Wall Street Stocks and Bonds Face Hurdles as Trump Administration Suffers Credibility Gap

Barry Adams
10 Apr, 2025
New York City

Stock market indexes on Wall Street traded down amid worries that the Trump administration's trade policy shifts may have done the damage that could be difficult to reverse in the near term. 

The S&P 500 index decreased 1.2%, and the Nasdaq Composite declined 1.8% as investors take a sober view of the rosy projections promoted by the White House advisors. 

The persistent sell-off pushed the 10-year Treasury yields above 4.5% and the 30-year yield closer to 5.0%.

In addition, the Treasury officials signaled that the upcoming treasury bond auctions may not attract enough interest from foreign buyers, as trading partners step up their retaliation to reciprocal tariffs.  

The bond and stock market sell-off and sharp rebuke from leading business leaders forced the U.S. president to announce a pause on tariffs and accept a rare defeat.

Despite the suspension of the reciprocal tariffs for three months, the Trump administration has kept a 10% universal tariff on all imports, with shipments from Mexico and Canada attracting as much as 25% tariffs.

The sharp escalation in tariffs, from 2% to 10%, is a large supply shock to the economy, which will negatively impact consumer spending.

In addition, a sharp increase in total tariffs to 125% on Chinese goods is also going to contribute to inflationary forces. 

In the months ahead, inflation is likely to surge to as high as 6% and could possibly go even higher, as tariffs seep deeper into the economy and price increases in automobiles, food products, and electronic goods take effect on new shipment arrivals. 

Moreover, confidence is deeply shaken in the Trump administration's ability to navigate the economy to a sustainable annual growth of over 2%, as the policy unpredictability adds to market anxieties. 

Bond and stock investors are going to demand deeper discounts because of the chaotic and unpredictable nature of the Trump administration, known as Trump.  

The wild ride in the bond market ahead of the start of the reciprocal tariffs was prompted after the holders of the U.S. Treasury bonds in Japan and China trimmed their holdings. 

 

Commodities, Currencies, Indexes, Yields

The S&P 500 index decreased 2.2% to 5,335.61, the Nasdaq Composite edged down 2.7% to 16,652.85, and the Russell 2000 index was down 2.8% to 1,860.30.

The yield on 2-year Treasury notes edged lower to 3.86%, 10-year Treasury notes decreased to 4.35%, and 30-year Treasury bonds advanced to 4.81%.

WTI crude oil decreased $2.28 to $60.08 a barrel, and natural gas prices edged lower by $0.14 to $3.67 a thermal unit.

Gold increased by $39.34 to 3,125.25 an ounce, and silver edged up by $0.10 to $31.02.

The dollar index, which weighs the US currency against a basket of foreign currencies, decreased by 1.15 to 101.75 and traded at a two-year high.

 

U.S. Movers 

Delta Air Lines declined 4.3% to $44.23 after the company announced better-than-expected quarterly results and pulled its annual outlook amid the weakness in international bookings. 

Costco Wholesale Corp. declined 0.5% to $960.87, and the membership warehouse club operator reported better-than-expected monthly sales.

Sales in March climbed to $25.51 billion from $23.48 billion a year ago, an increase of 8.6%.

Net sales for the first 31 weeks were $158.87 billion, an increase of 8.3% from $146.64 billion a year earlier.

Comparable sales in March rose 6.4%, and in the 31-week period they were up 6.1%, and e-commerce sales were up 16.2% and 16.8%, respectively.

Comparable sales excluding the impacts from changes in gasoline prices and foreign exchange were up 9.1% in March and up 8.3% in the 31 weeks to April 6, while e-commerce sales increased by 17.5% and by 17.7%, respectively.

Constellation Brands declined 2.4% to $178.95 after the company's net income swung to a loss in the fiscal fourth quarter ending in March. 

The distributor of alcoholic beverages said sales increased to $2.31 billion from $2.30 billion, net income swung to a loss of $375.3 million from a profit of $392.4 million, and diluted loss per share was $2.09 compared to a profit of $2.14 a year ago.