Good morning. After a wild few weeks of market swings, Tuesday’s session saw calmer trading as investors digested a fresh round of earnings and awaited clarity on tariff policies. While volatility has eased slightly, sentiment remains fragile, with a Bank of America survey showing investor bearishness near 25-year highs and recession odds climbing.

Meanwhile, President Trump’s shifting stance on tariffs—pausing some, reaffirming others—has left markets guessing. U.S. and EU trade talks yielded little progress, while China hit back by suspending Boeing aircraft orders. Treasury yields slipped and the dollar stabilized after last week’s dramatic moves. In the background, investors are also watching the Supreme Court, where a pending case could redefine the Fed’s independence.

We continue to expect headline-driven volatility as markets navigate earnings, geopolitics, and policy uncertainty.

American Firms in China Under Pressure
The Economist reports that Chinese authorities are turning up the heat on U.S. companies operating in China, including new restrictions and inspections. The moves appear to be direct retaliation for the Trump administration’s latest tariff hikes.
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What the Weak Dollar Means for the World
The WSJ explores how the dollar’s recent slide—its steepest in years—is rippling through global markets. A weaker dollar eases some debt burdens abroad but raises fears about U.S. stability and the greenback’s safe-haven status.
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Supreme Court Case Could Threaten Fed’s Independence
The WSJ warns that a looming Supreme Court decision could curb the Fed’s authority, particularly around emergency lending. Markets are watching closely, as any ruling that weakens the Fed could upend financial stability.
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Strategist Warns of a Lost Decade for U.S. Stocks
MarketWatch highlights a bearish call from a top strategist predicting flat returns for the next 10 years—even without a recession. Elevated valuations, slower growth, and policy risk are cited as key reasons.
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Rising Real Yields Reflect Tariff Concerns
Real yields on Treasury bonds have climbed in recent weeks, according to MarketWatch, a sign that investors expect prolonged economic disruption from tariffs. Higher real yields also challenge equity valuations.
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Tariff Fears Fuel Auto Buying as Supplies Fall
CNBC reports that U.S. vehicle inventories have dropped sharply as consumers rush to beat expected price hikes from auto tariffs. Dealers are bracing for continued supply chain issues.
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China Targets U.S. Tech With Export Restrictions
Bloomberg reveals that China has curbed the sale of key tech components to Nvidia suppliers in retaliation for U.S. tariffs. The move triggered a selloff in several major chip stocks.
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Stocks finished little changed on Tuesday as recent tariff volatility gave way to a quieter session. The S&P 500 held above the 5,400 level for most of the day before slipping into modest losses. Gold remains near record highs while Treasury yields eased, with the 10-year dipping to 4.30% intraday. The dollar recovered slightly after a sharp recent drop.

On the trade front, Canada announced temporary six-month tariff relief on U.S. goods tied to manufacturing and auto production, following Trump’s own tentative pause on auto-related tariffs. However, EU-U.S. talks yielded little, with officials signaling that most tariffs will stay. Meanwhile, White House officials said Trump is reviewing up to 15 trade deals, with announcements expected soon.

Investor sentiment continues to run pessimistic. BofA’s latest Global Fund Manager Survey shows recession expectations at a 20-year high, and net 82% of respondents expect the global economy to weaken. That aligns with recent data showing the S&P 500 has now entered its fourth bear market since 2017.

Markets are facing a complex brew of risk: tariff fatigue, Fed uncertainty, bearish sentiment, and valuation resets. While earnings and data may offer relief in the near term, investors should be prepared for continued volatility. But with the worst of the tariff panic possibly behind us and valuations more reasonable, selective opportunities may be emerging.