Five things you need to know

• The Trump administration pressed forward with plans for tariffs on semiconductor and pharmaceutical imports by initiating probes led by the Commerce Department. China ordered its airlines not to take any further deliveries of Boeing jets as part of the tit-for-tat trade war. 
• Stocks are getting a boost though, after Donald Trump floated a potential pause in auto tariffs, providing further relief to the market after he suspended levies on some consumer electronics.
• Japan is set for talks with the US this week that will test whether Trump is ready to strike trade deals — and whether being a close ally will carry any weight at the negotiating table.
• Citigroup and Bank of America report earnings this morning. Rival investment banks just delivered their best quarter ever for equity trading, and that was before Trump’s trade war made markets even wilder. Johnson & Johnson and United Airlines also report today.
• The International Energy Agency  slashed forecasts for global oil demand this year amid the brewing trade war, and in its first detailed assessment of 2026 predicted a persistent supply surplus.

Respite from the turmoil

Take a breath, everyone. 

Markets are showing signs of stability for the first time in what seems like years (actually, it’s been 13 days since “Liberation Day’’), so here’s a look at where we stand:

• Treasuries rose yesterday after a five-day selloff that sent 10-year yields surging the most in over two decades, and they’re little changed today. Still, the risk premium to hold the 10-year has climbed to the highest in a decade on concern Trump’s unpredictable tariff policy will sap investor confidence in US government bonds.
• The S&P 500 has surged 12% from its intraday low of last week. Tech, industrial and financial shares have gained the most. Still, Bank of America’s latest fund manager survey, out today, shows investor sentiment regarding economic prospects is the most negative in three decades. That pessimism isn’t yet fully reflected in their asset allocation, which could mean more losses for US stocks.
• MSCI’s emerging market stock index is gaining for a fourth straight day and is on the verge of erasing its loss for the year. India became the first major market to fully rebound from the April 2 tariff announcements. Citi on Monday downgraded its view on developing-nation stocks to underweight.
• The dollar is still under pressure, with a Bloomberg index of the greenback headed for a sixth straight drop (although the move is tiny for now). That’s the longest streak of declines in more than a year, and not a great sign for US assets overall.

The bond rebound is particularly reassuring because last week’s rise in yields threatened to deal the economy another hit by pushing up the cost of all kinds of loans. Treasury Secretary Scott Bessent moved to tamp down concerns in a Bloomberg Television interview, saying he has tools to steady the market if needed. He also said there’s no evidence that overseas governments are selling their stockpiles of Treasuries.

Still, investors are on edge for further developments in the trade war.

“We’re not saying the bottoms are in — we’re hopeful they are — but things can flare up at any time,’’  said Adam Phillips, managing director of investments at EP Wealth Advisors. “One press conference or post on X could spark new headwinds. We’re not in the clear yet.” —Phil Serafino, Ye Xie, Bailey Lipschultz and Alexandra Semenova

On the move

• LVMH falls 6.7% in Paris after the luxury group published weaker-than-expected sales, weighed down by sluggish demand for high-end goods in China and the US and the threat of a trade war. Meanwhile, Hermès’s market value surpassed that of LVMH, the conglomerate that once tried to buy the maker of the coveted Birkin bag in a stealth raid that shocked the French corporate world 15 years ago.

• Boeing falls 2.7% in premarket trading. China has ordered its airlines not to take any further deliveries of Boeing jets.
• Allegro MicroSystems tumbles 12% after ON Semiconductor scrapped efforts to acquire Allegro, withdrawing a bid of $35.10 a share. 
• BE Semiconductor rallies 8.2% after Applied Materials said it bought a 9% stake in the Dutch chip-equipment maker via market-based transactions.
• Applied Digital drops 12% after the digital infrastructure company reported third-quarter results that missed expectations in terms of revenue and adjusted profit. 
• Looming tariffs on the entire pharmaceutical industry will be in focus when Johnson & Johnson reports first-quarter results before the opening bell on Tuesday. Meanwhile,  after the market closes, United Airlines may lower its full-year financial guidance due to growing uncertainty about travel demand and the effects of the trade war. —Subrat Patnaik

Buying credit

One big fund manager who’s been hoarding cash for three years is stepping in to buy corporate debt in the selloff.

Over the past few weeks, Bill Eigen of J.P. Morgan Asset Management has bought assets including high-yield debt and convertible bonds, as well as exchange-traded and closed-end funds that hold corporate debt.

While he declined to specify what he purchased or how much he’s buying for his $10 billion JPMorgan Strategic Income Opportunities Fund, Eigen said he’s seeing opportunities that haven’t existed in years.

In high-yield debt, for example, Eigen said last week that he was seeing yields pushing toward 9% or higher, and spreads around five percentage points above Treasuries. That yield level is more than a percentage point above the average over the past year, according to a Bloomberg index.

“That’s when I start to get interested — when you’re finally being compensated for the risks embedded in these areas of the market,” he said. —Ye Xie

Word from Wall Street

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