The verdict from markets is in: We don’t want a trade war!
In the last few days, stocks have tanked, volatility has surged, gold has rebounded, and the dollar has declined. Treasury yields have also plunged.
Today’s MoneyShow Chart of the Day shows the year-to-date percentage change in the SPDR S&P 500 ETF Trust (SPY), SPDR Gold Shares ETF (GLD), iShares 20+ Year Treasury Bond ETF (TLT), Invesco DB US Dollar Index Bullish Fund (UUP), and the iPath ETN S&P 500 VIX (VXX). The volatility-tracking VXX is now UP 15% on the year, while the SPY is now down around 2%. Gold has risen almost 11%, while the dollar ETF has lost 1.4%.
SPY, GLD, TLT, UUP, VXX (YTD % Change)
Data by YCharts
Meanwhile, the 3-month/10-year Treasury yield curve has re-inverted. Plus, the 2-year/10-year curve has been cut in half (to as low as 20 basis points from around 40 at the beginning of 2025). Curve inversions are a slowdown/recession warning sign, one seen ahead of many downturns in the 21st and 20th centuries.
The Trump Administration will argue this is “necessary” pain as part of a rebalancing process for global trade and the US economy. That’s what Treasury Secretary Scott Bessent tried to do on Tuesday.
But this is a TRADING column. Personal politics don’t matter. Markets do.
The message they’re sending out is clear: The actions being taken are negative for risk appetite, growth, and asset prices. So, be sure to factor that in if you’re trading stocks, bonds, currencies, or precious metals.
