Investors look for future paths
The global market has calmed down from “Yippy.” Stocks in Asia and Europe are mostly high this morning, with the dollar showing signs of life.
But business leaders and consumers still control the aftermath of President Trump's trade war, but many investors are sour in the US. (Just: Beijing escalated a clash with Washington, ordering Chinese airlines to stop delivering new Boeing Jets.)
The latest Trump administration answer: Refocus on the message.
Where Things Stand: Trump's Give-and-Take customs strategy was on display on Monday. The president signaled that he would consider exemptions from auto parts. This recalls production back to the US saying, “They need a little time,” but repeats that chips and drug collections have come.
Car inventory has been collected in the news. But Nvidia, the chip giant, which has become the latest tech giant to pledge a major domestic spending initiative, fell on Tuesday in pre-market trading.
Trump's target policies have pushed some traders to the brink. Global investors have dumped US stocks in record clips over the past two months, according to the Bank of America Investor Survey, released this morning. They also fear tariffs that will sink the global economy.
Fed officials and CEOs are increasingly sharing concerns about these recessions.
Goldman Sachs' David Solomon never mentioned “customers” on Monday on the bank's revenue call, but warned that the possibility of a recession is increasing. On the bright side, market volatility has boosted the great profits of Wall Street trading desks, including Goldman.
LVMH warned that even customers with heels are pulling back purchases. Its shares fell sharply along with most sectors on Tuesday as the luxury giant warned that trade war uncertainty might force prices to rise.
Atlanta Fed President Rafael Bostic said businesses face a “fog” of uncertainty regarding changing tariff policies and “putting the economy in a position of a major suspension.” His Take: The Fed needs to slow down interest rates.
What Trump officials say: Kevin Hassett, director of the National Economic Council, has alleviated the fear of the recession. And Treasury Secretary Scott Bescent said there was “no evidence” that foreign countries are dumping Treasury bills and bonds.
The White House, Bescent added, has a “strong dollar” policy despite Trump's long-standing complaints about its impact on exports. (Details of the dollar below.)
Notably, Bessent threw his support behind the Fed. The Treasury Secretary said he meets Federal Reserve Chairman Jay Powell every week to inform him that the administration and central bank relationship is solid. “I believe monetary policy is a jewellery box that must be preserved,” he told Bloomberg TV, playing concerns that the White House might try to put pressure on lower fees.
Bessent added that it will begin interviewing candidates in the fall and will begin interviewing candidates in the fall, replacing Powell, which will end next year.
Dealbook wants to hear from you
I'd like to know how tariffs are affecting your business. Have you changed your supplier? A low price negotiated? Have you suspended your investments and employment? Have you planned to move manufacturing to the US? Or did you help your business? Please tell me what you are doing.
This is what's going on
Rep. Marjorie Taylor Greene has revealed that he traded stocks and bonds prior to the customs rally. Georgia Republicans bought stocks ranging from $21,000 to $315,000, and sold Treasury debt the day before President Trump ordered a 90-day delay in tariffs, prompting a surge in the market. That's how Democrats like Massachusetts Sen. Elizabeth Warren are asking people on Trump's orbit. (The Trump administration has denied that there were illegal transactions.)
The Trump administration opposes the Supreme Court twice in one day. The White House refused an order to bring back Kilmer Armando Abrego Garcia, an immigrant from Salvadora who was accidentally deported. At an oval office meeting with President El Salvador on Monday, Secretary of State Marco Rubio said “US courts do not have the right to implement US foreign policy.” The White House also refused to admit journalists from the Associated Press to an oval office event, violating another Supreme Court order.
Netflix is reportedly pursuing a $1 trillion valuation. The streaming giant internally shares an ambitious five-year plan to raise stock prices by making huge profits from advertising sales. However, achieving this requires a significant increase in global subscribers amidst the uncertainty of the trade war.
A playbook for Trump appears
In the first major challenge to President Trump's pressure campaign on higher education, Harvard rejected the administration's latest demands, calling it a violation of the agency's initial right to amendment.
“No matter which party is in power, we should not decide what private universities can teach, who can be recognized and hired, or which areas of learning and research can be pursued,” Harvard President Alan Gerber said in a statement.
That's another important responsibilities for Trump after law firms like Perkins Koy sued the administration over an executive order that would disrupt the ability to represent clients. Emerging is a playbook for how to stand up to the Trump White House.
Catch up: The president is targeting major universities for what he says is inadequate to combat discrimination like anti-Semitism. In Harvard's case, the administration is issuing requests that include sharing all employment data and overhauling faculties and schools such as medical schools.
