Market Insights - Tariff Relief Rally

Market Commentary – April 10, 2025

The Lows Are In, But Volatility To Continue

On April 9th, President Trump suspended his “Liberation Day” tariffs for 90 days, while still imposing a flat tariff of 10%, except for China. There are also no tariffs right now on semiconductors, which benefits many companies, especially technology related ones. For China, Trump raised the tariff level again to 125%, effective immediately. The equity market surged on this news, having the best single-day rally since 2008. The equity market was extremely oversold, as we wrote in this week’s Week Ahead and has rallied sharply, showing just how oversold it was.

We have more certainty now but there are still clouds with the risk of tariffs after 90 days. With this change in tariffs, we feel confident the low is set on the S&P 500 at 4835. But lows often get tested, so we still expect continued volatility. It can take time to test the lows, which can take weeks to several months. We believe you can now buy on pullbacks. For investors who can take risk, we maintain Technology and Tech-related remain market leaders. For more cautious investors, we would be more defensive with the Utility and Consumer Staple sectors, and we like Gold on pullbacks. We also like Treasuries here for ballast in the portfolio as we expect interest rates to be biased to the downside.