Gold, oil surged on Trump’s Iran bombing threat; Dow recovered

·       But Wall Street Futures again slip early Tuesday as Trump may impose universal 20% tariffs on all US imports on Liberation Day April 2

·       The market is still expecting Trump may delay the implementation of his tariff threat to July 1, providing a 3-month window for trade deal negotiation

On Friday, March 28, 2025, Wall Street Futures tumbled on Trump’s trade war uncertainty as the so-called US Liberation Day 2nd April is approaching fast for the imposition of Reciprocal tariffs for the return of the Golden Age in America. Also, stalled US core disinflation, surging US inflation expectations and plunging US consumer confidence dragged Wall Street for a potential stagflation or even Trumpcession. Although the report of EU trade concessions for Trump briefly helped stocks, it was short-lived as Trump reiterated auto and reciprocal tariffs in his public comments.

But Trump may be now sounding less hawkish as the so-called Tariff Liberation Day approaches fast (April 2), When Trump will announce reciprocal tariffs on the rest of the world, for abusing the US decades after decades. But as all his tariffs will be paid by US importers and eventually borne by American consumers-Trump is already sounding conciliatory and less hawkish late Friday when boarding Air Force One. When one journalist pointed out about huge fall of Dow Jones by over 700 points, Trump pretended not to hear but looked dejected.

On late Friday, March 28, Trump said:

·       I am willing to make deals on auto tariffs

·       Deals on averting auto tariffs would come later

·       I will be announcing pharma tariffs soon

·       I've always loved Canada

·       Will Continue Bombing Yemen For A 'Long Time'

Fast forward, on late Monday (March 31), Trump said:

·       Big event approaching

·       I have not investigated running for a third term

·       They say there is a way I can do it

·       We will reach 5 trillion dollars of investment in the United States soon; to have more investments very shortly.

·       Trump reiterates he wants tax deduction on auto interest (needs Congressional approval)

·       Deduction Would Be on Cars Made in the United States

·       Tariffs will be mutual, but we will be more pleasant

·       You will see in two days-- maybe tomorrow night or Wednesday

·       We are relatively lenient on tariffs, we will be very kind

·       Trump confirms meeting with Stellantis chairman

·       Stellantis chairman requests no pause on tariffs

·       The 2020 standard would apply to environmental regulations

·       Trump brings back 2020 tailpipe emission standards

·       Auto Dealers Taking Advantage of Month-long Reprieve

·       I want to meet Putin

·       Wants Putin to make a deal

·       Wants to ensure Putin follows through

·       I believe Putin will follow through

·       I plan additional tariffs on Russia if it fails to fulfill the task

·       No desire to implement additional tariffs on Russian oil right now, but will impose additional tariffs on Russian oil if necessary

·       Zelenskyy attempts to renegotiate rare earths agreement

·       NATO was never discussed with Ukraine

·       We are 'going to be nice' on tariffs

·       I can extend TikTok if I want

·       I attribute some of my electoral victory to TikTok

·       TikTok deal could relate to China tariffs

·       I could use TikTok for that

·       A lot of countries will eliminate tariffs against us

·       Not Concerned Tariffs Will Push Allies Toward China

·       TikTok deal might link to China tariffs

·       I could utilize TikTok for that

·       I settled on tariffs a long time ago

·       The Saudi Arabia trip could be next month

·       Trump Warns Iran Of Unprecedented Bombing Campaign If Nuke Deal Not Reached

·       Trump Says 'Couldn't Care Less' If Foreign Auto Makers Raise Prices Due To Tariffs

·       Trump threatened Russia with new tariffs on oil products if Moscow blocks his cease-fire plan.

·       May even block completely any Russian oil export if Putin does not agree to the Ukraine war cease-fire

·       US to purchase a large number of icebreakers from Finland

·       I'm angry and pissed off at Putin

·       I will put secondary tariffs on all Russian oil if unable to make a deal on Ukraine.

