Markets Await Tariff Details

Yields fall slightly ahead of Trump’s tariff reveal. Treasurys rose again today, with yields falling 1-5 bps across a flattening curve after trading within a 6 bp range. The spread between the 2-year (3.88%) and 10-year (4.17%) yield is now 28 bps. Weaker than expected U.S. manufacturing data contributed to the decline, as concerns about an economic downturn continue to grow. Meanwhile, equities generally rose today, with the NASDAQ up 0.87% and the S&P 500 up 0.38%. Both crude and WTI oil fell slightly after a surge on Monday following President Trump’s “secondary tariff” threats against Russian oil consumers.

“Liberation Day” on deck. Ahead of tomorrow’s tariff reveal, White House Press Secretary Karoline Lavitt told reporters today that the measures will be effective “immediately.” She added that President Trump was meeting with his trade team today to discuss the plans that he described on Monday as “settled.” Trump also stated yesterday that the levies are “lower than what they’ve been charging us, and in some cases may be substantially lower.” While the announcements will provide great insight into the path forward, tariff-driven volatility is likely to continue; HSBC strategist Max Kettner said, “We doubt that ‘Liberation Day’ is going to mark the end around tariff uncertainty… we’d argue the potential is in fact higher for the 2 April deadline to introduce even more uncertainty…”

Manufacturing sector contracts in March. ISM manufacturing sector data released today showed that the manufacturing sector contracted in March for the first time in 2025. The overall index fell from 50.3 to 49, below expectations of a more muted drop to 49.5. The decline was largely driven by tariff-related uncertainty in the run up to “Liberation Day” tomorrow, when the President is expected to unveil a broad range of reciprocal tariffs. The weakness was broad based, with new orders and factory employment both declining, while prices paid increased. ISM Manufacturing Chair Tim Fiore said in today’s press release that companies are confused about the road ahead, since the White House isn’t “setting the pace,” and that U.S. manufacturing could be in for a “rough ride” the rest of the year.