Trade tensions and inflation concerns drive chaotic stock market week

US stocks jump and the bond market swings to cap Wall Street’s chaotic and historic week

How does the stock market work? Basically, investors need to put their money somewhere to hope that it will grow in value. Now you could stash your money under the mattress, so to speak, but you might be able to get more money. In exchange for giving it to *** company that can do more with your money. So if I have $1 I could put it in the bank savings account, or I could give it to Apple, and they might be better suited to turn that dollar into $5 and that's the whole point of the stock market is we trust these companies enough, they have proven records and it's become somewhat of *** staple to our institutions that drive the modern economy to put some money into these, uh, you know, these markets, watch it grow. What is *** bull in *** bear market? Basically they're used to describe *** bull market is good economy, good market. Things are roaring positive, things are going up, green across the board, and *** bear market is the opposite. *** bear market is when things are declining, very red. We have downward trajectories, the economy is doing bad, the stock market's doing bad. What is volatility and why is it being thrown around? Why does it matter? Volatility is really important because investors don't like it. Now volatility is risk, it's uncertainty, and investors and as economists and finance experts, we love being able to predict things. We don't want wild swings back and forth in behavior, right? We don't want to see someone behaving erratically. We want to be able to know our money is safely stored with uh our assets, whether it's in *** company, whether it's Apple stock, for instance. And the volatility that the markets are seeing means stocks are all over the place. They're going up, they're going down. What are margin calls? How does margin work? Basically, margin works as *** way of borrowing money. You borrow maybe $1000 2000 dollars and you invest it. So maybe you think that now is *** good opportunity to buy, but you don't have the money to make that purchase. So you go to the institution, you say, hey, I'd like to borrow $2000 and then you're on margin. That's *** margin amount of $2000. You put it in the market and you have an IOU on it. So hopefully you see maybe you gain 10% of that investment back over the course of the next month. Great, you've made money using money that you didn't actually have. So now you can capture that profit, repay person who lent you the money, and everything's great. But what happens if the bet goes bad? You're still on the hook for paying that loan back. It's nothing more than *** loan being used in *** fancy way. So you're borrowing the money and when it's at risk of not meeting the capital requirements, you will get margin calls. Indexes are typically what we use to get *** big picture, *** bird's eye view of how the markets are doing. So it's hard to say, well, what is the market? We use an index typically known as the S&P 500, maybe the Dow Jones Industrial Average, maybe the NASDAQ. So there is These ways of getting *** sense for the overall market as best we can without getting too granular. It's hard to say that the whole market is doing bad unless you look at these indexes because they proxy for the market. They're little pieces of every company that's being traded. Typically with futures, you know, if you're traded, you want to see how the markets might open up the next day. You could check at 8 p.m. and you see the market futures all pointing towards reds and so. In that case, the margin call might kick in, right? It depends on the exact brokerage you have. The futures are just the expectation of what's to come, whether it's the next day or maybe *** week from now, depending on the contract or the asset that's underlying it. But it's like crystal ball futures, like it's looking ahead, not necessarily is going to be how the market opens. Markets tend to open at 9:30 a.m. but it gives you an estimate of how things are looking before the the door to the store opens. Whether it's *** dead cat bounce or *** dead cow bounce, I'm assuming it's different animals for the same behavior where markets really quickly deteriorate. They go down, down, down, down, and then you see *** bit of *** brief reprieve, *** spike back up, so maybe they dipped 10%, suddenly they're up 2%. That could be *** dead cat bounce or dead cow bounce where it's *** real brief bounce, cause it hit the ground, bounced back up slightly, but then it keeps going back down, right? It's *** misleading indicator where you think things have finally reversed, things are good again, um, but no, that was just *** brief pause and things continue to go badly. GDP is the gross domestic product. It's capturing the amount of imports and exports that the country sees that we can better proxy how the country is doing it and whether or not it's growing. And so we want GDP to go up. We want to be able to say that the economy is doing well. And in that case, we have *** healthy economy. When GDP starts to contract, that's usually *** decrease in gross domestic product, things we're producing, selling, consumers responding and consuming as well. And when we see that contraction which we saw recently and we'll probably see this quarter as well, uh, that's another indicator that *** recession is inbound because people are buying less. And so if there's less consumption, less money moving hands. It's usually not good for *** sustained economic growth, but that tends to happen, right? We have these periods of 8 to 10 years of economic success, things do well, and then there's always *** contraction that occurs for *** few years afterwards. They come and go. It's always very painful to be in that, like we're starting to experience now, but it is normal. It happens and has happened and will continue to happen, um, but yeah, we use GDP to best capture our national performance.