·       News he plans to speak with Putin this week

·       Such a tariff on Russian oil would range from 25%-50%

·       Trump threatens bombing and secondary tariffs on Iran if Tehran does not make a deal on its nuclear program with the US

·       US and Iranian officials are talking

·       Putin's comments on Zelenskyy were not going in the right direction

·       NBC News asked about a possible scenario in which Vice President JD Vance would run for office (in 2029) and then pass the role to Trump. Trump responded that “that’s one” method

·       Trump won't rule out 3rd term, says there are ways to do it

·       Trump 'Very Angry' & 'Pissed Off' At Putin, Threatens New Tariffs

·       I am annoyed with Putin,

·       Trump threatens 'secondary tariffs' on Russian oil

·       Trump is planning to travel to Saudi Arabia in mid-May

·       Making progress on Russia and Ukraine

·       To decide on additional tariffs on Iran, BUT not currently implementing them.

·       Tariffs to commence with all countries

·       So far, avoided imposing additional duties on Russia

·       The deal on TikTok;

·       Trump does not think he is going to go back on his word

·       Trump hasn't heard about limiting tariff actions

·       Trump weighs broader, higher tariffs; Across-the-board hike of up to 20% considered.

On Monday, Trump also posted on Truth and Twitter:

The Iran-backed Houthi Terrorists have been decimated by the relentless strikes over the past two weeks. Many of their Fighters and Leaders are no longer with us. We hit them every day and night — Harder and harder. Their capabilities that threaten Shipping and the Region are rapidly being destroyed. Our attacks will continue until they are no longer a threat to Freedom of Navigation. The choice for the Houthis is clear: Stop shooting at U.S. ships, and we will stop shooting at you. Otherwise, we have only just begun, and the real pain is yet to come, for both the Houthis and their sponsors in Iran.”

In two months, there has been more Private Investment spoken for, and/or committed to, than in four years of the Sleepy Joe Biden Administration — A fact that the Fake News hates talking about!

There will never have been a transformation of a Country like the transformation that is happening, for all to see, in the United States of America. Companies are pouring into our Country at levels never seen before, with Jobs (and Money!) to follow. It is a beautiful thing to watch!”

Overall, between March 28 and April 1, 2025, US President Trump made several notable statements and policy proposals:

Anger (Frustrations) Towards Putin Over Ukraine

On March 30, Trump expressed significant frustration with Russian President Putin regarding the ongoing conflict in Ukraine. He threatened to impose secondary tariffs ranging from 25% to 50% on countries purchasing Russian oil if Moscow obstructs efforts to negotiate a peace deal. This move aims to pressure Russia into cooperating to end the three-year war in Ukraine.

Contemplation of a Third Presidential Term (bypassing the US Constitution)

In a recent NBC News interview, Trump suggested the possibility of seeking a third presidential term, despite the 22nd Amendment's clear prohibition of more than two terms. He hinted at potential ways to extend his presidency, reigniting debates about constitutional limits and democratic norms.

Renewed Interest in Acquiring Greenland

Trump has reiterated the strategic importance of the United States gaining control over Greenland, citing security concerns related to China and Russia in the Arctic region. Vice President JD Vance's visit to Greenland underscored this interest, with discussions about Greenland's potential independence from Denmark and closer ties with the U.S., which is seeking to control Greenland’s vast untapped reserve of natural resources (fossil fuels), rare earth materials and also strategic sea transportation route.

Tariffs and "Liberation Day" (April 2, 2025) 

Trump repeatedly emphasized April 2, 2025, as "Liberation Day," a term he used to describe the implementation of significant tariffs aimed at reshaping U.S. trade policy. On March 26, he announced a 25% tariff on all cars shipped to the U.S., effective April 2, signaling a major escalation in his trade war strategy. By March 29, he suggested these tariffs could expand further, including targeting pharmaceuticals to bring industry back to the U.S. Trump expressed indifference to automakers raising consumer prices due to these tariffs, stating he "doesn’t care" if prices increase as long as production shifts to the U.S. Trump also hinted at flexibility, noting on March 29 aboard Air Force One that he might "cut deals" with countries like the UK after tariffs are imposed, though not before the April 2 deadline.

