The Overnight Report: Trump Kills Rally In The Rose Garden

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Markets rallied overnight, and ASX futures are pointing to a rise of 0.53%, but Trump’s Liberation Day tariff announcements post close are likely to dampen enthusiasm.

World Overnight
SPI Overnight	8019.00	+ 42.00	0.53%
S&P ASX 200	7934.50	+ 9.30	0.12%
S&P500	5670.97	+ 37.90	0.67%
Nasdaq Comp	17601.05	+ 151.16	0.87%
DJIA	42225.32	+ 235.36	0.56%
S&P500 VIX	21.51	– 0.26	– 1.19%
US 10-year yield	4.20	+ 0.04	0.96%
USD Index	103.23	– 0.69	– 0.66%
FTSE100	8608.48	– 26.32	– 0.30%
DAX30	22390.84	– 149.14	– 0.66%

Good Morning,

Although US markets rallied into the close, US futures are firmly in the red post Trump’s tariff announcements. ASX futures are pointing higher, but the latest news is likely to change the tone of the market today.

What happened overnight

The following summary reflects the overnight markets prior to the reciprocal tariff announcement from President Trump.

US markets rallied overnight with gains across the board. The Dow Jones Industrial Average rose 0.6%, more than 200 points, while the S&P 500 and Nasdaq Composite gained 0.7% and 0.9%, respectively.

The move higher was not a straight line, with ongoing volatility as market participants positioned for President Trump’s tariff announcement after the close.

CNBC reported a 20% universal tariff as unlikely, and there was also some hope tariffs are still largely being used as a bargaining chip to bring other countries to the negotiating table, which helped boost market sentiment into the close.

Mega cap stocks rallied with reports Elon Musk will soon leave DOGE, which Musk has since refuted as “fake news.” Nevertheless, on the back of poor quarterly sales figures for Tesla, down -13% from a year earlier, the stock rose 5.3% on hopes Musk’s attention will refocus on the company. Shares in Apple, Amazon, and Nvidia were also positive on the day.

Nine of the eleven S&P500 sectors registered gains. Consumer discretionary advanced 2.0%, industrials were up 0.9%, and financials rose 0.9%.

Treasuries saw an unwinding of safe-haven trading, which also contributed to the positive bias in equities. The 10-yr yield rose four basis points to 4.20%, and the 2-yr yield rose four basis points to 3.90%.

Key takeaways from Trump’s tariff announcements: Extract from NAB Markets Today

President Trump is speaking, noting today is “Liberation Day,” and his reciprocal tariff executive order, which he will shortly sign, will launch a golden age in America.

The US is set to impose a baseline tariff rate of 10% for all countries, with a chart on reciprocal rates showing China: 34%, EU: 20%, Vietnam: 46%, Japan: 24%, UK: 10%, South Korea: 25%, Thailand: 36%, Switzerland: 31%, Cambodia: 49%, Taiwan: 32%, Malaysia: 24%.

Australia is not included in the chart, but given the UK was hit with 10%, the initial impression would be a similar rate for Australia (no GST/VAT accounted).

The initial impression is of an aggressive approach, with Southeast Asia and emerging markets hard hit. It remains unclear whether the 34% rate on China is over and above the 20% already imposed.

Equity markets initially responded with a bias to buy the tariff news, on the basis there is now a higher degree of certainty. It is worth emphasising more tariffs and trade restrictions are still expected.

Imminent announcements are anticipated on sector-specific goods, such as pharmaceuticals, semiconductors, and lumber, as well as planned restrictions on the maritime industry, including penalties on Chinese vessels docking in US ports.

Tariffs imply higher inflation and lower US growth. Investor and consumer sentiment has clearly been dented. The next phase is the impact on activity and hard data, likely to trigger a re-assessment of the outlook for risk assets.

Former Treasury Secretary, Lawrence Summers,  commented the Trump administration’s tariff hikes will impose an oil crisis-like shock to the economy, boosting both prices and unemployment.

A key consideration will be the prospect and magnitude of retaliation. Encouragingly, overnight news suggests Europe and China are not looking to retaliate immediately.

Europe appears focused on supporting its economy. Bloomberg reported the EU is preparing a package of emergency measures to support sectors hardest hit by tariffs. The package will depend on what the US announces, with the EU expected to take time to assess before proposing a response. European rates and the euro moved higher following this report, with 10-year German Bund yields closing 3.5bps higher at 2.721%.

Meanwhile, China has restricted local companies from investing in the US, a move seen as a concession to the US. This effectively prevents Chinese firms from circumventing tariffs. Like Europe, China is not expected to retaliate immediately with further US trade restrictions or tariffs.

Trump torches global trade order, peddles in economic delusion: deVere CEO statement

President Trump has detonated the foundation of modern global commerce by announcing sweeping tariffs on nearly all imports, a move Nigel Green, CEO of deVere Group, says “peddles in economic delusion” and risks triggering a dangerous global slowdown.

“This is how you sabotage the world’s economic engine while claiming to supercharge it,” he says. 

