- The Nasdaq rebounded in April, posting gains after being dubbed the “worst April since the Great Depression,” with Tom Lee of Fundstrat endorsing Treasury Secretary Scott Bessent’s observation of this underreported recovery, attributing it to a “White House put” from tariff policy adjustments.
- President Trump’s 145% tariffs on China, announced April 2, fueled volatility, but a 90-day tariff pause on most trading partners and exemptions for tech products like semiconductors supported the Nasdaq’s tech-driven rally, closing at 17,382.94 with a 1.26% gain on April 25.
- Institutions like Goldman Sachs, JPMorgan Chase, and the IMF warn of recession risks, citing potential 15% tariff rate increases, a 2% CPI rise, and eroded global trust, though markets remain optimistic amid GDP contraction fears and a 50.8 consumer sentiment index.
The Nasdaq’s dramatic recovery in April has captivated market observers, overturning earlier narratives of a catastrophic decline and highlighting the complex interplay of policy uncertainty and investor resilience. Initially labeled the “worst April for the stock market since the Great Depression,” the Nasdaq (^IXIC) has defied expectations by posting gains for the month, a turnaround endorsed by Tom Lee, Head of Research at Fundstrat Global Advisors. Lee amplified Treasury Secretary Scott Bessent’s observation on X, where Bessent noted the absence of media coverage celebrating this rebound, contrasting it with the alarmist headlines that preceded it. Lee’s agreement, underscored by his remark that the “equity recovery cannot be ignored,” points to a phenomenon he terms a “White House put,” suggesting that government actions, such as tariff policy adjustments, have bolstered market confidence. This resilience stands in stark contrast to dire warnings from analysts like Chris Senyek of Wolfe Research, who projected a potential 37% plunge in the S&P 500 (^GSPC) to 3,700 points from January levels, driven by fears of a tariff-induced recession in 2025.
👀👀👀
👇Agree 💯💯💯💯
Equity recovery cannot be ignored
PS: This is also known as a “White House” put#sundayvibes https://t.co/5rXpcLFYHb
— Thomas (Tom) Lee (not drummer) FSInsight.com (@fundstrat) April 27, 2025
President Donald Trump’s tariff policies, particularly the 145% levies on Chinese imports announced on April 2, have been a central driver of market volatility. Despite Trump’s insistence on maintaining these tariffs absent “substantial” concessions from Beijing, the Nasdaq’s recovery reflects investor optimism, possibly fueled by a 90-day tariff pause on most trading partners, excluding China, announced on April 9. This pause, coupled with exemptions for critical tech products like semiconductors, has mitigated some supply chain concerns, supporting tech-heavy indices like the Nasdaq. Several institutions, including Goldman Sachs (GS), JPMorgan Chase (JPM), and the International Monetary Fund (IMF), have flagged recession risks tied to these tariffs. Goldman Sachs, which reduced its recession probability to 45% from 65% after the tariff pause, cites the potential for a 15% increase in overall tariff rates to disrupt supply chains and raise consumer prices. JPMorgan Chase warns that sustained tariffs are likely to exacerbate inflation and slow U.S. economic growth. JPMorgan’s chief U.S. economist, Michael Feroli, has forecast that the U.S. economy could contract under the weight of the tariffs, with the unemployment rate potentially rising to 5.3%. The IMF, while stopping short of predicting a global recession, notes “notable markdowns” in growth forecasts due to trade uncertainty, emphasizing the erosion of trust between nations. These institutions argue that tariffs elevate costs for businesses and consumers, potentially triggering layoffs and reduced investment, though the Nasdaq’s rebound suggests markets are betting on negotiated resolutions or domestic economic strength.
The broader economic context reveals a delicate balance. Consumer sentiment, as measured by the University of Michigan, fell 11% to 50.8 in April, with inflation expectations surging to 6.7%, the highest since 1981. Yet, the Nasdaq’s tech-driven rally, bolstered by firms like Nvidia (NVDA), indicates that investors are prioritizing innovation and potential rate cuts over tariff fears. The S&P 500, down 15% from its peak, remains vulnerable, but the Nasdaq’s 1.26% gain on April 25, closing at 17,382.94, underscores selective optimism. As tariff negotiations with key partners like India, Japan, South Korea, and Australia – with reports suggesting deals could be finalized as early as this week – the market’s ability to sustain its recovery will depend on two critical factors: clearer policy signals and the Federal Reserve’s handling of inflationary pressures
WallStreetPit does not provide investment advice. All rights reserved.
Leave a Reply