US stocks jump and the bond market swings to cap Wall Street’s chaotic and historic week

U.S. stocks jumped Friday in another manic day on Wall Street, while the falling value of the U.S. dollar and other swings in financial markets suggested fear is still high about escalations in President Donald Trump’s trade war with China.The S&P 500 rallied 1.8%, after veering repeatedly between gains and losses, to cap a chaotic and historic week full of monstrous swings. The Dow Jones Industrial Average went from an early loss of nearly 340 points to a gain of 810 before settling at a rise of 619 points, or 1.6%, while the Nasdaq composite jumped 2.1%.Stocks kicked higher as pressure eased a bit from within the U.S. bond market. It’s typically the more boring corner of Wall Street, but it’s been flashing serious enough signals of worry this week that it’s demanded investors' and Trump’s attention.The yield on the 10-year Treasury topped 4.58% in the morning, up from 4.01% a week ago. That’s a major move for a market that typically measures things in hundredths of a percentage point. Such jumps can drive up rates for mortgages and other loans going to U.S. households and businesses, which would slow the economy, and they can indicate stress in the financial system.But Treasury yields eased back as the afternoon progressed, and the 10-year yield regressed to 4.48%. That’s still higher than the day before, but not by as eye-wateringly much.Susan Collins, president of the Federal Reserve Bank of Boston, told the Financial Times that the Fed “would absolutely be prepared�� if markets become disorderly and “does have tools to address concerns about market functioning or liquidity should they arise.”Several reasons could be behind this week’s jump in U.S. Treasury yields, which is unusual because yields typically fall when fear is high.Investors outside the United States could be selling their U.S. bonds because of the trade war, and hedge funds could be selling whatever’s available in order to raise cash to cover other losses. More worryingly, doubts may be rising about the United States�� reputation as the world’s safest place to keep cash because of Trump’s frenetic, on-and-off tariff actions.The value of the U.S. dollar also fell again Friday against everything from the euro to the Japanese yen to the Canadian dollar.Gold, however, lived up to its reputation as a safer haven for investors and saw its price rise to another record.The shaky trading came after China announced Friday that it was boosting its tariffs on U.S. products to 125% in the latest tit-for-tat increase following Trump’s escalations on imports from China.The repeated U.S. tariff increases “on China has become a numbers game, which has no practical economic significance, and will become a joke in the history of the world economy,�� a Finance Ministry spokesman said in a statement announcing the new tariffs. “However, if the US insists on continuing to substantially infringe on China’s interests, China will resolutely counter and fight to the end.”Rising tensions between the world’s two largest economies could cause widespread damage and a possible global recession, even after Trump recently announced a 90-day pause on some of his tariffs for other countries, except for China.All the uncertainty caused by the trade war is eroding confidence among U.S. shoppers, which could affect their spending and translate into damage for the economy, which came into this year running at a solid rate.Video below: Economist provides insight on stock marketA preliminary survey by the University of Michigan suggested sentiment among U.S. consumers is falling even more sharply than economists expected. “This decline was, like the last month’s, pervasive and unanimous across age, income, education, geographic region, and political affiliation,�� according to the survey’s director, Joanne Hsu.“We remain in the early innings of this global trade regime change, and while the 90-day pause on reciprocal tariffs temporarily reversed the market selloff, it does prolong uncertainty,�� according to Darrell Cronk, president of Wells Fargo Investment Institute.That’s why many on Wall Street are prepared for more swings to hit markets. This past week began with huge swings for U.S. stocks within each day as rumors swirled and then got batted down about a possible 90-day pause on Trump’s tariffs. Then the U.S. stock market surged to one of its best days in history after Trump did deliver a pause, before swinging to end the week.All told, the S&P 500 rose 95.31 points Friday to 5,363.36. The Dow Jones Industrial Average climbed 619.05 to 40,212.71, and the Nasdaq composite climbed 337.14 to 16,724.46.Friday’s swings came after a set of stronger-than-expected profit reports from some of the biggest U.S. banks, which traditionally help kick off each earnings reporting season.JPMorgan Chase, Morgan Stanley and Wells Fargo all reported stronger profit for the first three months of the year than analysts expected. JPMorgan Chase rose 4%, Morgan Stanley added 1.4% and Wells Fargo lost 1%.Another report on inflation also came in better than expected. That could give the Federal Reserve more leeway to cut interest rates if it feels the need to support the economy.But Friday’s report on inflation at the wholesale level was backward looking, measuring March’s price levels. The worry is that inflation will rise in coming months as Trump’s tariffs make their way through the economy. And that could tie the Fed’s hands.The University of Michigan’s survey suggested U.S. consumers are bracing for inflation of 6.7% in the year ahead. That’s the highest forecast since 1981, and such expectations can create a feedback loop that pushes inflation higher.In stock markets abroad, indexes were scattershot around the world. Germany’s DAX lost 0.9%, but the FTSE 100 in London added 0.6% as the government reported the economy, the world’s sixth largest, enjoyed a growth spurt in February. Japan’s Nikkei 225 dropped 3%, while Hong Kong’s Hang Seng climbed 1.1%.___AP writers Jiang Junzhe and Elaine Kurtenbach contributed.

