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Introduction
Financial markets have just experienced one of their strongest shocks since the 2020 crisis. In just two days, major global indexes suffered significant losses triggered by the sudden announcement of extensive tariffs by the United States. This situation has reignited trade tensions and renewed an atmosphere of extreme uncertainty. For institutional investors, this calls for clear-headed analysis, strategic reflection, and rigorous portfolio management.
1. Context of the correction: Exogenous and brutal shock
The market drop is primarily explained by an exogenous political event: the unilateral imposition of tariffs by the American administration. This measure, unprecedented in decades, caused shockwaves in financial markets, reigniting fears of a global trade war. The unexpected nature and symbolic significance of the announcement led to widespread panic selling, amplified by technical factors (leveraged positions, systematic strategies, margin calls).
2. Increased volatility but intact opportunities
In this stressed context, the fear index (VIX) reached extreme levels, indicating widespread market panic. Yet, for long-term investors, this volatility also presents opportunities. Rapid declines in prices create attractive entry points for quality assets, sometimes unfairly penalized. This is thus a favourable period for stock picking and gradual building of strategic positions.
3. Economic fundamentals: A still-solid foundation
Despite current anxiety, macroeconomic fundamentals remain robust: historically low unemployment, moderate growth, controlled inflation. Companies continue to post positive results, confirming the strength of their business models. Before the tariff announcement, the U.S. economy was even described as close to cyclical perfection. This highlights the transient, rather than fundamental, nature of the current crisis.
4. Monetary policy positioning: A Vigilant Fed
The Federal Reserve does not currently envisage direct intervention. Jerome Powell reiterated that the Fed intends to remain patient and responsive, without yielding to short-term pressures. However, it stands ready to act should economic conditions deteriorate durably. This stance helps stabilize market expectations while preserving institutional credibility.
5. Political interpretation: Reversible uncertainty
The current shock is largely political in nature, hence potentially reversible. The possibility of a rapid de-escalation cannot be ruled out, especially as market performance is often seen as a key indicator by the American administration. Investors must remain vigilant but also prepared to capture the positive effects of a shift in tone or strategy.
6. Recommended strategies: Caution, discipline, and tactics
We recommend a three-pronged approach:
• Maintain a core of quality assets.
• Actively select quality companies, notably in technology.
• Initiate tactical risk-taking on oversold assets.
7. Sectors to watch: Technology and structural leadership
Technology remains a key sector due to its strong fundamentals, structural growth, and capacity to outperform during rebounds. Now is the time to gradually build exposure to tomorrow's leaders.
Conclusion
Current turbulence demands rigour and discipline. For institutional investors, this is a period of strong potential:
• Fundamentals do not justify profound portfolio revisions.
• Volatility allows for value-creating adjustments.
• Long-term opportunities exist, notably in future-oriented sectors.
In the storm, disciplined strategists are best positioned for the return to calm. This correction, though brutal, could become the starting point for sustainable value creation.
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Market Brief
Monday
• Dow Jones: +1.00% (42,001.76 points)
• S&P 500: +0.55% (5,611.85 points)
• NASDAQ: -0.14% (17,299.29 points)
• TSX (Toronto): -0.62% (21,172.36 points)
On the currency market, the Canadian dollar traded at an average rate of 73.85 US cents, down from 74.11 US cents the previous day.
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Trade tensions: markets rebound despite a tough quarter
Wall Street closed Monday’s session on a mixed note, with investors taking advantage of a technical rebound at the end of a particularly volatile month and quarter, as the announcement of the massive tariffs promised by President Trump for April 2, now dubbed “Liberation Day,” looms.
• Dow Jones (+1.00%): Rebounded over 400 points after erasing morning losses, driven by defensive stocks and a selective return to yield-focused equities.
• NASDAQ (-0.14%): The tech-heavy index continues to struggle, posting a monthly loss of over 5% and a year-to-date drop of more than 10%. Nvidia (-1.2%) and Tesla (-1.7%) continue to weigh on the index.