Foreign Policy Threats 

Trump escalated rhetoric on international conflicts. On March 31; he was "angry and pissed off at Putin" and threatened Iran with bombing "the likes of which they have never seen before" if they didn’t agree to a nuclear deal. This aligns with his administration’s actions, such as ongoing strikes against Iran-backed Houthi forces in Yemen, which he commented on via Truth Social on April 1, claiming their capabilities were being "decimated."

Trump’s Truth Social posts early on April 1 focused on two themes: the success of military strikes against the Houthis and the economic boom he attributes to his policies. He described relentless strikes that have "decimated" Houthi fighters and leaders, and he framed the U.S. as undergoing a historic economic shift due to incoming corporate investments.

Trump’s Third Term Speculation: This echoes earlier controversial remarks but lacks concrete policy backing in the provided data, suggesting it may be more rhetorical than actionable given U.S. constitutional limits.

Russian Relations: Trump's threats of tariffs on Russian oil have raised concerns among global leaders about escalating economic tensions and the potential impact on international trade.

Domestic Politics: His contemplation of a third term has sparked debates about constitutional boundaries and the resilience of democratic institutions.

Trump’s Economic Transformation  for the US

On April 1, Trump posted on Truth Social about an unprecedented "transformation" of the U.S., claiming companies were "pouring in" with jobs and money following his policies. He also touted private investment surpassing Biden’s four-year total in just two months. Trump’s tariff threats helped him to garner an investment commitment of almost $4 trillion in the first two months of his Presidency (2nd term), which may increase to around $5 trillion in the next few months.

Trump’s Economic Policy: Tariffs as a Central Strategy 

Trump’s comments reflect a consistent push for protectionism, building on his first-term approach but with heightened aggression. The 25% auto tariff and potential pharmaceutical tariffs aim to force manufacturing back to the U.S., aligning with his "America First" narrative. However, his indifference to consumer price hikes suggests a gamble—prioritizing long-term gains over short-term pain. News reports from March 29 note market unease, with stock selloffs tied to tariff anxiety, indicating economic risks he’s willing to take, at least publicly.

The "Liberation Day" framing is theatrical, consistent with Trump’s penchant for dramatic branding, but his mixed signals (e.g., openness to post-tariff deals) suggest tactical flexibility amid global pushback from allies like Canada and Mexico, who plan retaliatory tariffs after April 2.

Trump’s Foreign Policy: Escalation and Leverage 

Trump’s threats against Iran and Russia, paired with ongoing Houthi strikes, signal a return to a muscular, unilateral foreign policy. His April 1 comments on the Houthis show confidence in military outcomes, though the broader strategy—especially on Iran—remains vague beyond intimidation. This aligns with his March 4 address to Congress, where he pushed for a Ukraine peace deal and flexed U.S. power globally, but it risks alienating allies and escalating tensions without clear diplomatic follow-through.

Political Posturing: Third Term and Transformation 

The third-term comment, while legally dubious under the 22nd Amendment, feeds into Trump’s narrative of indispensability, likely aimed at energizing his base. His April 1 economic boasts amplify this, painting his presidency as uniquely transformative, although the reality is that Trump is flexing his tariff muscle to force companies to build production bases in the US, but due to a lack of Chinese-type manufacturing infra/ecosystem, it may not match Chinese efficiency and price for quality/value.

Trump announced that reciprocal tariffs will target "all countries," indicating a broad approach rather than focusing solely on nations with significant trade deficits with the U.S. This move is part of Trump's "America First Trade Policy," aimed at revitalizing U.S. manufacturing by imposing tariffs on countries that impose higher import duties on American products. The tariffs are set to public on April 2, 2025, which Trump has labeled "Liberation Day". Trump's tariff policies have raised concerns about economic stability, and both Wall Street and Main Street fears of Trumpcession increasing. His trade policies have strained relationships with U.S. allies, potentially undermining the Western alliance framework, and providing China an advantage. China, Japan and South Korea are now planning to give a proper response to Trump tariffs jointly.

