U.S. equity futures took a nosedive again this morning, with markets still reeling from Donald Trump's tariff announcement, which have traders whispering the dreaded words: trade war. The Dow Jones Industrial Average futures dropped 1.8%, S&P 500 futures slid 2%, and Nasdaq futures tumbled 2.1%. These tariffs have sparked retaliatory actions, sending shivers down the spines of investors worldwide.

The S&P 500 has plunged over 20% from its peak, officially entering bear market territory. In just two sessions, it has shed 10.5% of its value, wiping out nearly $5 trillion - yes, trillion - in market value, marking its worst two-day loss since the pandemic panic of March 2020.

The Nasdaq is already in bear market territory, and the Dow Jones has fallen more than 10% from its record high. Investors, in a flight to safety, are flocking to government bonds, with the 10-year U.S. Treasury yields dipping to 3.98%. There's chatter about a potential fifth interest-rate cut by the Federal Reserve this year, with traders betting on a 51% chance of a rate cut in May.

Goldman Sachs has upped the ante on recession odds, raising them to 45% from 35%. Major tech stocks are feeling the heat, with Apple down 2.8%, Nvidia off by 4.1%, and Amazon losing 1.6%.

All eyes are on upcoming economic indicators, including the consumer price index and producer price index reports, as well as the Federal Reserve's monetary policy meeting minutes. Jerome Powell had to adapt the speech he had planned for Friday to the new reality. His words are worth all the summaries in explaining the prevailing sentiment among investors. “It is becoming clear that the taxes on imported products will be significantly more extensive than anticipated,” he explained, before adding that the economic consequences will also be more extensive than expected. More extensive in the wrong direction, it goes without saying. Powell explicitly mentioned higher inflation and slower growth, before driving the point home by stating that the risk of a combined rise in unemployment and inflation is the most complicated thing for a central bank to manage.

Meanwhile, several corporate heavyweights, including Levi Strauss, JPMorgan, Wells Fargo, and Delta Air Lines, are set to unveil their financial results this week. 

The hard line adopted last Wednesday by the Trump administration on customs duties has caused a real cataclysm of confidence in economic circles, which anticipate disastrous consequences. Over the weekend, the White House confirmed its recent mantra: it will be painful in the short term, but necessary for the future prosperity of the United States. The financiers do not agree with this analysis, judging it too uncertain, even if they rally to other principles defended by Donald Trump, such as the lightening of the federal administrative block, deregulation or a better international sharing of the expenses of support for development and security.

In percentage terms, we've just gone though the fourth most terrible two-day sequence since the S&P 500 was created in 1957, according to a paper in the Wall Street Journal. Just behind events that are part of the history books: the Covid pandemic in 2020, the bankruptcy of Lehman Brothers in 2008 and the crash of 1987. To give you an idea of the significance of what happened last week, it is in the top 10 of the biggest falls of the century (we can add to the three aforementioned events the crash of 1929, again according to the WSJ).

The trend at the beginning of this week is, unfortunately, that the slide is likely to continue. The news that came thick and fast over the weekend has not reversed the trend. On the one hand, the Trump administration has hinted that some 50 countries are ready to sit down at the negotiating table with the United States to talk about tariffs. But on the other hand, the American president has sent the message that he is prepared to maintain his hard line over time. His Treasury Secretary Scott Bessent also explained over the weekend that Trump's policy aims to favor “Main Street” over “Wall Street.” Understanding the average American as opposed to the wealthy American. This implies that chaos in the markets is not a short-term concern. However, experience shows that this is often a posture: the American administration cannot afford to let its flock lose money for too long. This touches on one of the key points of the stock market debacle: the business community believes that Donald Trump's timetable is unrealistic. The supposed benefits of his policies can only take effect over a relatively long period of time. In the meantime, there could be considerable damage, even irreversible damage for some of them.

To improve the sentiment, the White House nevertheless has a few weapons left in its arsenal. Unlike during his first term, Donald Trump has used the stick before the carrot. He could now launch more consensual measures, such as tax cuts or deregulation, which would ease the pain of the financial markets and could help restore confidence.

The Asia-Pacific markets continued to plummet. The most spectacular fall was in Hong Kong, which collapsed by more than 11.5% during the session, while Taiwan lost 9.5%. Australia (-3.8%), India (-4%) and South Korea (-5%) are also in trouble. In Japan, the Nikkei 225 lost 7%. Western leading indicators continue to fall, with the Stoxx Europe 600 down 4.7%. There's high nervousness as the VIX index has crossed the 45-point mark, an extremely rare level.

