Monday's Algorithmic Volatility Leads to Tuesday Futures Spike; Tariff Intrigue Just Beginning

Monday's trading was all algorithmic. If you take the labels and numbers off of Monday's charts for the Dow, NASDAQ, and S&P, you could not tell which was which. They are all identical.

As much as 90% of all trading is done by computer algorithm, reacting to headlines thrown like chum to sharks by the mainstream media. Reactions are instantaneous, which is why early Monday's action was so volatile, especially the spike from the message (most likely Bloomberg) that there would be a 90-day delay on tariffs, which Trump's people readily dismissed as the "fake news" that it was.

However detached from reality the tariff delay story was, it still managed to rip stocks higher from early losses. In a span of about 35 minutes from around 9:45 to 10:20, the S&P gained an astonishing 400 points. The Dow rose nearly 2500 points, and the NASDAQ gained 1400 points.

While most of the gains were soon erased, the stage had been set for the usual day-trading antics that played out over the course of the remaining session.

Tuesday morning has futures soaring on soothing words on tariffs and negotiations from Treasury Secretary Scott Bessent, with Dow futures up over 1,000 points, NASDAQ futures ahead by 400, and S&P futures 123 points higher.

In their generous euphoria, even gold and siver futures are higher, with gold back above $3,000 and silver above $30 an ounce, though the gold:silver ratio over 100 is totally out of whack. WTI crude oil remains depressed at around $61.50.

Even with stocks looking to rebound from last week's rout, there's nothing to suggest what happens today will turn markets around. The losses have been steep and the effect of the tariffs - outside of some countries like Vietnam, Japan, and South Korea seeking negotiations - have not yet been felt anywhere outside of Wall Street.

Stocks were overpriced to begin with. Trump's realignment of international trade just shook things loose.

The shaking, gyrations, and volatility of recent days are likely to continue for some time. Anything that occurs today could just as easily be reversed tomorrow, as President Trump has promised additional 50% tariffs on China if they don't withdraw their 34% retaliatory tariffs from last week. China has also leaked, via top-line bloggers - other options available to counter America's new-found aggressiveness.

Trade wars have only just begun. Europe seems the likely next show to drop.

Stay liquid.

At the Close, Monday, April 7, 2025:
Dow: 37,965.60, -349.26 (-0.91%)
NASDAQ: 15,603.26, +15.48 (+0.10%)
S&P 500: 5,062.25, -11.83 (-0.23%)
NYSE Composite: 17,438.64, -179.97 (-1.02%)