Trump mentioned that he is not contemplating a third term but acknowledged that some people have urged him to pursue it. He noted that there are ways to serve a third term, though this would require constitutional changes, which is not possible for him at this moment because it requires a 2/3rd absolute majority in the US Congress, which Trump OR the Republican Party does not have. The U.S. Constitution limits a president to two terms, so any attempt to serve a third term would need significant legal or constitutional changes.

Trump threatened Iran with "bad things" if it did not reach a nuclear deal with the U.S. within two months. This stance reflects Trump's aggressive approach to international diplomacy, particularly concerning sensitive geopolitical issues like nuclear proliferation.

Trump and the new Canadian PM Carney agreed to negotiate a new economic and security relationship after Canada's elections.  This indicates ongoing efforts to redefine trade and security ties between the U.S. and Canada, potentially under the United States-Mexico-Canada Agreement (USMCA).

In summary, Trump’s recent comments reveal a dual focus: aggressive economic nationalism via tariffs and a hardline foreign policy stance. His rhetoric blends bold promises with calculated ambiguity, maintaining pressure on adversaries and markets alike. While he touts a transformative presidency, the lack of detailed evidence in the data leaves room for skepticism—success hinges on execution, not just proclamation. As April 2 looms, his "Liberation Day" will test whether this approach delivers or destabilizes. Trump's leadership style continues to be unpredictable, with policies often being announced and then adjusted or reversed, contributing to economic uncertainty.

On Monday, the WH Press Secretary Leavitt said:

·       Trump's tariffs will end unfair trade practices and will ensure reciprocity

·       Trump is also focused on extending tax cuts

·       Rose garden event on Wednesday for the Trump tariff plan, the Cabinet will attend

·       Trump to announce tariffs at the Rose Garden event on April 2nd

·       US Treasury Secretary Bessent, Trump Trade Adviser Navarro, and Miller consulted with Trump on tariffs

·       President Trump has said he's committed to sectoral tariffs

·       Leavitt asked about tariff exemptions for farmers: There are no exemptions at this time

·       Any country that has treated the US unfairly should expect to receive a tariff

·       President Trump will get into the tariff specifics in the announcement

·       President Trump is committed to the tariffs

Meanwhile, the Fed continues to be in suspense over Trump’s tariff plans

On Monday, Fed’s Williams said:

·       It's early days in figuring out the impact of tariffs. There is still a lot of uncertainty around tariffs, the details matter

·       I want to watch data to see the impact of tariffs on prices

·       Tariffs will impact prices

·       The full impact of tariffs can play out over a long horizon

·       We need an open mind on how long tariff impacts will last

·       Consumer goods should see a quick pass-through from tariffs

·       Intermediate goods could see a slow impact from tariffs

·       I forecast that inflation will be relatively stable this year with upside risks

·       My baseline view is inflation will be relatively stable

·       Uncertainty is very high right now, there are more concerns about a slowing economy

·       Growth and inflation risks are both very important

·       I will not predict the odds of recession, the economy is currently very solid amid a good job market

·       The economy right now is in a very good place

·       I won't discount weak survey and anecdotal data

·       Uncertainty appears to be impacting behavior

·       The Fed will not allow high inflation to take root

·       The economy does not have stagflation right now

·       I expect the economy will continue to grow, but slower than last year

·       The Fed can collect more information before changing policy

·       I do not know exactly where monetary policy needs to be over the remainder of the years

·       The Fed needs to keep longer-run inflation expectations anchored

·       Long-term inflation expectations are well-anchored today

·       Fed balance sheet drawdown slowdown was the natural next step

On Monday, Fed’s Barkin said:

·       It's going to take a while before we get clarity on tariff impact

·       My base case is that it takes a while for tariff clarity

·       Suppliers are emboldened and say they will have to pass on higher prices

·       Consumers say they are tired of paying higher prices

·       I am not convinced higher prices won't be passed on, or that there won't be inflation

