Concerns over the intensifying trade dispute between Washington and Beijing overshadowed encouraging economic data and progress in US-Europe trade negotiations. On 10 April 2025, Wall Street suffered a sharp decline as mounting concerns over the economic impact of President Donald Trump’s expanding tariff policies unsettled investors. According to reports, the three main US stock indices recorded significant losses, wiping out much of the previous session’s gains. The Dow Jones Industrial Average fell by2.50% closing at 39 593.66. The S&P 500 dropped by 3.46%, to 5 268.05, while the tech-heavy Nasdaq Composite slid by 4.31% to finish at 16 387.31. 
This downturn followed a dramatic rally on 9 April, when the S&P 500 surged 9.50%—its largest oneday percentage gain since October 2008—and the Nasdaq jumped 12.20%, marking its second-biggest daily increase on record. Despite this brief recovery, the S&P 500 remained 7.10% below its level before President Trump’s ‘Liberation Day’ announcement of reciprocal tariffs. Investor unease remained high, with many uncertain about the ultimate outcome of the ongoing tariff disputes. Paul Nolte, a senior wealth adviser at Murphy & Sylvest, in the US, noted that the lack of clarity around the endgame for tariffs kept concerns front and centre for investors.
 Adding to the uncertainty, a report from the US Department of Labor revealed that consumer prices unexpectedly edged lower in March, with core inflation slowing to 2.80% year-on-year, just shy of the US Federal Reserve’s 2% target. The Feds officials offered mixed signals on how trade tensions might influence future monetary policy, with some suggesting that interest rate cuts could resume once trade uncertainties are resolved. 
President Trump’s announcement of a 90-day pause on some tariffs provided only limited relief. The European Union responded by delaying retaliatory tariffs on American goods, as member states worked to secure trade agreements with Washington. However, the trade standoff with China showed no sign of abating, with Beijing vowing to continue its countermeasures if the US did not relent. In addition to tariff worries, some analysts have pointed to mixed corporate earnings and concerns over global growth as contributing factors behind the recent market retreat. 
As trade tensions continue to cast a long shadow over financial markets, the outlook remains fragile, with sentiment largely dependent on any signs of progress — or further deterioration — in USChina relations. Market volatility remained elevated, as reflected by the Chicago Board Options Exchange (CBOE) Volatility Index, which, although off its session high of 40.86, still signalled persistent anxiety among investors. 
Major technology firms within the “Magnificent Seven” group saw their shares fall between 2.30% and 7.30%. Major banks including JPMorgan Chase and Wells Fargo kicked off the first-quarter earnings season, providing key insights into their financial performance amidst ongoing economic uncertainties. The sell-off on 10 April highlighted the market’s ongoing sensitivity to trade policy developments and the broader uncertainty surrounding global economic prospects.

Impact on US CPI versus baseline (% point)

Bottom Line

We still expect tariff news to create uncertainty. The US President is making sweeping decisions affecting many players across the globe and often acts decisively, only to roll-back decisions. This behaviour is adding even more unpredictability to market directionality and we caution against opportunistic investor behaviour. The best course of action is to keep portfolios well-diversified, with little exposure to assets that offer weak margin of safety. 

Macroeconomics in brief