On April 11, 2025, U.S. stock markets ended the day lower amid growing concerns over economic risks. President Donald Trump admitted that his tariff policies would present challenges, but he defended them as necessary for addressing long-standing trade issues. During a Cabinet meeting, Trump emphasized that the transition might cause short-term difficulties but expressed confidence that the end result would be positive. He also hinted at the possibility of extending the 90-day pause on his “reciprocal” tariffs, depending on the progress of trade negotiations with U.S. partners.
Market Performance:
The major U.S. indices closed in the red, with the S&P 500 dropping 3.46%, the Nasdaq declining by 4.31%, and the Dow Jones falling 2.50%. These losses were accompanied by a slight pullback in Bitcoin, which dropped 1.33%, trading at $79,800 after a strong performance earlier in the month.
Economic Anxiety and Fed Concerns:
Trump’s remarks came amid rising economic anxiety, as Federal Reserve policymakers signaled concerns about a potential economic downturn. Chicago Federal Reserve Bank President Austan Goolsbee voiced concerns over a potential return to the economic conditions seen during the COVID-19 pandemic, citing a loss of confidence and increasing anxiety among businesses and consumers. Goolsbee warned that deteriorating sentiment could pose significant risks to the broader economy.
Recession Risks and Policy Shifts:
Trump’s trade approach has also been influenced by these growing economic concerns. A Wall Street Journal report revealed that while Trump initially accepted the risk of a mild recession to avoid a deeper economic depression, recent market volatility and rising Treasury yields led him to reconsider some of his tariff decisions. This shift, driven by advice from National Economic Council Director Kevin Hassett and Treasury Secretary Scott Bessent, helped trigger a market rebound on April 9, 2025, when the S&P 500 saw its strongest single-day gain since 2008.
The evolving situation indicates that the U.S. economy may face further turbulence as policymakers and the market continue to navigate a challenging economic landscape, with the potential for additional policy adjustments to come.
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