U.S. President Donald Trump holds an executive order in the Oval Office, at the White House in Washington, D.C., U.S. March 6, 2025.
Evelyn Hockstein | Reuters
U.S. President Donald Trump expanded his tariff pause to goods coming in from Canada and Mexico, so long as they satisfy terms of the United States-Mexico-Canada Agreement, a trade deal between all countries.
Unlike Trump’s Wednesday reprieve to automakers, which bumped up stocks, investors weren’t relieved this time. All major U.S. benchmarks sank, with the Nasdaq Composite limping into correction territory and losing its post-election Trump bump.
That might be because the Trump administration seems to be doubling down on tariffs, even as it acknowledges — and dismisses — the repercussions of such levies.
Trump brushed off the idea that he’s watching the markets, causing dismay in investors who were banking on the “Trump put,” the idea that the current president would prevent a steep drop in the stocks. Meanwhile, U.S. Treasury Secretary Scott Bessent waved away the idea of “cheap goods” as integral to the “American dream.”
What you need to know today
Tariff pause on some goods
Goods imported into the U.S. from Canada and Mexico, and which are compliant with the North American trade agreement known as the USMCA, will be temporarily excluded from U.S. President Donald Trump’s 25% tariffs on both countries, a White House official told reporters Thursday. That covers around 38% of Canadian imports and 50% of Mexican ones, according to another official. The reprieve will last until April 2.
‘Not even looking at the market’: Trump
When asked on Thursday whether the decision to pause tariffs on many products from Canada and Mexico for one month was because of the stock market, Trump said it had he’s “not even looking at the market.” He added, in the long term “the United States will be very strong with what is happening here.” On the same day, U.S. Commerce Secretary Howard Lutnick told CNBC, “The president is focused on rebuilding America … You’re going to see the stock market explode.”
U.S. Treasury Secretary dismisses ‘cheap goods’
U.S. Treasury Secretary Scott Bessent on Thursday said during a speech to the Economic Club of New York that “access to cheap goods is not the essence of the American dream.” He added that Trump considers tariffs to have three benefits: as a revenue source for the government, as a way to protect industries and workers from unfair practices around the world, and as “the third leg to the stool” as Trump “uses it for negotiating.”
More layoffs than during pandemic era
U.S. employers announced 172,017 layoffs for February, up 245% from the previous month and the highest monthly count since July 2020 during the Covid pandemic, outplacement firm Challenger, Gray & Christmas reported Thursday. More than one-third of the total came from billionaire Elon Musk’s efforts, with Trump’s blessing, to slash the federal headcount. Challenger put the total of announced federal job cuts at 62,242.
U.S. markets grow tired of tariff changes
U.S. stocks tumbled Thursday on tariff flip-flop fatigue. The S&P 500 fell 1.78% and the Dow Jones Industrial Average lost 0.99%. The Nasdaq Composite slumped 2.61% to enter correction territory, meaning it has fallen 10% from a recent high. The tech-heavy index has also wiped out all its post-election gains. Europe’s Stoxx 600 index edged down 0.03% as investors digested the European Central Bank’s latest rate cut. Germany’s DAX rose 1.47% after hitting a record high earlier in the trading day.
European Central Bank cuts rates
The European Central Bank on Thursday cut interest rates by 25 basis points and updated the language in its decision to say monetary policy was becoming “meaningfully less restrictive.” The cut brings the ECB’s deposit facility rate, its key rate, to 2.5% — a move that markets had widely priced in before the announcement. ECB President Christine Lagarde said no Governing Council members opposed the cut, but one central bank governor abstained.
[PRO] Semi ETF forms dreaded pattern
The early part of 2025 has not been kind to semiconductor stocks. An ETF tracking a basket of semiconductor companies is down double digits in the past month, in contrast to its 38.5% jump in 2024. The semiconductor ETF’s latest movement has formed a dreaded chart pattern — the first time it’s done so in more than two years — which could signal more trouble ahead.
And finally…
Traders across the globe are monitoring updates to U.S. President Donald Trump’s trade policy.
Spencer Platt | Getty Images
Global bonds sell off as investors react to Trump’s tariffs and a German ‘paradigm shift’
Government borrowing costs rose across the globe on Thursday. Yields on German government bonds skyrocketed on Wednesday, with the yield on the 10-year debt instruments adding around 30 basis points. The 10-year bund yield, seen as a benchmark for the wider euro zone, rose at the start of Thursday’s trading session before trending lower.
Deutsche Bank research strategist Jim Reid said in a note to clients on Thursday morning that Germany’s political gear shift had helped fuel a greater appetite for riskier assets in Europe. “There’s no doubt that markets are pricing in a once-in-a-generation policy regime shift, which has brought about a huge risk-on move for European assets,” he said.
