Good morning. As we move into the heart of earnings season, markets are navigating between short-term relief and long-term risk. Monday’s rally was sparked by news that smartphones, computers, and semiconductors will be temporarily exempted from U.S. tariffs — a much-needed reprieve for the tech sector. However, the exemptions are narrow and temporary, and broader trade tensions remain firmly in place.

Treasury yields pulled back slightly after last week’s dramatic surge, and the VIX has eased — but volatility remains well above normal. Comments from Fed Governor Waller suggested that monetary policy could respond to sustained tariff pressure, which has helped support sentiment, even as inflation expectations tick higher. Investors are now focused on earnings results from big banks and bellwether corporates as the next major catalyst.

Bank Earnings in Focus Amid Tariff Turmoil
The WSJ explores how Trump’s trade policies are complicating revenue outlooks for major banks. Despite solid Q1 results, analysts warn that tighter lending standards and slowing loan growth may emerge if tariffs continue to pressure business confidence.
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S&P 500 Nears ‘Death Cross’
MarketWatch reports that the S&P 500’s 50-day moving average is approaching its 200-day average — a “death cross” pattern that some view as a bearish technical signal. While not always predictive, the pattern highlights deteriorating short-term momentum.
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Fed’s Waller Opens Door to Rate Cuts
In a CNBC interview, Fed Governor Christopher Waller said the central bank could support a rate cut “soon” if broad tariffs remain in place. He also noted that inflation could remain elevated if tariffs persist, underscoring the policy trade-offs the Fed faces.
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Businesses Challenge Tariffs in Court
U.S. companies filed a lawsuit Monday to block the Trump administration’s new tariffs, arguing that trade deficits do not qualify as a national emergency under current law. The outcome could shape future limits on executive trade authority.
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Treasury Sell-Off Continues
Yields climbed sharply in early trading as investors weighed tariff volatility and inflation risks. Though bond markets later stabilized, Bloomberg notes this is among the most severe sell-offs since 2022.
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China Pressures Boeing Amid Trade Rift
Bloomberg reports that Beijing has instructed airlines to stop taking delivery of Boeing jets as part of its broader response to the U.S. trade stance. The move hits a key U.S. exporter and underscores the economic stakes of the dispute.
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Investors Most Bearish Since 1994
A new Bank of America fund manager survey shows investor sentiment at its lowest level in three decades. BofA attributes the drop to fears over trade policy, high valuations, and global growth slowing.
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Stocks rose Monday as investors welcomed a tariff exemption for consumer electronics, helping ease concerns over escalating U.S.-China trade tensions. While the Nasdaq initially surged, it later gave up much of those gains before recovering into the close. Comments from Fed Governor Waller suggested the Fed could cut rates if tariffs remain elevated, though markets remain wary of long-term inflation implications. Bond yields fell, with the 10-year Treasury closing at 4.36%, down from recent highs. The VIX dropped more than 20% to fall below 30, signaling a moderation in near-term fear. Meanwhile, gold prices pulled back slightly from record highs, and oil edged higher amid mixed supply and demand headlines.

Markets are searching for direction as investors weigh the immediate relief of tariff exemptions against persistent risks of policy missteps, inflation flare-ups, and earnings revisions. With volatility retreating for now, the spotlight shifts to fundamentals.