Bottomed Out?
Did today's 90-day tariff pause news lock in the bottom for stocks? Detailed analysis below...
The US Stock Market staged a historic rally today with the S&P 500 finishing +9.52%, its best day since Oct 2008. The Nasdaq added > $2T in market cap, finishing the day +12%.
Today marked the highest volume day on record, eclipsing 30B total shares traded and breaking Monday’s record of 29B (which broke Friday’s record). The top 3 highest volume days in stock market history have all come within the last 4 trading days.
The big news: President Trump paused the higher reciprocal tariff rates for 90 days on all countries aside from China (the cumulative tariff on China is being increased to 125%, effective immediately). The 10% blanket tariff remains in effect for everyone.
This is exactly what Bulls have been hoping for. On Monday, rumors of a 90 day tariff pause (turned out to be fake news at the time) ignited a massive market rally and reversal off Monday’s big gap down. While the headline ended up being a couple days premature, it offered a preview of the type of squeeze positive trade news could unleash. At the time, I wrote:
“Following the “90 day pause” fake headline yesterday morning, we saw a flurry of short covering in Macro products (Index + ETFs), a possible sign of how squeezy things could get if we ever start to get some real positive headlines. At one point yesterday, ETFs were 42% of the tape (finished 39%) vs the YTD avg of 28%.”