Five things you need to know

• Donald Trump pledged he will still apply tariffs to phones, computers and popular consumer electronics, downplaying a weekend exemption as a procedural step in his overall push to remake US trade.
• Tech stocks are rallying nonetheless, with Apple and Nvidia among notable movers, as investors bet that the industry will use the reprieve to negotiate a better long-term deal. US stock-index futures point to gains at the open and gold hit a fresh record. 
• The dollar weakened for a fifth day after Trump downplayed the tariff exemption. The euro has rallied against the greenback at the fastest pace in a decade and a half, with traders betting on a move to $1.20.
• First-quarter earnings season really ramps up this week, just as Wall Street turns more gloomy on the outlook. Citigroup and Morgan Stanley are both out with reports cutting their estimates for S&P 500 earnings, citing the impact of tariffs.   
• Stock ETFs in China received record inflows as state-backed buyers pulled out all the stops to shield the market against tariffs. The purchases appear to have worked, at least for now — the CSI 300 Index rose for fifth straight session.  

Fundamental shift

A quick glance at the numbers might lead you to believe that nothing scary happened in US markets last week — the S&P 500 rose more than 5%, Treasuries stand where they stood in February, another big slug of money was ponied up by passive investors and Bitcoin ended the week higher.

That masks a fundamental shift that has taken hold among investors, traders and analysts. Serious questions now exist around the wisdom of owning American assets that until recently were the envy of a risk-obsessed world. Markets sank and soared as traders tried to come to grips with those questions. 

Further evidence today: The dollar is weakening to a six-month low on concern that the confusion around the Trump administration’s tariff policy will drive traders away from US assets. And Citigroup is out with a note lowering their view on US equities, saying the case to diversify away from the asset class is strengthening as the trade war undermines economic growth and earnings.

Amid the manic moves, key trading patterns even bear soft echoes with emerging markets. All told, fear is spreading that Trump’s bid to rewrite the terms of global trade risks imperiling America’s privileged status in the financial system.

“You honestly feel like you’re seeing stuff wrong sometimes. You have to check the scaling on your graphs because prices are moving so quickly,” said Charlie McElligott, managing director of cross-asset strategy at Nomura Securities. “It’s just a constant stream of bells and popups on the desks right now. Automated messages like risk limits and risk alerts. It’s maximum overstimulation, maximum dopamine saturation.” —Denitsa Tsekova and Isabelle Lee

On the move

• Apple shares jump 6.2% in premarket trading after the US temporarily exempted phones, computers and chips from so-called reciprocal tariffs. Also gaining: Nvidia (+3.0%), Broadcom (+2.0%), Micron (+5%), Dell (+7.5%), HP Inc. (+6.4%) and  Best Buy (5.9%).

• In Europe, chip stocks rally: ASML (+3.1%), ASMI (+2.1%), BE Semiconductor (+3.8%), while Apple supplier STMicro rises 2.2%.
• Texas Instruments rises 1.6%, set to rebound after slumping 5.8% Friday on concern around China’s new tariffs targeting semiconductor imports. Analysts at Evercore ISI say they are buyers of tariff-related weakness.
• The metals company TMC rises 20%, while rare earths miner MP Materials gains 11% following a report Trump is planning an order to enable the stockpiling of critical metals.
• Goldman Sachs is slated to report before the opening bell. The bank is expected to have benefited from the same trading boost that its peers reported Friday, with volatility driving stock-trading revenue to a record at JPMorgan Chase.  —Subrat Patnaik 

The week ahead

It's a short trading week in many places, and one that many traders will spend wondering what Donald Trump will say and do next on tariffs.

But there are other events for investors to monitor, including policy decisions from the European Central Bank and Bank of Canada as well as multiple speeches by Federal Reserve Chair Jerome Powell and colleagues. Taiwan Semiconductor, Goldman Sachs and Citigroup release earnings. Click here for a full rundown on the week ahead.

Monday: Fed Governor Christopher Waller speaks, as do presidents Patrick Harker and Raphael Bostic. Trial begins in FTC’s antitrust lawsuit over Meta’s acquisitions of Instagram and WhatsApp. Goldman Sachs earnings and quarterly sales from LVMH, which will be an early test of the pain from tariffs.

Tuesday: Fed Governor Lisa Cook speaks. Citigroup, Bank of America, United Airlines and Johnson & Johnson report earnings.

Wednesday: Powell addresses the Economic Club of Chicago, Bank of Canada meets (expected to leave interest rates unchanged). Fed presidents Jeff Schmid and Lorie Logan speak as does Cleveland Fed President Beth Hammack. China releases first-quarter GDP and March activity data. ASML, Heineken, US Bancorp, Travelers, Abbott Laboratories, CSX, Alcoa report earnings.

Thursday: ECB meets (forecast to cut rates) as do its counterparts in South Korea (predicted to stay on hold) and Turkey (seen unchanged). Italian Prime Minister Giorgia Meloni meets to discuss tariffs with Trump, IMF Managing Director Kristalina Georgieva speaks as does Fed Governor Michael Barr. Taiwan Semiconductor, Hermes, L’Oreal, American Express, Blackstone, Charles Schwab, KeyCorp, Netflix, State Street, UnitedHealth sales or earnings.

Friday: San Francisco Fed President Mary Daly speaks. Markets closed in US and Europe for Good Friday.

Harbinger

A knee-jerk reaction to Donald Trump’s 90-day pause on broad tariffs propelled the S&P 500 to a 9.5% surge on Wednesday, one of the biggest gains on record. Ironically, that could be a harbinger of tough times for equity investors.

The S&P 500’s best days in history have usually preceded weaker-than-average returns in the near term.

Following its 15 largest daily gains, the US stock benchmark was higher six months later just 43% of the time, Bloomberg Intelligence data going back to 1928 show. That’s lower than the 67% probability on any given day that the S&P 500 will advance over the subsequent half year.

It was “the mother of all short squeezes,” said Frank Monkam, head of macro trading at Buffalo Bayou Commodities. —Alexandra Semenova

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