Market Pulse with Dan Sheehan

Good Morning Investors,

After one of the most extraordinary market sessions in over a decade, investors are catching their breath. Yesterday wasn't just a good day for markets—it was one for the history books.

On the back of President Trump's 90-day tariff pause, the S&P 500 exploded higher by over 9.5%, notching its best session since 2008 and its third-largest gain in a single day since World War II. The Nasdaq Composite soared a staggering 12%, its second-biggest single-day gain ever and largest since January 2001. The Dow rocketed nearly 3,000 points, posting its largest percentage jump since March 2020. Nearly 30 billion shares changed hands—the highest trading volume in 18 years of record-keeping.

This was a textbook rally born from extreme pessimism, peak volatility, and a single policy pivot that removed the worst-case scenario from the table—at least temporarily. As I've consistently said over the past few weeks, these periods of extreme fear often offer the best long-term buying opportunities. Yesterday was a case in point.

This morning, futures are giving back some of yesterday's gains. S&P 500 futures are down about 1.8%, the Nasdaq is off 2.3%, and the Dow is down roughly 1.4% (about 500 points). Leading the pullback are some of yesterday's winners—Apple and Tesla each down more than 3% in premarket trading after double-digit gains yesterday.

Overseas, Asia closed firmly higher with China, Hong Kong, and Japan extending their rallies. European markets opened slightly mixed after a massive relief bounce yesterday. The 10-year Treasury yield is holding steady near 4.3% after spiking as high as 4.5% pre-pause, with bond markets stabilizing following the wild swings of earlier this week. The dollar softened modestly, and gold extended gains. Oil remains under pressure amid fears of a China-led slowdown and trade-linked demand hits.

Today, investors will focus on March U.S. consumer price data and the weekly jobless claims report. Several Fed officials are also scheduled to speak, which could provide further clues on policy outlook.

Yes, it's still a headline-driven market. The 90-day reprieve gives breathing room, not a resolution. The pause in tariffs gives global leaders room to negotiate, with the EU following suit with its own 90-day delay on retaliatory measures—a positive sign that diplomacy remains on the table.

But make no mistake—this is a narrow window, and the stakes remain high. Most of the world just got a stay of execution on tariffs—but China did not. Beijing's retaliatory 84% tariff and Trump's 125% counter on Chinese goods underscore that the trade war's center of gravity has narrowed to a direct U.S.–China confrontation.

The impact is already rippling through supply chains. Chinese companies that sell products on Amazon are preparing to hike prices or exit the U.S. market altogether. Apple reportedly chartered cargo flights to ferry 600 tons of iPhones (potentially 1.5 million devices) from India to the U.S. in an effort to beat the tariffs. U.S. import bookings on container ships dropped 64% in early April compared to late March as companies await clarity.

Still, this is the window I've been anticipating. In March, I said I believed tariffs would not be in place by the end of Q3—and that Trump's aggressive posture was more about leverage than permanence. When asked about the pause, National Economic Council Director Kevin Hassett acknowledged that bond market turmoil added "a little more urgency" to the decision, suggesting that markets are indeed influencing policy.

Let's be clear: we'll see more swings. Yesterday was likely not the final bounce, nor will today's red open be the last pullback. But the structure of this tape is shifting.

Defensives like healthcare are catching bids. Tech is proving it can still lead when sentiment shifts. Despite concerns over supply chains, Big Tech led yesterday's rally with Nvidia soaring over 15%, Tesla adding 17%, and Apple, Amazon, and Meta all up about 10%. These companies with long-term growth engines—AI infrastructure, digital platforms, and cloud-driven models—are being revalued quickly when the fog clears.

That's why I continue to back names like Nvidia, Google, IGV, and Amazon for long-term investors. These are businesses built to compound, not trade on noise. The volatility may shake the branches, but the root systems are strong.

Let's not forget what's driving markets at a fundamental level. March inflation data (pre-tariffs) coming today is expected to show continued moderation. The Fed remains cautious but aware of the risks. Earnings, while mixed, are not collapsing. And sentiment—until yesterday—had been deeply pessimistic. Those are the ingredients that often mark long-term inflection points.

As Piper Sandler's chief investment strategist Michael Kantrowitz noted yesterday, "While uncertainty isn't headed to zero, the worst-case scenario is off the table most likely." That's precisely the kind of setup that creates opportunity.

We are not out of the woods. But this kind of market chop is exactly what typically marks bottoms, not the middle of bear markets. I maintain that investors who can stay unemotional, focused on fundamentals, and selectively add to high-quality names—particularly those benefiting from AI, digital infrastructure, or defensive growth—are likely to be rewarded.

We're still in a fragile, reactive environment—but don't let that obscure the broader setup. A month ago, the market feared uncontrollable inflation and systemic instability. Today, inflation is moderating, the Fed is watching carefully, and the worst-case trade war panic has been at least partially walked back.

If this remains a growth scare, and not a full-blown policy error, then there is still room for my March scenario to unfold: tariff relief into Q3, fiscal stimulus (possibly in the form of tax reform), and a second-half equity rally that catches the pessimists off guard.

In the meantime, stay nimble but stay invested. Panic doesn't build portfolios—discipline does.

Please feel free to reach out to me on LinkedIn or by email if you would like help navigating this market environment or have any planning-related questions.

Dan Sheehan

[email protected]

This newsletter is for informational purposes only and should not be considered as investment advice. Please consult with your financial advisor about your specific situation.