5 min read
Tariff Moves Spark Market Volatility: Staying Focused Amid the Noise
Tariffs introduced on April 2nd were quickly reversed in part, followed by further updates targeting the technology sector. These developments serve as a reminder of how quickly market sentiment can shift – and why a long-term perspective remains important.
What Happened?
• Tariff Reversal: On April 9th, President Trump announced a 90-day pause on recently imposed reciprocal tariffs for all countries except China. This decision followed market volatility and concerns from business leaders. However, tariffs on Chinese goods were raised further to a cumulative rate of 125%, escalating tensions.
• Focus on Technology Sector: A U.S. investigation into semiconductor imports signalled potential new tariffs aimed at reducing dependence on Chinese technology. While some electronics – such as smartphones and laptops – have been made temporarily exempt, officials suggest these exemptions may not last.
How Have Markets Reacted?
Equities: The initial tariff announcements led to significant market declines. However, the pause in tariffs triggered a strong rebound, with the S&P 500 recording it’s largest one-day gain since 2008. That said, sectors exposed to Chinese manufacturing –especially tech– remain under pressure.
Bonds: U.S Treasury yields have fluctuated, reflecting investor concerns over the economic impact of the tariffs and the potential for rising inflation.
Gold: As investors moved toward safe-haven assets, gold prices rose – a signal of ongoing caution in markets.
Why It Matters
• Policy Uncertainty: The speed and unpredictability of changes in trade policy, particularly involving technology, have introduced heightened short-term market volatility.
• Supply Chain Disruptions: Tariffs on semiconductors and electronics could impact global supply chains, affecting production costs and pricing across key industries.
What This Means for Your Portfolio
• Short-term Volatility: You may see some fluctuations in your portfolio’s value as markets continue to react to policy developments. These short-term movements are normal and expected within a long-term investment journey.
• Diversification Works: Your portfolio is well-diversified, meaning it is designed to spread risk across regions, sectors and asset types. That helps to soften the impact of volatility in any one area.
• Long-Term Focus: While short-term market changes can be uncomfortable, history shows that markets tend to recover from shocks and go on to deliver long-term growth. Staying focused on your long-term goals remain the most effective approach.
Looking Ahead
We are closely monitoring the situation and its potential impact on your investments. If you have any questions or wish to discuss your investments in more detail, please do not hesitate to contact your Wealth Planner.
Sources:
Trump exempts smartphones from ‘reciprocal’ tariffs
US tech tariff exemption will be temporary, says Trump
US suspends President Trump's Reciprocal Tariff Policy for 90 days, except for China
Tech stocks jump after Trump pauses tariffs on electronics
S&P 500 hits lowest close in almost a year as hopes wane for tariff concessions | Reuters
Trump tariffs live updates: Trump team sows confusion over electronics tariffs as chip levies loom
Stock Market News, April 11, 2025: Stocks Rise Despite Recession Fears; Treasury Yield Surges
China hits US imports with additional retaliatory tariff of 50%
S&P 500 Snapshot: Wednesday's Rally Fuels Best Week in Months - dshort - Advisor Perspectives
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