After Harvard rejected those requests, White House officials said Monday that the government would freeze $2.2 billion grants to Harvard along with a $60 million contract. Last month, the administration said it was investigating about $9 billion in federal grants and contracts from universities.
Part of the legal world has already taken over Trump. When Perkins Koy sued the Trump administration, the country's 10 big corporations did not support the fight by revenue, but more than 500 people signed a court summary in favor of the lawsuit.
It highlights new disparities among law firms. Paul Weiss created a template for his settlement with Trump by agreeing to provide pro bono services to the causes that other major companies follow.
Similar disparities are emerging among universities. Last month, Columbia agreed to major concessions after the Trump administration stripped its $400 million in federal funds. However, Princeton's president recently opposed the administration's threat of withholding federal money.
Some of the key players in the Harvard match have connections with Trump. The lawyers behind the school's response are William Burg of Kin Emmanuel and Robert Herr of King and Spalding. Hart worked for the Justice Department under the first Trump administration to investigate the handling of classified materials.
Burck also represented Trump's business organization and advised Paul Weiss, who negotiated with the White House.
Zuckerberg in the stand
Mark Zuckerberg used the first day of testimony in the FTC's antitrust test against Meta to undermine the government's efforts to dismantle his technological giant.
Basic Thrust: The meta competition is much greater than what the FTC says.
Meta doesn't just connect friends and family, Zuckerberg testified. That's the core of the company, but he said the focus of the FTC case where Meta illegally robs other social networking options from consumers was ultimately on the business of “learning about the world, learning about the world, discovering what's going on.”
Meta's lead lawyer Mark Hansen added that he is facing strong competition, particularly with Tiktok. (One proof point: When Tiktok was temporarily banned in the US in January, he said that Facebook and Instagram had a surge in usage.
“This case is a grab bag of FTC theory in war with facts and war with law,” Hansen said. He also called the definition of agency in the social media market “Gerrymandering.”
Zuckerberg also tried to play an old email between him and Li. When asked about the 2012 email that discussed Instagram purchases but did not add any new features, Zuckerberg said it represented “relatively early thinking.” He noted that his team ultimately invested a lot in the photography and video app. (Marketer, a marketing company, estimated in December that Instagram represented more than half of Meta's US ad sales.)
What the commentator says:
“The government's cases are carefully designed to traverse the issues of Tiktok's impact on the market,” writes Martin Pier of Information.
“The idea that the meta feed has expanded beyond the origins of historic friends and family should resolve the facts,” writes platformer Casey Newton.
The dollar continues to decline. it's complicated.
The US dollar is usually considered heaven during turbulent times. However, since January, it has fallen by about 8% against other major currencies. And the benchmark 10-year U.S. Treasury yield rose to around 4.5% from under 4% last week.
The dollar and the Treasury usually thrive when stocks squeal. It led to a lot of chatter about whether global investors were being pulled back from the US, or whether it was more technical, such as basic trade and sales by foreign governments. Sarah Kessler spoke with John Canavan, the chief analyst at the advisory firm Oxford Economics, about how to understand the discussion.
The interviews were edited and condensed.
What do you think about what's going on now? Is the US losing its brand as a shelter?
That's a concern, but it's not an emergency. We have already begun to acknowledge some of these risks and concerns, which has eased some of the pressure.
US economic strength, US asset markets and US Treasury size and liquidity: all of these allow the US to remain an important source of safe supply in the world, if not the only source of the past.
What do you need to change to think that's an emergency?
Global markets are interconnected. There's no way to get around that completely. If we keep ourselves out of the world more importantly, I think it's when it starts to become a little more emergency for the dollar and finances.
Treasury Secretary Scott Becent said the bond sale could be attributed to large investors seeking to cover the losses. How plausible is this?
There have been many talks and speculation about the rewinding of base transactions being partially responsible for what we have seen, but data released by the CFTC on Friday strongly suggested that this is not a rewinding of base transactions.
As can be seen in the data, evidence of base trading was a very large and growing short foundation in the future of the Treasury among leveraged investors, and a long, growing position in the large and growing Ministry of Treasury futures by asset managers. And in fact, these positions have grown to the point that it is expected that trade will be unwinded until last Tuesday.
The new data really helped me reinforce the fact that I don't know who's selling and why. I'm not sure I'm not a foreign investor. Certainly there is no evidence to know in any way.
Speed is read
transaction
Politics, policy, regulation
Best remaining
I want feedback! Please email your thoughts and suggestions to dealbook@nytimes.com.