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Stocks in brief
Top gainers of the session
• Coca-Cola (+2.2%): Investors turn to defensive stocks amid trade tax uncertainty.
• Walmart (+1.9%): Rise supported by a rotation into less cyclical stocks.
Top losers of the session
• Moderna (-8.9%): Stock tumbles following the resignation of the FDA’s vaccine lead, who disagreed with the Health Minister.
• Tesla (-1.7%): Another drop for the stock, now down over 35% year-to-date, impacted by rising costs and weakening momentum in the EV segment.
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Sector performance
• Sector up: Consumer Staples
Rotation into defensive names ahead of potential macroeconomic disruptions linked to new U.S. tariff barriers.
• Sector down: Growth Technology
Growth stocks, particularly large-cap tech, continue to suffer from persistent inflation and geopolitical uncertainty.
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Commodities and Geopolitics
• Gold: +1.25% ($3,123.82/oz) – The precious metal reached a new all-time high, fuelled by market nervousness over upcoming U.S. surtaxes and global recession risk.
• WTI Oil: +3.06% ($71.48) – Rise driven by the threat of U.S. tariffs of up to 50% on countries buying Russian or Venezuelan oil.
• Brent: +2.00% ($74.74) – Ongoing tensions with Iran and potential supply tightening continue to support prices.
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Tuesday
• Dow Jones: -0.03% (41,989.96 points)
• S&P 500: +0.38% (5,633.07 points)
• NASDAQ: +0.87% (17,449.89 points)
• TSX (Toronto): +0.47% (25,033.28 points)
On the currency market, the Canadian dollar traded at an average rate of 69.70 US cents, up from 69.56 US cents the previous day.
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Outlook and trade policy
Markets held their breath on the eve of “Liberation Day”, declared by Donald Trump, who is expected to announce at the White House on Wednesday at 4:00 p.m. a series of “reciprocal” tariffs targeting all trade partners.
The U.S. press is reporting a flat 20% tax on all imports, a scenario considered particularly aggressive by economists. According to a Yale Budget Lab study, such a measure could cost U.S. households $3,400 to $4,200 in purchasing power and significantly slow GDP growth.
Markets are nevertheless hoping for a more moderate presidential tone. A less severe announcement than feared could trigger a short-term relief rally.
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Stocks in brief
Top gainers of the session
• Tesla (+3.60%): Strong rebound supported by a rotation into consumer discretionary and hopes that upcoming tariffs may partially spare the sector. Still, the stock remains down over 35% YTD.
• Newsmax (+179.01%): Spectacular second trading day for the media group, highly popular among the far right, with the stock multiplying 23 times since IPO.
• Nvidia (+1.63%): Tech giants benefited from a technical rebound along with other mega-cap stocks.
Top losers of the session
• Ford (-0.90%): Hit by declining U.S. quarterly sales amid lineup transitions and uncertainty ahead of tariffs.
• Newsmax (-12.45% intraday): The stock showed extreme volatility as profit taking followed its speculative surge.
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Sector performance
• Sector up: Consumer Discretionary
Led sector gains, driven by rebounds in Tesla (+3.6%) and Nike (+2%), amid a temporary return of risk appetite ahead of the presidential announcements.
• Sector down: Manufacturing and Automotive
Sector hurt by weak economic indicators: the ISM manufacturing index entered contraction territory, tied to higher input costs from existing steel and aluminum tariffs.
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Mixed economic indicators
• ISM Manufacturing Index: Contracted in March, highlighting the impact of existing tariffs on production costs.
• Job Openings (JOLTS): Fell more than expected in February, signalling a gradual cooling of the labour market.
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Commodities and Bonds
• Gold: -0.45% ($3,109.71/oz) – Slight decline amid market caution following previous record highs.
• WTI Oil: +3.00% ($75.04) – Rebound driven by threats of new tariffs on imports of Russian and Venezuelan oil.
