Stock Market Today: Dow, S&P 500 Set to Open Down; Trump Tariffs Start; Treasuries Selloff
April 9, 2025
U.S. stock futures were swinging between gains and losses early on Wednesday after President Donald Trump’s tariffs kicked in. However, all eyes are on the bond market and a selloff in U.S. Treasuries.
Dow Jones Industrial Average futures were down 208 points, or 0.6%. S&P 500 futures were down 0.2% and Nasdaq 100 futures were gaining 0.2%.
U.S. President Trump’s sweeping duties, including a 104% tariff on Chinese goods, took effect Wednesday.
The big question for markets is why the price of long-term U.S. Treasury debt has been falling, driving yields higher.
“US Treasury markets are also experiencing an incredibly aggressive selloff… adding to the evidence that they’re losing their traditional haven status,” wrote Deutsche Bank analyst Henry Allen in a research note on Wednesday
The yield on the benchmark 10-year Treasury note stood at 4.366% early on Wednesday. That was up six basis points from the previous day but below its brief spike to 4.5% in overnight trading. Yields and prices move inversely.
Several explanations for the move have been put forward, including hedge funds liquidating the so-called “basis trade” in Treasury futures, foreign buyers unloading U.S. government bonds, and investors demanding more compensation for holding the debt in the face of inflation and stability fears.
“Given the scale of the rout, that’s raising questions about whether the Federal Reserve might need to respond to stabilise market conditions, and we can even see from fed funds futures that markets are pricing a growing probability of an emergency cut, just as we saw during the Covid turmoil and the height of the GFC in 2008,” Allen wrote.
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