounts will be subject to tariffs, Citi analysts note, but the shares have grown by 8%, as they suggested that the company could increase prices without much appeal from consumers.
For other basic names, however, Monday suggested a small respite. Apple’s stock is shed Almost a fifth of their cost from Wednesday, and shares are reduced by 3.7% per session. The iPhone manufacturer greatly relies on China, which suffered 54% tariff 50% duty Trying if Beijing does not withdraw his own fees.
This is a similar story for Nike, which produces most of its clothing in India and other Southeast Asian countries, which have also suffered from heavy tariffs. Shares StellantisFord and other automakers also continued to decline as industry fighting With 25% tariff on all foreign cars and parts.
However, investors did not necessarily flow into all kinds of assets of a safe shelter. The Treasury, sold when the 10-year yield increased by 20 basic points to 4.20%, and the price of gold has also decreased.
Originally this story was presented on Fortune.com
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2025-04-07 21:52:00
Greg McKenna