·       To cut rates, you need confidence in inflation

·       There is a risk of inflation being higher than Fed forecasts

·       1970s stagflation was characterized by out-of-whack inflation expectations; not seeing that now

·       Data right now is okay, there is a risk on the employment side

·       I see some risk on the employment side from tariffs

·       This is not a time for me to say how many rate cuts I have penciled in for this year

·       Now is not a time for forward guidance on policy

·       I'm nervous about inflation and employment

·       I am in no hurry on rate cuts

·       Balance sheet run-off could be slower, for longer

·       It’s going to take a while before we get clarity on tariff impact

Overall, Fed’s Williams is less skeptical than Barkin, but the Fed is now preparing the market for only one rate cut in December’25, if such Trump tariff uncertainty goes on without affecting the employment situation too much; the projected June’25 Fed rate cut is still uncertain.

Almost all major global central banks including the ECB are concerned about the Trump tariff tantrum

On Monday (March 31), ECB’s President Lagarde said:

·       Trump's trade measures will hurt global growth

·       Trump's tariffs policy would lower Eurozone growth by at least 0.3%

·       Any ensuing trade war would be a lose-lose scenario

·       We may need to work on making decisions in Europe on a qualified majority basis, given the current new dynamics with Trump.

·       We're almost at our inflation target.

Overall, the ECB may be also now preparing the market for lower rate cuts in 2025 by a cumulative 50 bps rather than 100 bps amid Trump policy uncertainty and synchronized economic slowdown on both sides of the Atlantic.

Conclusions

Trump may sound less hawkish on Liberation Day, April 2 about Reciprocal Tariffs; all proposed sectoral tariffs including auto and even metals may be postponed by three months to pave the way for intense negotiations and concessions.

Although Trump may announce pharma and other sectoral tariffs of 15-25% by 2nd April Liberation Day, he may defer the implementation day by at least three months to 1st July to keep the negotiation window open. Trump now wants some trade concessions and also kept the negotiation window open. And almost all major trading partners are now ready to negotiate with Trump after seeing the 25% auto tariffs tango. The EU and India are already discussing potential concessions for Trump to avoid an all-out trade war.

Trump is insisting on Sectoral & targeted tariffs on metals, automobiles, pharmaceuticals, semiconductors, lumbers, and dairy products; but he may postpone the actual implementation of the same as a negotiation tactic to get maximum concessions from trading partners including ‘Tariff King’ India and ‘Mini China, but worse than China’ EU. Trump is repeating that most of the US trading partners have taken advantage of the US for decades after decades about tariffs and other business regulations and ripped off the US. Now it’s time for the US to be liberated from such tariff bullying on Liberation Day April 2. Trump plans to impose reciprocal tariffs on such countries that are ripping off the US for decades after decades and India is one of them as a major trading partner.

On April 2 Tariff Liberation Day, although Trump will announce sectoral and country-specific tariffs, he may postpone the effective implementations of all of his planned tariffs including auto, metals, other sectoral and also any country-specific reciprocal tariffs to at least 1st July to pave the way for trade negotiation rather than protracted confrontations.

Typically, U.S. tariffs take effect 30 days after the official announcement. However, this timeline can vary based on the specific tariff measure and the legal process involved.

·       If Trump imposes new tariffs through an executive order, they might take effect immediately or within a short period.

·       If tariffs are implemented through the U.S. Trade Representative (USTR) under Section 301 (like previous China tariffs), a formal review process could delay implementation beyond 30 days.

Market Wrap:

On early Monday, March 31, 2025, Wall Street Futures tumbled on Trump’s reciprocal tariffs uncertainty but soon recovered as Trump may blink again and delay the actual implementations of the same. And Trump may sound less hawkish than being expected on the US Tariff Liberation Day.

