President Trump on Wednesday attempted to calm some nerves as his controversial tariff policies continue to shake markets with his sweeping reciprocal duties on some 185 countries now officially in effect.
“BE COOL!,” Trump wrote in a post on his social media platform Truth Social. “Everything is going to work out well. The USA will be bigger and better than ever before!”
Stocks were working to bounce back early Wednesday after a brutal sell-off that’s threatened to send the S&P 500 into bear market territory.
In the Treasury market, the 10-year yield (^TNX) logged its biggest three-day jump since December 2001, raising alarms across Wall Street about further risks lurking in the global financial system.
Despite a US labor market that largely held up in the run-up to Trump’s tariffs, Wall Street remains on edge that shifting trade dynamics could induce a self-inflicted recession.
On Wednesday, China announced retaliatory tariffs of 84% on US imports after the Trump administration delivered on its threat to impose 104% duties on its exports to the US.
In a follow-up post on Truth Social on Wednesday, Trump said the market has created a great opportunity to buy.
Some strategists have argued a dip below 5,000 for the S&P 500 could be a buy signal, with the index coming off one of its worst two-day stretches on record last Thursday and Friday.
“From my conversations with longer-duration investors, it feels like they will start scale buying the S&P 500 at 5,000 and get more aggressive in the mid-4,000s,” Goldman Sachs partner John Flood wrote in a client note on Tuesday.
Others aren’t so sure.
“Ultimately, the catalyst needs to be a change in the tone of rhetoric,” Michael Kantrowitz, chief investment strategist at Piper Sandler, told Yahoo Finance in an interview.
“A lot of historical analogs may or may not be as useful today because of this really unprecedented situation. “
One of the biggest concerns is stagflation, where growth stalls, inflation persists, and unemployment rises.
Risks of that scenario have shown up more firmly in Wall Street’s projections following a string of disappointing data releases, along with the administration’s latest trade shocks and other policy unknowns like recent efforts to cut government jobs from Elon Musk’s Department of Government Efficiency (DOGE).
“While it’s too early to fully understand the economic ramifications of a potential trade war, the tug-of-war between slowing growth and higher inflation will likely continue to add volatility,” LPL Financial said in a research note published on Monday.
