Recession Averted—or just Postponed? 10/04/2025

HOT stories for today

 

US market wrap:
 

• A battered stock market staged a dramatic comeback on Wednesday after President Donald Trump announced a 90-day delay on certain tariffs for most countries — with China remaining the key exception. The S&P 500 surged 9.5%, marking its biggest single-day percentage gain since October 28, 2008. The Dow Jones Industrial Average [DJIA] also soared, while the Nasdaq Composite [COMP] jumped 12.16%, leading the tech-heavy rebound.
• In a social media post Wednesday afternoon, Trump stated that China’s tariff rate would rise to 125% (up from 104%), while other nations would see a temporary baseline rate of 10% for the next 90 days. Despite the rally, analysts caution that market turbulence is likely to continue in the weeks ahead, as Trump’s evolving trade strategy continues to shape investor sentiment.
   

Recession Averted—or just Postponed?

• President Trump’s 90-day delay on new tariffs has eased immediate recession fears, prompting Goldman Sachs to reverse its earlier call for a downturn—though it still assigns a 45% probability of recession this year. The firm now expects the Federal Reserve to cut rates three times by September. While the pause offers relief, economists warn that U.S. tariffs remain at levels unseen since the Great Depression, and uncertainty lingers.
• Some experts believe the delay may be extended indefinitely, resembling Trump’s proposed universal tariff plan. Whether this pause is enough to revive business investment and hiring remains an open question. Markets will now look to the Fed’s June and July meetings for the next major policy signals.

 
Stocks on the move: 
      

• Walmart [WMT] — Shares rose 5% after CFO John Rainey told investors that the company tends to gain market share during times of economic instability, positioning Walmart as a resilient player in uncertain environments.
• Trump Media & Technology Group [DJT] — The stock climbed 8% following a Truth Social post by President Trump, declaring, “THIS IS A GREAT TIME TO BUY!!! DJT.”
• Tesla [TSLA] — The electric vehicle maker, led by Elon Musk, rebounded over 5%, partially reversing a stretch of recent sharp declines.
• Delta Air Lines [DAL] — The airline’s stock jumped more than 7% despite the company withdrawing its 2025 outlook and CEO Ed Bastian citing tariffs as a negative factor impacting bookings.
   

Today’s action

• Asia-Pacific markets mostly advanced on Thursday, tracking Wall Street’s strongest single-day surge since 2008 after President Donald Trump announced a 90-day delay on increased tariffs for all countries except China. Japan’s Nikkei 225 led regional gains, soaring 8.35%, while Mainland China’s CSI 300 edged up 1%. The Hang Seng Index in Hong Kong rose 1.92%, trimming earlier gains, as investors remain cautious over China’s response to new U.S. duties. Washington raised tariffs on Chinese imports to 125%, prompting Beijing to retaliate with an 84% levy on U.S. goods.
• In U.S. premarket trade, S&P 500 futures dipped 0.66%, while Nasdaq-100 futures advanced 1.2%. Dow Jones Industrial Average futures declined by 108 points, or 0.3%. Wednesday’s session saw an extraordinary 30 billion shares traded, the highest single-day volume in nearly two decades, underscoring heightened volatility. Looking ahead, traders are watching key economic data: the March Consumer Price Index (CPI) and weekly jobless claims are due Thursday, followed by the Producer Price Index (PPI) on Friday, both of which could influence the Fed’s next move.

Watchlist: TSLA, AAPL, JPM, NVDA, PLTR, WMT, DJT, KMX

Bitcoin

• Bitcoin [BTC] rallied sharply Wednesday afternoon, jumping over 7% to $82,305, after President Trump announced a 90-day suspension of new tariffs, sparking renewed risk appetite across markets. Other major cryptocurrencies followed suit: Ether [ETH], Dogecoin [DOGE], and XRP [XRP] each surged more than 12%, while Solana [SOL] soared over 14%.
• Crypto-adjacent equities also rallied. MicroStrategy [MSTR], now rebranded as Strategy, soared 23%. Robinhood [HOOD] climbed 24%, and Coinbase [COIN] rose nearly 17%. With few crypto-native catalysts, digital assets have increasingly mirrored equities, as traders track macro signals—particularly tariff headlines from the Trump administration—for directional cues.
  Watchlist: Bitcoin: 74 000-100 000, Ethereum:1500-2600, Solana: 80-150
   

Forex
 

• The Japanese Yen (JPY) extended gains during Thursday’s Asian session, supported by stronger-than-expected Japanese PPI data, which reinforced expectations that the Bank of Japan (BoJ) will maintain its rate-hiking trajectory. Optimism around a potential U.S.–Japan trade agreement, alongside escalating tensions between the U.S. and China, further boosted the safe-haven currency. A slight pullback in the U.S. Dollar (USD) also helped push USD/JPY lower, with the pair slipping toward the mid-146.00s. However, improved global risk sentiment could limit further upside for the JPY.
• Meanwhile, the EUR/USD pair climbed to near 1.0980, driven by renewed Euro strength after Germany’s conservative leader Merz struck a coalition agreement with the center-left Social Democrats, aimed at spurring economic growth and addressing immigration reform. Currency markets now turn their attention to the U.S. CPI inflation report due later Thursday, which could significantly influence near-term direction for both the USD and broader risk sentiment.
  Watchlist: EUR/USD: 1.0700-1.1100, USD/JPY: 144-150
   

Basic Materials

• Gold (XAU/USD) advanced to around $3,080 in early Asian trading Wednesday, gaining support from safe-haven flows as U.S.–China trade tensions intensified. President Trump’s decision to pause new tariffs for all countries except China has helped sustain demand for gold ahead of the closely watched U.S. CPI inflation report, due Thursday.
• Meanwhile, West Texas Intermediate (WTI) crude oil fell to $61.45 during Thursday’s Asian session. The ongoing U.S.–China trade war, coupled with rising fears of a global economic slowdown, has weighed on oil prices. Adding to the bearish pressure, the EIA reported a 2.553 million barrel increase in U.S. crude stockpiles last week, suggesting weaker-than-expected demand.
  Watchlist: GOLD 2600-3100, US Oil: 57.00-70.00

Key Economic Events Today:

EST time

08:30 am: USD CPI, Core CPI
08:30 am: USD Unemployment Claims
09:30 am: USD FOMC Member Logan Speaks
10:00 am: USD FOMC Member Bowman Speaks
10:00 am: USD FOMC Member Schmid Speaks
12:00 pm: USD FOMC Member Goolsbee Speaks
02:00 pm: USD Federal Budget Balance

Earnings

BMO (Before the US Market opens)
KMX            CarMax Inc
BSVN          Bank7 Corp.
LOVE          The Lovesac Comp.
AMC (After the US Market closes): nothing


The TEFS Analyst team wishes you a successful day!