From Liberation Day To Capitulation Day

2025-04-03 12:14:18 ET

Summary

• The newly imposed tariffs by the Trump administration are higher than expected, causing significant market volatility and a sharp selloff in the S&P 500.
• The U.S. aims to equalize global trade by imposing reciprocal tariffs, which could lead to better trade negotiations and fairer trade practices.
• Retaliation by the EU and China could harm their economies more than the U.S., making diplomatic negotiations a more favorable approach.
• Despite near-term turbulence, I remain optimistic about Q2 and H2 due to potential tax cuts, deregulation, fiscal stimulus, and rate cuts.

Recently, I wrote about the coming of Liberation Day , and that it could lead to more near term volatility, potentially culminating in a panic-driven, capitulation-style bottom in the stock market.

SPX 5-Day Chart

Well, we witnessed about a 5% post-tariff announcement selloff in the S&P 500 "SPX" ( SP500 ). The SPX first jumped to about 5,780-5,800 resistance but began dropping sharply after only about ten minutes, cascading all the way down to the crucial 5,550-5,480 support zone....

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