Three Major Indices Rebound Over 1% Just a Day After Sharp Drop
U.S. Treasury and Dollar Sell-Offs Subside
IMF: "U.S. Growth Rate for This Year Revised Down from 2.7% to 1.8%"
Concerns Rise Over Economic Slowdown Triggered by Tariff War
Focus on Tesla Earnings and Federal Reserve Officials' Remarks
The three major indices on the New York Stock Exchange rose by around 1.5% in early trading on April 22 (local time). This rebound comes just one day after a sharp decline triggered by President Donald Trump's criticism of Jerome Powell, as bargain hunters returned to the market. The sell-off in U.S. Treasuries has subsided, and the dollar is also strengthening. However, the International Monetary Fund (IMF) has revised down its growth forecasts for both the U.S. and the global economy for this year and next, warning of the aftermath of the tariff war.
As of 9:36 a.m. on the same day in the New York stock market, the blue-chip Dow Jones Industrial Average (Dow) was up 432.81 points (1.13%) from the previous session, standing at 38,603.22. The large-cap S&P 500 index had risen by 54.68 points (1.06%) to 5,212.88, while the tech-heavy Nasdaq index was up 189.48 points (1.19%) at 16,060.38.
By stock, Tesla, which is set to announce its earnings after the close, was up 2.01%. Nvidia had risen 1.24%, Apple was up 1.74%, and Amazon had jumped 1.58%.
The previous day saw a pronounced 'Sell America' phenomenon in the financial markets, with all three major U.S. assets?stocks, Treasuries, and the dollar?falling together. President Trump intensified concerns about the independence of monetary policy by once again pressuring Federal Reserve Chair Jerome Powell to cut interest rates. On his own social media platform, Truth Social, the previous day, he wrote, "In reality, there is no inflation," and warned, "If Mr. Too Late, the major loser, does not cut rates immediately, the economy could slow down." This was his second attack within four days, after mentioning Powell's dismissal on April 17. The move further eroded confidence in the U.S. economy and triggered a sell-off of dollar-denominated assets. Amid heightened recession fears due to mutual tariff hikes, Trump's renewed criticism of Powell plunged the market into extreme anxiety.
Although panic selling subsided as investors began bargain hunting, concerns are mounting over a tariff-induced economic slowdown. In its World Economic Outlook (WEO) report released the same day, the IMF projected global economic growth for this year at 2.8%, a downward revision of 0.5 percentage points from its previous estimate. Next year’s growth was forecast at 3.0%, down 0.3 percentage points. The U.S. growth rate was projected at 1.8% for this year, 0.9 percentage points lower than previously estimated. Next year’s forecast was cut by 0.4 percentage points to 1.7%. President Trump’s tariff war has significantly lowered growth forecasts for both the U.S. and the world.
Larry Tentarelli, founder of Blue Chip Daily Trend Report, said, "Uncertainty about the tariff cycle and the economy is currently very high," adding, "With the added uncertainty surrounding Jerome Powell, overall market volatility is increasing."
As the sell-off in Treasuries has eased, yields are moving lower. The yield on the 30-year U.S. Treasury, which surged the previous day, was down 4 basis points (1bp=0.01 percentage point) at 4.87%. The 10-year Treasury yield, the global bond benchmark, was down 2 basis points at 4.37%. The yield on the 2-year Treasury, which is sensitive to monetary policy, was unchanged at 3.78%.
The dollar is also strengthening. The dollar index, which measures the value of the dollar against six major currencies, was up 0.34% from the previous session at 98.37.
The main events drawing market attention today are Tesla’s earnings announcement and public remarks from Federal Reserve officials. Fed Vice Chair Philip Jefferson, Minneapolis Fed President Neel Kashkari, and Fed Governor Adriana Kugler are all scheduled to speak.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
