Stocks keep falling

With the Nasdaq 100 already in a bear market, soon it may be the S&P 500’s turn. Wild swings lashed Wall Street for a fourth straight session as back-and-forth trade threats between the US and China knocked stocks even lower, erasing an early rally after three days of tariff-induced carnage. The S&P 500 fell almost 1.6%, leaving it on the border of bear country.

Hopes for a quick end to extreme volatility were dashed when a Trump administration official said the White House is moving forward with more tariffs on Chinese goods—as high as 104%—even after Beijing vowed to “fight to the end” in response to US President Donald Trump’s earlier levies. Equities continued their dive as Chinese Premier Li Qiang said his country has ample policy tools to “fully offset” negative external shocks. Treasury two-year yields tumbled as traders boosted bets on Federal Reserve rate cuts. The S&P 500 ended the day missing close to a year’s worth of gains.

Meanwhile in Washington, Democratic Senator Ron Wyden said he will force a vote on repealing tariffs in a test of GOP political support for Trump’s trade war. Wyden’s gambit will require Republicans to take a public stand on a tariff offensive that’s raised fears of a recession and spiking inflation. GOP senators, usually quick to display fealty to Trump, are starting to show signs of unease over the damage being done to what a few months ago was a resilient economy with strong employment and falling inflation.

“Whose throat do I get to choke if this turns out to be wrong?” Republican Senator Thom Tillis of North Carolina asked Tuesday during a Senate Finance Committee hearing. Frank Bruni in the New York Times recently called Tillis, who voted to confirm Trump’s most extreme cabinet picks, the “Daniel Day-Lewis of moral outrage.” But such a public warning from a prominent GOP senator may augur something new in the party’s relationship with its leader. —Jordan Parker Erb

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What You Need to Know Today

Some bad signs ahead for US debt. Global investors are finding credible alternatives to US Treasury bonds as yields on the benchmark 10-year Treasury have tumbled about 40 basis points this year—and below 4% in the past few days on Trump’s tariff barrage. In contrast, comparable rates in both Europe and Japan—which have also tumbled amid the risk aversion—remain up this year. In Germany, the 10-year bund at 2.66% reflects the prospect of a flood of bond issuance as the government ramps up defense spending. Meanwhile, the rate on 10-year Japanese bonds has soared after years near zero and is now around 1.25% as investors brace for tighter monetary policy there. While both are still well below Treasury yields, they’re at levels that make them look more attractive than Treasuries to European and Japanese investors who hedge their dollar exposure when buying US securities.

While most US district courts and Courts of Appeal hearing claims over Trump’s multi-front attack on federal workers, agencies, separation of powers and arguably constitutional rights have ruled against him, now that more cases are reaching the Supreme Court, the tide is turning. The high court has a 6-3 Republican-appointed supermajority—three members of which were selected by Trump. On Tuesday, the court blocked an order requiring he reinstate thousands of federal workers, marking the third ruling in Trump’s favor this week. On Monday, the court let Trump resume using a wartime law to try to deport alleged Venezuelan gang members, despite the statute clearly requiring a war or invasion as a prerequisite. And in another ruling yesterday, Chief Justice John Roberts paused an order requiring Trump bring back a Maryland man who was wrongly deported to a notorious prison in El Salvador. While all three rulings were procedural in nature—meaning the underlying legality of Trump’s actions wasn’t yet at issue—the spate of small wins was likely welcome news at the White House.

But Trump is facing a new challenge over his use of that 227-year-old statute, the Alien Enemies Act of 1798. While the earlier cases will likely be refiled, another case landed in Manhattan federal court Tuesday, brought on behalf of two men trying to stop their removal from the US, as well as similar deportations. Meanwhile, the Internal Revenue Service has said it will give taxpayer data about immigrants to Trump’s enforcement agencies, an unprecedented violation of the agency’s long-held privacy rules. The news comes as the administration ramps up detentions and deportations and the rest of the world cancels their US vacation plans. And according to a report in the Detroit Free Press, detentions by US Customs and Border Protection employees at airports are beginning to include American citizens. A Michigan attorney told the newspaper he was taken from his family by federal agents after a vacation in the Dominican Republic and interrogated by federal officers who asked him about his clients and pressured him to surrender his phone. The CBP denied any wrongdoing.

A fired Justice Department official accused the agency of “ongoing corruption.” Liz Oyer, a former pardon attorney for the department, has said she was fired last month after refusing to recommend that actor Mel Gibson’s gun rights be restored after his misdemeanor domestic violence conviction. In testimony on Monday at a congressional hearing, Oyer said “it should alarm all Americans that the leadership of the Department of Justice appears to value political loyalty above the fair and responsible administration of justice.” The hearing was the first time since Trump took office in January that Justice Department lawyers who were either recently fired or quit spoke before Congress about the circumstances of their departures and their concerns about the agency’s direction, the Associated Press reported.

US small-business optimism fell last month by the most since June 2022 as concerns intensified about the prospects for business conditions and sales in the wake of Trump’s sweeping tariffs. The National Federation of Independent Business optimism index declined 3.3 points to 97.4 in March as seven of the gauge’s 10 components weakened. The share of owners expecting better business conditions in the next six months plunged 16 percentage points, the steepest slide since December 2020 and the third straight decline. The percentage of firms anticipating higher inflation-adjusted sales volumes dropped 11 points from February, the most since the start of last year.

Hackers are said to have intercepted about 100 US bank regulators’ emails for more than a year, gaining access to messages containing agency deliberations and sensitive details about banks it oversees. It’s said that the attackers were able to monitor employee emails at the Office of the Comptroller of the Currency after breaking into an administrator’s account. The unidentified hackers penetrated the mailboxes of senior deputy comptrollers, international banking supervisors and other staff. In all, they had access to more than 150,000 emails from June 2023 until they were discovered and ousted earlier this year. On Feb. 26, the OCC disclosed a “cybersecurity incident” involving an administrative account in the agency’s email system which it discovered that month. It identified a “limited number of affected email accounts” and said they have since been disabled. It’s unclear who is responsible for the breach. The Trump administration meanwhile has been busy removing, defunding or firing staff from America’s cybersecurity agencies and defenses.

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