Good morning. Markets delivered a resounding rebound on Wednesday after the White House announced a 90-day pause on recently imposed tariff hikes, excluding sector-specific tariffs and Chinese imports. The base tariff on all countries was set to fall back to 10%, while China’s rate would rise to 125%, signaling continued friction with Beijing. Investors interpreted this as a temporary de-escalation in trade tensions, sending stocks sharply higher and providing a breather for risk assets.

Tech and consumer discretionary sectors led the way, with all eleven S&P sectors finishing in the green. Meanwhile, Treasury yields continued their recent climb, with the 10-year briefly touching 4.35%, before finishing modestly lower following a strong auction. Ahead today is the key March CPI print, which is unlikely to reflect the impact of the latest tariffs but will nonetheless guide expectations for Federal Reserve policy.

Can China Fight America Alone?
China’s retaliatory tools are extensive but limited without global coordination. Economists argue that Beijing’s leverage is waning in a solo battle, and diplomacy or selective concessions may be inevitable. Read full article →

China’s Strategy Evolves in Trump Trade Fight
With blunt retaliation proving ineffective, China is deploying quieter tactics like red tape, regulatory slowdowns, and patriotic messaging to buffer the economic blow and maintain leverage. Read full article →

Trump’s Tariff Math Excludes Services
A key flaw in Trump’s tariff logic is that it overlooks U.S. service exports, inflating the goods trade deficit and justifying more aggressive tariffs. This framing may misrepresent America’s actual trade position. Read full article →

Oil’s Signal Becomes Murky
Oil prices typically reflect growth expectations, but recent volatility—amplified by the pause in tariffs—has clouded the picture. Supply and demand dynamics remain volatile amid shifting policy winds. Read full article →

EU Pauses Tariff Retaliation
In a rare diplomatic gesture, the European Union will delay countermeasures for 90 days. The move is meant to open the door for talks and avoid deeper escalation. Read full article →

Bond Market Turmoil Preceded Tariff Pause
Trump’s reversal on tariffs followed sharp moves in bond markets and behind-the-scenes pressure from Wall Street. Treasury yields spiked and banks lobbied heavily for a more measured approach. Read full article →

Equity markets staged a powerful rebound on Wednesday as news broke that the U.S. would pause new tariff rates on all countries—excluding China—for 90 days. The base rate on most countries will reset to 10%, while China’s tariffs will climb to 125% due to its continued retaliatory measures. Sector-specific tariffs, such as those on autos and metals, remain unchanged. The announcement sparked a surge in investor optimism, with the Nasdaq jumping 12%, the S&P 500 gaining 10%, and the Dow finishing higher by nearly 1,000 points. Treasury yields also moved higher, though they remained below this week’s peaks. The 10-year U.S. Treasury yield rose to 4.35%, while the 10-year auction showed strong demand.

Despite the market’s rally, the volatility index (VIX) remains elevated above 50. Historically, sharp spikes in the VIX have been followed by above-average 12-month returns in equities, often around 20%. While near-term uncertainty remains high, the relief rally suggests markets may be pricing in a path to de-escalation. With the S&P 500 down nearly 20% from its February high, many investors are watching for confirmation that the worst of the policy-driven drawdown has passed.

Wednesday's rally was a stark reminder of how headline-driven this market has become. While a 90-day pause offers short-term relief, it’s not yet a resolution.