NEW YORK —

The S&P 500 rallied 1.8%, after veering repeatedly between gains and losses, to cap a chaotic and historic week full of monstrous swings. The Dow Jones Industrial Average went from an early loss of nearly 340 points to a gain of 810 before settling at a rise of 619 points, or 1.6%, while the Nasdaq composite jumped 2.1%.

Stocks kicked higher as pressure eased a bit from within the U.S. bond market. It’s typically the more boring corner of Wall Street, but it’s been flashing serious enough signals of worry this week that it’s demanded investors' and Trump’s attention.

The yield on the 10-year Treasury topped 4.58% in the morning, up from 4.01% a week ago. That’s a major move for a market that typically measures things in hundredths of a percentage point. Such jumps can drive up rates for mortgages and other loans going to U.S. households and businesses, which would slow the economy, and they can indicate stress in the financial system.

But Treasury yields eased back as the afternoon progressed, and the 10-year yield regressed to 4.48%. That’s still higher than the day before, but not by as eye-wateringly much.

Susan Collins, president of the Federal Reserve Bank of Boston, told the Financial Times that the Fed “would absolutely be prepared�� if markets become disorderly and “does have tools to address concerns about market functioning or liquidity should they arise.��

Several reasons could be behind this week’s jump in U.S. Treasury yields, which is unusual because yields typically fall when fear is high.

Investors outside the United States could be selling their U.S. bonds because of the trade war, and hedge funds could be selling whatever’s available in order to raise cash to cover other losses. More worryingly, doubts may be rising about the United States�� reputation as the world’s safest place to keep cash because of Trump’s frenetic, on-and-off tariff actions.

The value of the U.S. dollar also fell again Friday against everything from the euro to the Japanese yen to the Canadian dollar.

Gold, however, lived up to its reputation as a safer haven for investors and saw its price rise to another record.

The shaky trading came after China announced Friday that it was boosting its tariffs on U.S. products to 125% in the latest tit-for-tat increase following Trump’s escalations on imports from China.

The repeated U.S. tariff increases “on China has become a numbers game, which has no practical economic significance, and will become a joke in the history of the world economy,�� a Finance Ministry spokesman said in a statement announcing the new tariffs. “However, if the US insists on continuing to substantially infringe on China’s interests, China will resolutely counter and fight to the end.��

Rising tensions between the world’s two largest economies could cause widespread damage and a possible global recession, even after Trump recently announced a 90-day pause on some of his tariffs for other countries, except for China.

All the uncertainty caused by the trade war is eroding confidence among U.S. shoppers, which could affect their spending and translate into damage for the economy, which came into this year running at a solid rate.

Video below: Economist provides insight on stock market

A preliminary survey by the University of Michigan suggested sentiment among U.S. consumers is falling even more sharply than economists expected. “This decline was, like the last month’s, pervasive and unanimous across age, income, education, geographic region, and political affiliation,�� according to the survey’s director, Joanne Hsu.

“We remain in the early innings of this global trade regime change, and while the 90-day pause on reciprocal tariffs temporarily reversed the market selloff, it does prolong uncertainty,�� according to Darrell Cronk, president of Wells Fargo Investment Institute.

That’s why many on Wall Street are prepared for more swings to hit markets. This past week began with huge swings for U.S. stocks within each day as rumors swirled and then got batted down about a possible 90-day pause on Trump’s tariffs. Then the U.S. stock market surged to one of its best days in history after Trump did deliver a pause, before swinging to end the week.

All told, the S&P 500 rose 95.31 points Friday to 5,363.36. The Dow Jones Industrial Average climbed 619.05 to 40,212.71, and the Nasdaq composite climbed 337.14 to 16,724.46.

Friday’s swings came after a set of stronger-than-expected profit reports from some of the biggest U.S. banks, which traditionally help kick off each earnings reporting season.

JPMorgan Chase, Morgan Stanley and Wells Fargo all reported stronger profit for the first three months of the year than analysts expected. JPMorgan Chase rose 4%, Morgan Stanley added 1.4% and Wells Fargo lost 1%.

Another report on inflation also came in better than expected. That could give the Federal Reserve more leeway to cut interest rates if it feels the need to support the economy.

But Friday’s report on inflation at the wholesale level was backward looking, measuring March’s price levels. The worry is that inflation will rise in coming months as Trump’s tariffs make their way through the economy. And that could tie the Fed’s hands.

The University of Michigan’s survey suggested U.S. consumers are bracing for inflation of 6.7% in the year ahead. That’s the highest forecast since 1981, and such expectations can create a feedback loop that pushes inflation higher.

In stock markets abroad, indexes were scattershot around the world. Germany’s DAX lost 0.9%, but the FTSE 100 in London added 0.6% as the government reported the economy, the world’s sixth largest, enjoyed a growth spurt in February. Japan’s Nikkei 225 dropped 3%, while Hong Kong’s Hang Seng climbed 1.1%.

___

AP writers Jiang Junzhe and Elaine Kurtenbach contributed.

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US stocks jump and the bond market swings to cap Wall Street’s chaotic and historic week

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