• Brent: +2.00% ($74.04) – Rose in tandem with WTI despite geopolitical volatility.
• Bonds: Yield on 10-year U.S. Treasury fell to 4.16%, down from 4.21% the day before, reflecting increased demand for safe-haven assets.
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Wednesday
• Dow Jones: +0.56% (42,225.32 points)
• S&P 500: +0.67% (5,670.97 points)
• NASDAQ: +0.87% (17,601.05 points)
• TSX (Toronto): +1.09% (25,307.18 points)
On the currency market, the Canadian dollar traded at an average rate of 69.83 US cents, up from 69.70 US cents the previous day.
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Tariff anticipation lifts markets
Despite opening in negative territory, North American markets closed higher on Wednesday, as investors bet on a less aggressive-than-expected announcement from President Trump regarding trade tariffs. The detailed tariff plan was to be released after market close, fuelling uncertainty but also hope for a more moderate scenario.
• Tesla (+5.33%): Strong rebound after early losses tied to weak sales, driven by speculation that Elon Musk may be stepping back from his advisory role in government, according to Politico.
• Trump Media & Technology Group (-7.40%): Dropped following reports that Donald Trump may sell over $2 billion worth of shares in Truth Social.
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Stocks in brief
Top gainers of the session
• Tesla (+5.33%): Investors regained confidence on rumours of Elon Musk’s partial political withdrawal, despite declining deliveries.
• Amazon (+2.00%): Rose after a New York Times report indicated it submitted an offer to acquire TikTok, boosting its social media ambitions.
Top losers of the session
• Trump Media & Technology Group (-7.40%): Volatile stock fell on news of potential share sales by Trump.
• Newsmax (-77.41%): Conservative media stock plummeted on its third day of trading after reaching extreme highs.
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Sector performance
• Sector up: Technology
Tech stocks rebounded, supported by gains in Amazon and Tesla. Investors believe these giants may benefit from geopolitical shifts by refocusing on core activities or exploring acquisitions.
• Sector down: Alternative Media
Speculative names linked to conservative media saw steep losses. The collapse of Newsmax and TMTG reflected a sharp investor pullback after an unsustainable rally.
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Thursday
• Dow Jones: -3.98% (40,545.93 points)
• S&P 500: -4.84% (5,396.52 points)
• NASDAQ: -5.97% (16,550.61 points)
• TSX (Toronto): -4.00% (24,295.89 points)
On the currency market, the Canadian dollar traded at an average rate of 70.53 US cents, up from 69.83 US cents the previous day. The U.S. dollar, meanwhile, strengthened against major currencies as investors sought safe havens amid deepening recession fears.
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Market Shock After New Tariff Announcement
Markets plunged Thursday following President Trump’s announcement of a new tariff regime targeting all U.S. trade partners. A 10% minimum rate on all imports takes effect April 5, with higher rates up to 54% for China, 46% for Vietnam, and 32% for Indonesia.
Fears of a prolonged global trade war and rising inflation triggered broad-based losses, with economists warning of stagflation risks.
• Nike (-14.4%): Lost $12 billion in market cap as tariffs target key production countries including China, Vietnam, and Indonesia.
• Apple (-9.0%): Slid on anticipated cost increases due to China-based manufacturing.
• Wayfair (-25.0%): Took a major hit due to reliance on Asian imports.
• Tesla (-5.0%): Declined on fears over disrupted global supply chains.
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Stocks in brief
Top gainers of the session
No notable gainers on a day dominated by widespread selling.
Top losers of the session
• Gap (-20.0%), Ralph Lauren (-16.0%), American Eagle (-18.0%): Apparel retailers exposed to Asian imports suffered steep losses.
• Groupe Dynamite (-19,0 %) : The Canadian retailer was hit hard due to its sourcing model and U.S. expansion.
• Aritzia (-20.0%), Lululemon (-10.0%): Canadian brands heavily reliant on imports also declined.
