Good morning! Markets continue to whipsaw on the slightest update related to President Trump’s trade war. Today’s edition unpacks whether the White House listens to Wall Street, the EU’s Big Tech vendetta, and more. Was this email forwarded to you? Join 190,000 self-directed investors gaining an edge every morning. Sign up here. 

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Markets: Trump’s North star or tripwire?

For all his bravado on tariffs, President Trump still seems to have a soft spot for bull markets.

Fueled by a volley of comments out of the White House related to trade and monetary policy, stocks have rallied across back-to-back trading sessions. The commander-in-chief has leaned into the immutable “tough on China” stance for several weeks, but falling equities and a weakening dollar may have made him reconsider. 

Certain levies on China could be cut in half, the Wall Street Journal reported Wednesday, and officials are weighing a tiered approach for items deemed a national security threat. 

Echoing Treasury Secretary Scott Bessent’s comments Tuesday, Trump said the current 145% tariff levels on China are going to come down, though they “won’t be zero.” 

All told, it took about two weeks for the White House to moderate its stance on tariffs.

As much as the president has said he isn’t focused on markets, few investors are convinced Trump wasn’t paying attention to cascading stocks, bonds, and currency levels.

The math here is political as much as it is economic. You can’t campaign on economic boom times and then decimate capital markets.

Wall Street used its portfolios to issue a no-confidence vote in the tariff rollout, and the Trump administration took note.

“We must take a step back here and realize that all we are hearing is rhetoric,” said Dave Rosenberg, founder of Rosenberg Research. “All the president has done is to make volatility great again.”

Dollar weakness is a particularly loud signal. The greenback dipped to a three-year low on Monday, but the reasoning didn’t make sense compared to history.

While the dollar typically weakens during periods of economic growth, this time it’s done so in the middle of uncertainty — delivering a double-whammy of negative returns for foreign investors holding US stocks and US dollars in the process.

“Uncertain US trade policy, global stock market volatility, and recession fears all sound very much like at least a near-crisis period,” said DataTrek Research co-founders Nicholas Colas and Jessica Rabe.

“And yet, the dollar is weakening rather than strengthening, contrary to every other tumultuous period since the 2008 Financial Crisis.”

That might just be enough to spook the administration into a more cautious tariff rollout. 

Particularly with Wall Street veteran Bessent in the West Wing, it’s possible Trump has fallen back to his old ways of using markets as his North Star.  

Then again, for a president who likes to test boundaries, maybe not.

Rather than a compass, investors may just have to come to terms with Trump using markets as a tripwire.

Market snapshot

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Elsewhere

🇪🇺 The EU fined Apple and Meta €500 million combined for breaching the Digital Markets Act regarding its guidelines on the App Store. The bloc wants the tech giants to comply with its rules, though the move risks ratcheting up tensions with the White House, which is in the midst of tariff negotiations. (WSJ)

🚢 Elon Musk wants lower rather than higher tariffs. Tesla’s CEO said on the company earnings call that he believes “lower tariffs are generally a good idea for prosperity, but this decision is fundamentally up to the elected representative of the people being the president of the United States.” (Yahoo Finance)

🌯 Chipotle stock missed first-quarter revenue estimates. Shares fell in overnight trading after the company said it’s seeing a “slowdown in consumer spending” to start the year. Chipotle’s same-store sales dropped for the first time since 2020. (CNBC)

🍻 Want more financial news, but after the closing bell? Thousands of readers trust Brew Markets for their end-of-day analysis. I’ll handle your morning dispatch, and you can wrap up your afternoons with Brew Markets from Morning Brew — sign up free.

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About me

📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

I write our flagship newsletter to prepare you for each trading day, unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else. Feedback? Reply to this email, ping me on X @philrosenn, or write me directly at phil@openingbellmedia.com.