If market moves are making you dizzy, you’re not alone.
Early Thursday, the word out of China was that no negotiations on tariffs are actually taking place. That’s a retort to President Donald Trump’s remark that the levies will come down “substantially”—an insight had generated two days of stock gains.
The Wall Street Journal put some numbers on Trump’s thinking, reporting that the levies could drop to as low as 50% from the current 145%. Of course, that would still be a lot higher than they were before the president
started his trade war, and no final decision has been made. If Trump wants a negotiating win as well, The two sides will also need to actually begin talking for levies to end up being lowered.
Anyone reading the news and looking at the balance of their 401K must be thinking here we go again. These swings aren’t normal. This April’s intraday volatility—the average difference between highs and lows in a single trading session—is set to be the highest since March 2020, the start of the Covid-19 panic. It’s the fourth highest since 1979—behind only two months in 2008, during the financial crisis; and October 1987, when Black Monday caused havoc, according to Dow Jones Market Data.
More volatility can mean prices going up as well as down, but
history suggests it’s usually bad. Markets take the stairs up and the elevator down, the old saying goes. The word that almost always accompanies “volatility” is “uncertainty.” The Federal Reserve’s Beige Book shows companies are worried. Talk of recession is back. Airlines are dropping guidance altogether.
it’s important to
remember the end of the turbulence will eventually come and calm will resume. Put emotions to one side, try to stay strategic and think long-term. It’s the best way to avoid market motion sickness.
—Brian Swint
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12 More States Sue Over Trump Tariffs Amid Economic Fears
Twelve more states are suing the Trump administration over what they call its illegal tariffs, asking the U.S. Court of International Trade to halt the levies immediately, as frustration over import taxes and their impact on the economy and businesses grows.
- The group includes Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York, Oregon, and Vermont.
- “The president doesn’t have the power to raise taxes on a whim, but that’s exactly what President Donald Trump has been doing with these tariffs,” said New York Attorney General Letitia James in announcing the multistate suit Wednesday. The White House didn’t respond to a request for comment.
- This is at least the third lawsuit
challenging the administration about sweeping tariffs on imports it announced in early April. California was the first state to file a suit last week on the grounds that the emergency statute invoked by Trump doesn’t apply because there is no emergency.
What’s Next: The Trump administration is considering lowering levies on China in an attempt to de-escalate the trade war, The Wall Street Journal reported Wednesday. Tariffs could be cut by more than half in some cases but a final decision hasn’t been made, according to people familiar with the matter.
—Anita Hamilton and Elsa
Ohlen
Why DOGE Will Live on After Elon Musk’s Departure
Tesla CEO Elon Musk is backing away from the Department of Government Efficiency, but DOGE’s efforts to slash the federal government, including firing thousands of workers and downsizing
agencies like the U.S. Agency for International Development, are too important to the administration’s agenda to fall apart completely.
- Musk’s day-to-day absence will be felt. Sometime in May he’s going to shift to devote just a day or two a week on government matters, a far cry from his current round-the-clock DOGE
presence. Working alongside Musk was a major motivation for DOGE employees to seek the job.
- Republican lawmakers have cited DOGE cost savings as a justification for more tax cuts, but Musk says DOGE will save just $150 billion, down from his previous prediction of $1 trillion. Without Musk, DOGE’s mission could move over to Russell Vought, director of the Office of Management and Budget, said Raymond James policy analyst Ed Mills.
- The administration will seek codification of cost cuts in what is called a rescissions package, MarketWatch reported, citing a goal of cutting $9.3
billion in spending on foreign aid and other programs. The process allows the president to propose budget cuts, giving Congress 45 days to approve them.
- Republicans in Congress plan to pass a bill to extend—and possibly expand—Trump’s 2017 tax cuts from his first term. To proceed on a party-line vote, the president would need to keep practically all GOP lawmakers on board, including the deficit hawks in the House Freedom Caucus.
What’s Next: Treasury Secretary Scott Bessent told a JPMorgan investor event on Tuesday that the bill extending Trump’s 2017 tax cuts could be finished “maybe as soon as the Fourth of July,” a Treasury spokesperson confirmed to Barron’s.
—Joe Light and Janet H. Cho
IBM Sees Opportunities in Automation, AI Amid Uncertainty
International Business Machines beat expectations and reaffirmed its 2025 revenue guidance but acknowledged that near term uncertainty could cause customers to pause their purchasing decisions or take a wait-and-see
approach. One silver lining: automation tools that help customers be more efficient could get a boost.
- First quarter revenue edged up 0.5% from
a year ago, to $14.5 billion and IBM reported adjusted earnings of $1.60 a share. Revenue from its automation business within software rose 14%. Overall, software segment revenue rose 7%, to $6.3 billion. The company sees continued strong demand for generative AI.
- Infrastructure revenue fell 6%, to $2.89 billion. IBM plans to introduce its next-generation mainframe in the coming months, which is built to allow customers to run several operations at once and provide support for artificial intelligence, large-language models, and big data sets.
- For the second quarter, IBM sees revenue of $16.4 billion to $16.75 billion, better than expectations but at the
midpoint about 3% lower than a year earlier. It also sees 2025 revenue growth of at least 5% and free cash flow of $13.5 billion despite a “fluid” macroeconomic environment.
- Separately, chip maker Texas Instruments also beat expectations for the March quarter and told analysts that despite “high uncertainty” in the environment due to tariffs and geopolitics they don’t see a near- term effect on June quarter revenue.