Today's economic highlights: 

The week will kick off with German industrial production for the month and retail sales for the euro zone. See the full calendar here.

  • Dollar index: 102,972
  • Gold: $3,035
  • Crude Oil (BRENT): $63.9 (WTI) $60.38
  • US 10-year: 3.98%
  • BITCOIN: $76,520

In corporate news:

  • Berkshire Hathaway has denied a false rumor spread on social media and relayed by Donald Trump that Warren Buffett approves of the US president's economic policy.
  • Walmart has denied ABC News's report that it may join a group of investors to buy TikTok.
  • Maxeon Solar is setting up alternative supply chains in a context of tariff turbulence.
  • Chevron to pay $740 million to restore Louisiana coast, according to AP.
  • Tesla's head of software engineering to step down, according to Bloomberg.
  • ISS recommends voting against Bank of America CEO's compensation.
  • Universal Studios is about to conclude an agreement for the construction of a new theme park in Bedford.
  • Stonepeak Capital has acquired a 40% stake in Woodside Energy's LNG project in Louisiana.
  • ABL Bio Inc. has partnered with GSK to develop treatments for neurodegenerative diseases.
  • Horizon Robotics has partnered with Volkswagen to develop intelligent driving technology.
  • LG Energy Solution has announced a 138% increase in operating profit in the first quarter.
  • Sinopec and CATL have joined forces to build 10,000 battery charging stations.
  • Samsung Electronics expects a 21% drop in first-quarter profits due to weak sales of AI chips.
  • Toyota plans to expand its electric vehicle lineup to 15 models by 2027.

Analyst Recommendations:

  • Ally Financial Inc.: Morgan Stanley maintains its overweight rating and reduces the target price from USD 45 to USD 39.
  • American Express Company: Morgan Stanley downgrades to equalwt from equalwt with a price target reduced from USD 310 to USD 246.
  • Ameriprise Financial, Inc.: Raymond James upgrades to strong buy from market perform with a target price of USD 518.
  • Antero Resources Corporation: Gerdes Energy Research LLC upgrades to buy from neutral with a target price of USD 41.
  • Citizens Financial Group, Inc.: Morgan Stanley downgrades to equalwt from equalwt with a target price reduced from USD 54 to USD 43.
  • Cousins Properties Incorporated: Wolfe Research upgrades to outperform from peerperform with a target price of USD 31.
  • Diamondback Energy, Inc.: Citi upgrades to buy from neutral with a price target raised from USD 157 to USD 180.
  • Dollar General Corporation: Citi upgrades to neutral from sell with a price target raised from USD 69 to USD 101.
  • Eastgroup Properties, Inc.: Piper Sandler & Co downgrades to neutral from overweight with a price target reduced from USD 218 to USD 175.
  • Eaton Corporation Plc: President Capital Management Corp downgrades to neutral from buy with a target price reduced from USD 378 to USD 290.
  • Enphase Energy, Inc.: DZ Bank AG Research downgrades to sell from hold with a target price reduced from USD 65 to USD 50.
  • Eqt Corporation: Gerdes Energy Research LLC upgrades to buy from neutral with a target price of USD 56.
  • First Citizens Bancshares, Inc.: Autonomous Research upgrades to outperform from neutral with a target price of USD 2003.
  • Nxp Semiconductors N.v.: AlphaValue/Baader Europe upgrades to buy from add with a price target reduced from USD 230 to USD 221.
  • Range Resources Corporation: Gerdes Energy Research LLC downgrades to buy from neutral with a target price reduced from USD 43 to USD 42.
  • Roku, Inc.: Redburn Atlantic upgrades to buy from neutral with a target price of USD 100.
  • Saia, Inc.: BMO Capital Markets upgrades to outperform from market perform with a target price of USD 455.
  • Starbucks Corporation: Baird downgrades to neutral from outperform with a target price reduced from USD 114 to USD 85.
  • State Street Corporation: Morgan Stanley downgrades to overweight from overweight with a price target reduced from USD 132 to USD 102.
  • Us Bancorp: Morgan Stanley maintains its overweight rating with a reduced target price from USD 55 to USD 51.
  • Vertiv Holdings Co: President Capital Management Corp downgrades to neutral from buy with a target price reduced from USD 135 to USD 80.
  • Wells Fargo & Company: Morgan Stanley maintains its overweight rating with a target price raised from USD 79 to USD 80.