• Gildan (-10.0%): Fell as operations in Bangladesh face new 37% tariffs.
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Sector performance
• Sector down: Consumer Discretionary
Retailers of apparel, furniture, and accessories reliant on imports were decimated. Investors fear these companies will either see margin compression or be forced to hike prices.
• Sector down: Technology
Heavyweights like Apple, Nvidia, and Tesla all sold off sharply amid supply chain concerns.
• Sector down: Energy
Oil prices tumbled to seven-month lows:
• WTI: -7.63% ($66.25/barrel)
• Brent: -6.96% ($69.97/barrel)
The drop followed recession concerns and an unexpected OPEC+ production hike. Gold fell 1%, but remained above $3,100/oz as investors reassessed safe-haven flows.
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Friday
• Dow Jones: -2.40% (≈ 39,000 points)
• S&P 500: -4.00% (≈ 5,180 points)
• NASDAQ: -3.80% (≈ 15,920 points)
On the currency market, the Canadian dollar is trading around 70.60 US cents, up from 70.53 US cents the previous day. The U.S. dollar is slightly weaker against major global currencies as investors rush to bonds, bringing the 10-year Treasury yield back below 4% (≈ 3.94%).
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Markets Sink Further as China Retaliate and Recession Fears Surge
Markets took another sharp turn downward on Friday following China’s retaliation to U.S. tariffs, escalating fears that a global trade war is now fully engaged and may tip the world economy into a recession. Beijing announced a 34% tariff on all U.S. products, matching the Trump administration’s duties on Chinese imports unveiled earlier this week.
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Stocks in brief
Top losers of the session
• Apple (-3.00%): Continues to slide, now down 10% on the week, due to heavy China exposure and slowing demand.
• Nvidia (-6.00%): Hit hard as investors flee AI and semiconductor stocks vulnerable to trade restrictions.
• Tesla (-9.00%): Sell-off accelerates on supply chain concerns and shrinking demand in China.
• DuPont (-12.00%): Tumbles after China launches antitrust investigation, intensifying the political retaliation.
• Boeing & Caterpillar (≈ -5%): Big exporters to China lead the Dow lower on escalating trade risk.
• Nintendo: Delays pre-orders for the Switch 2, citing tariff uncertainty and volatility in global trade.
Top gainers of the session
• Nike (+3.99%): Shares rebound amid speculation that the Vietnam-specific tariff clause may be revised, alleviating concerns over its manufacturing exposure.
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Sector performance
• Sector down: Technology
Suffers deep losses as tensions with China threaten supply chains, demand, and regulatory stability for tech leaders.
• Sector down: Industrials & Exporters
Heavyweights like Boeing and Caterpillar drop sharply on fears of prolonged disruption to international trade.
• Sector down: Chemicals & Materials
DuPont’s plunge weighs on the sector as China signals a targeted escalation with new regulatory tools.
• Sector down: Energy
Oil prices have fallen to pandemic lows, as the global economic outlook deteriorates and demand projections are cut.
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Macroeconomic & policy backdrop
• March jobs report:
• +228,000 jobs added, beating expectations (140,000).
• The unemployment rate rose slightly to 4.2%.
• Wage growth up 0.3% monthly, 3.8% year-over-year (lowest since July 2024).
While the data suggests a stable labour market, concerns remain that tariffs could derail hiring trends in the coming months.
• Powell comments:
Federal Reserve Chair Jerome Powell signalled a pause in monetary policy decisions, citing uncertainty from Trump's tariff escalation.
“The size and duration of these effects remain uncertain,” Powell said. “We are well positioned to wait for greater clarity.”
Markets interpreted this as no short-term relief from the Fed, exacerbating today’s losses.
• Geopolitical sentiment:
• European markets also slumped more than 2%, posting their worst session in eight months.
• President Trump doubled down on his policy via Truth Social, stating his “policies will never change” and urging investment in U.S.-based companies.________________________________________