“It’s a seismic day for global trade. Trump is blowing up the post-war system that made the US and the world more prosperous, and he’s doing it with reckless confidence.”

At a blustery Rose Garden event, Trump unveiled a 10% across-the-board tariff on all imports, alongside targeted tariffs of 34% on Chinese goods, 20% on European products, 24% on Japan, and 10% on the UK. 

Declaring April 2nd as “Liberation Day” for American trade, Trump said the new policy would “make America wealthy again.”

But economists and markets are sounding the alarm.

“Tariffs are taxes, plain and simple, and American consumers will bear the brunt,” notes the deVere Group chief executive.

The reality is stark: these tariffs will push prices higher on thousands of everyday goods, from phones to food, and that will fuel inflation at a time when it is already uncomfortably persistent.

The OECD recently warned that if the US and its trading partners raise tariffs by 10 percentage points, global GDP could fall by 0.3% within three years, while inflation could rise by an average of 0.4 percentage points each year over the same period.

“This plan can be expected to directly increase the cost of living in the US,” explains Nigel Green. “Wages won’t keep up with price hikes, and the squeeze on households will likely be intense.”

Confidence, investment, and growth are already under threat.

Even before today’s shock announcement, the threat of protectionism had begun to drag down global sentiment. Now, that uncertainty is hardening into reality.

“When businesses don’t know what trade will look like next quarter, they stop hiring, stop investing, and freeze plans. That ripples through to consumers. This chilling effect is how recessions begin.”

Global borrowing costs are climbing in the wake of trade disruption.

The announcement is also stoking fears in bond markets. Governments already struggling under pandemic-era debt are facing higher borrowing costs as yields rise in response to the uncertainty and inflation threat.

“This is a body blow to fragile fiscal frameworks. For nations still recovering from years of shocks –financial, pandemic, geopolitical– Trump’s trade war is a major setback.”

“The dollar’s dominance is also no longer a sure thing. America’s credibility is on the line. With the dollar as the global reserve currency, any whiff of unpredictability or politicized policy makes global investors nervous. That trust is hard-earned and easily lost.”

The deVere CEO notes that while Trump is presenting his move as a patriotic correction to trade imbalances, the actual result could be long-lasting damage to America’s economic leadership.

Back peddling is “inevitable”, predicts the chief executive.

“Economic gravity will kick in. As the costs become clear and the political pain sets in, we expect a backpedal and/or reversal of many tariffs within 12 months. The markets, the public, and eventually even the policymakers won’t accept these self-inflicted wounds.”

For now, the world must reckon with the fallout from what “may become one of the most disruptive moments in trade history.”

“It would appear that Trump is peddling in economic delusion. But the global economy runs on reality, and the reality is that this will likely cause harm on a scale that can’t be spun away.”

Corporate news in Australia

-Kelsian Group ((KLS)) announced the sale of its tourism assets to reduce debt.

-Barrenjoey is reported to be advising Perpetual ((PPT)) on the sale of its wealth business for $2.2bn.

-BHP Group ((BHP)) has considered spinning off iron ore and coal to focus on potash and copper growth, according to Reuters.

-ANZ Bank ((ANZ)) to hold an extra $250m of capital on its balance sheet to provision against ‘cultural risks’.

On the calendar today:

-AU Feb Job Ads

-Global PMIs

-BANNERMAN ENERGY LIMITED ((BMN)) Qtrly Prod’n

-HMC CAPITAL LIMITED ((HMC)) investor briefing

-HARVEY NORMAN HOLDINGS LIMITED ((HVN)) ex-div 12c (100%)

-LINDSAY AUSTRALIA LIMITED ((LAU)) ex-div 2.30c (100%)

-RIDLEY CORPORATION LIMITED ((RIC)) ex-div 4.75c (100%)

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

Spot Metals,Minerals & Energy Futures
Gold (oz)	3164.91	+ 16.36	0.52%
Silver (oz)	34.80	+ 0.39	1.12%
Copper (lb)	5.10	+ 0.07	1.42%
Aluminium (lb)	1.12	– 0.01	– 0.56%
Nickel (lb)	7.13	– 0.00	– 0.03%
Zinc (lb)	1.25	– 0.02	– 1.27%
West Texas Crude	72.19	+ 0.94	1.32%
Brent Crude	75.31	+ 0.82	1.10%
Iron Ore (t)	104.24	+ 2.04	2.00%

The Australian share market over the past thirty days

Index	01 Apr 2025	Week To Date	Month To Date (Apr)	Quarter To Date (Apr-Jun)	Year To Date (2025)
S&P ASX 200 (ex-div)	7899.70	-1.03%	0.72%	0.72%	-3.18%

BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS
IPL	Dyno Nobel	Upgrade to Buy from Accumulate	Ord Minnett
NST	Northern Star Resources	Upgrade to Buy from Hold	Bell Potter
OPT	Opthea	Downgrade to Sell from Buy	Bell Potter
PNR	Pantoro	Downgrade to Sell from Hold	Bell Potter

For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.

All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available on the FNArena website.  Click here. (Subscribers can access prices on the website.)

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