On Monday, Wall Street closed mixed as the broader S&P 500 surged 0.5%, while the blue-chip Dow (DJ-30) climbed 417 points but, tech-heavy the Nasdaq-100 edged down 0.2%. Wall Street was boosted by consumer staples, financials, utilities, materials, energy, health care, real estate, industrials, communication services, and selected techs, while dragged by consumer discretionary. Trump’s less hawkish tone on tariffs, especially on China boosted the real economy and China-savvy stocks, but the EU’s threat of digital/google tax dragged some techs.

On Monday, Dow Jones (DJ-30) was boosted by defensive scrips like Walmart, Sherwin, Home Depot, Visa, Apple, IBM, Coca-Cola, McDonald’s, Amgen, and United Health, while dragged Boeing (lingering production and quality issues), Amazon, NVIDIA (tariff issue and Chinese export restrictions on AI chips), Microsoft and Caterpillar. US Automakers saw mixed moves, as Tesla slid again, while GM and Ford surged on the progress of trade talks between the US and Mexico.

For March’25, the S&P 500 tumbled 5.8%, its worst monthly drop since December 2022, while the Nasdaq lost 8.2% and the Dow declined 4.2%. For the quarter, the S&P 500 slid 4.6%, ending a five-quarter win streak. The Nasdaq dropped 10.4%, its steepest quarterly decline since Q2CY2022, while the Dow fell 1.3% in Q1CY2025.

Gold surged Monday on Trump’s Iran bombing threat, slow progress on the Ukraine ceasefire deal, China’s Taiwan ‘invasion plan’ in 2027 and the growing concern of Trumpcession and Trumpflation. Oil also jumped on Trump’s Iran war rhetoric and secondary tariffs on all Russian oil exports (for any country) if Putin does not agree to Trump’s Ukraine ceasefire deal.

On early Tuesday, April 1, 2025, Wall Street Futures slipped after a WAPO report indicating Trump's team may have drafted a proposal to impose tariffs of around 20% on at least most imports to the country. On Monday evening, two administration sources familiar with the matter said Trump has been presented with "multiple" options and may not make his final choice until the morning of the April 2 Liberation Day announcement. Trump has said that he will not negotiate with other countries on Wednesday's tariffs until after they take effect. Trump has repeatedly suggested the tariffs would be "reciprocal" in direct proportion to those levied by foreign countries on US exports and indicated that many countries would not be included in the import duties.

Meanwhile, on Tuesday, European Commission President Ursula von der Leyen (VDL) warned

·       Although "Europe did not start this confrontation," the union was ready to take strong measures against the US levies.

·       We do not necessarily want to retaliate. But if it is necessary, we have a strong plan to retaliate and we will use it.

·       Our objective is a negotiated solution.

·       But of course, if need be, we will protect our interests, our people, and our companies.

·       But tit-for-tat tariffs would only increase inflation, contrary to the bloc's intended goals.

Weekly-Technical trading levels: DJ-30, NQ-100, and Gold

Looking ahead, whatever the fundamental narrative, technically Dow Future (CMP: 42300) now has to sustain over 42500 for a further rally towards 42700/42900-43200/43500 and 43700/44050 and 44250/44400-44500/44800 and 45000/45200-45300/45500 and even 45700/45800-45900/46000 in the coming days; otherwise sustaining below 42400, DJ-30 may again fall to 42000/41500-40900/39500 and 38700-36100 in the coming days.

Similarly, NQ-100 Future (19900) has to sustain over 20200-21050 for a further rally to 21300/21500-21700/21850 and 22050/22200-22350/22500 and 22700/23000-23300/23500 in the coming days; otherwise, sustaining below 21000, NQ-100 may again fall to 20900/20600-20400/20150 in the coming days.

Also, technically Gold (CMP: 3060) has to sustain over 3035/3065 and 3075-3100 for a further rally to 3125/3150-3200/3225; otherwise sustaining below 3065-3065-3045, Gold may again fall to 2990 and 2965/2925-2900/2880 and 2850/2835-2810/2780-2780 and 2745/2725-2695/2665 and further 2635/2600-2585/2560 in the coming days.