Closing Bell - Stocks Soar After Trump Announces Some Tariffs Paused for 90 Days 04/09/25

Episode Date: April 9, 2025

Stocks record one of the best sessions on record after President Trump announced a 90-day tariffs pause on some countries. Our Eamon Javers gives the latest developments out of the White House and Trump’s policy stance. Dan Niles of Niles Investment Management talks the market surge and where tech fits in. More market reaction with Fundstrat’s Tom Lee and Calamos Investments CEO John Koudounison if you can trust the rally. Our Steve Kovach on Apple’s best day since 1998 and what keeping tariffs on China means for production. Barbara Doran of BD8 Capital Partners and Drew Pettit of Citi Research joined for a market panel, plus insight from former Kansas City Fed President Thomas Hoenig on how the central bank should navigate current volatility. Atlassian CEO Mike Cannon-Brookes wrapped up the show with a conversation on managing risk in a turbulent environment.  

An explosive rally for stocks after news president Trump is pausing reciprocal tariffs on countries that did not retaliate but holding them at that baseline of 10 percent. China the exception there the Dow up nearly 3,000 points S&P up nine and a half percent NASDAQ up 12. Welcome to Closing Bell Overtime I'm Fort. Morgan Brennan is on assignment and we've got a great lineup to navigate this historic market move after some historic market moves. And what comes next for your money? We've got Dan Niles, Fundstratz, Tom Lee, John Kadounis from Colomos, and former Kansas

City Fed President Thomas Honig, to name a few. We begin with the breaking news from the White House on the tariff pause that sparked this amazing rally. Eamon Jabras joins us with the latest. Eamon. Yeah, John, that's right. And we're getting just within the past couple of seconds, our first details in writing here in terms of what the president has announced.

A couple of bullet points sent to reporters on background here from the White House. They are saying that the reciprocal tariffs are paused for 90 days except on China, as we knew, whose tariff rate has been increased to a total of 125%. The baseline tariff of 10% that went into effect on April 5th remains in place for everyone. Section 232 tariffs on steel, aluminum, autos, etc. Those remain unchanged. They're saying sectoral carve-outs in the reciprocal and baseline tariffs also unchanged. This is important in terms of the impact on the EU. They're saying because the EU retaliatory tariffs have not gone into effect yet,

the EU's reciprocal tariff rate of 20% is also being paused. So the EU is now only being tariffed at the 10% baseline that went into place on April 5th. That had been a point of confusion over the past hour or so. Fentanyl tariffs on Canada and Mexico, they say, remain unchanged. USMCA trade is tariff-free. Non-USMCA trade is tariffed at 25%, except for energy and potash, if you can follow all this, which is tariffed at 10%, baseline of 10% did not

go into effect on Canada and Mexico on April 5th, and neither country is getting the 10% baseline now. So those are our first details in writing from the White House in terms of what the president's decision was, and we've been working to understand the context of how he decided to do this. You heard the president on the South Lawn just a short time ago, John, saying that he was watching the bond market. He was watching markets overnight. He said he thought people in the market were getting a little bit yippy and there was a

little bit of anxiety in the markets. He said he watched Jamie Dimon on television today, and that's when he made the decision, according to Caroline Levitt, the White House Press Secretary, he made that decision in the Oval Office a very short time before we saw the social media posts that rocked the markets. We don't know, John, whether that decision came

before or after the President posted on social media that now is a good time to buy the markets. So we don't know if he had this in mind when he was posting that to the world, but we do know from Caroline Levitt that he decided this in the Oval Office relatively short time before he shared the decision with the world. And now we have some of those details in writing, John. Back over to you. Wow.

Okay. That's quite a timeline. Eamon Jabbers, thank you. You bet. Now let's bring in Dan Niles, Niles Investment Management founder. Dan, it's like we hit the rewind button to April 2nd, but before the president held up that confounding chart to a lot of people, and there was some headlines

crossing where people thought this tariff rate was gonna be at 10%, and it wasn't great, but there was a bit of a sigh of relief. S&P 54.50, around the level where we closed today, takes us just a bit above the April 3rd lows after these tariffs were initially announced and the S&P had dropped 4%. So, are stocks more likely to do better from here now

or worse? So are stocks more likely to do better from here now, or worse? Well, I think you can't fix all your positioning problems in a day, so I'll take you back to when Lehman Brothers failed, right? Back then, the government made a huge mistake as well. They let Lehman Brothers fail. The market was getting cratered, and then on October 28th,

there was expectations of rate cuts and the S&P was up 10.8% in one day. It then gained another 6.9% over the next five trading days before of course falling 25% to November 8th. So to some degree this is like that where you have a policy mistake, the market gets cratered, people figured out they've done it wrong, they fix it, it rallies. It probably I think probably the two things I'm looking at is the S&P was near 5700, I believe, you know, before he held up that chart. That's probably near where the upside is. And I look at the VIX, and I go the VIX was at about 22 on April 2nd. I think it peaked at 28, I want to say, like in March before that.

And so if the VIX kind of gets down back to those levels, that's another data point I'd look at and say, okay, now we can go back to focusing on fundamentals. And to some extent, how markets react to JPMorgan, Wells Fargo, BlackRock on Friday morning, that'll give you another tell as to, you know, where are we in this terms of repositioning trade versus going back to focusing on fundamentals. So what about the credibility side of this?

The administration had been saying, we're looking at Main Street, not Wall Street, but we just heard that they said today that the president was looking at all these Wall Street indicators, the bond market, the stock market, what some bank titans were saying. The administration said this is not a negotiation, and now they're talking about how much they're negotiating and pausing to negotiate. Do you believe what they're saying? Well, absolutely. Everybody's human, right?

There's what you say and then there's actually what you do. And my thing, you had me on an interview on Monday and I talked about getting out of all my shorts and covering all of that and getting short volatility because the one thing that happened, I believe, that day when the market got crushed on Monday morning and then rallied was you got an idea of what a change in sentiment could do where the market was down 4.7% at its worst, then it was up 3.4% at its highest, and then it came back in. But why did it do that?

Because people thought that there was some chance of them backing off of tariffs. The other thing was it was becoming clear that Scott Besson, who don't forget, he worked with George Soros back in the day. He was involved with the shorting of the yen, the shorting of the sterling. He knows how global markets work. He was being put in charge of the trade tariff negotiations with Japan. And so to me, that was a sign that President Trump was putting cooler heads in charge of the tariff policy, seeing what was going on with the stock market.

And so that also gave me some hope that at some point, coolerheads would prevail. And that's obviously what ended up happening. But I just want to be very clear about this. The problems that the stock market had before are still in existence, much like, yes, you got a 10.8% rally on October 28th of 2008, but the market kept going down. You still have high valuations. You're still going to have tariffs. They're just not as high as they originally were.

That's inflationary. Earnings estimates have been going down for the S&P 500 since the middle of last year. Six of the seven, MAG 7, had revenue estimates cut for the March quarter when they reported their December quarters. All those things are still there. Well, that doesn't sound great. So does that mean cash is still your top pick here and people shouldn't jump back in the pool?

Well, as I said earlier, right, I think this continues for a little bit, but yes, I think the two levels are S&P getting back to where it was on April 2nd, and the VIX getting into that mid-20s range. Then you should start thinking about, should you really be paying 23 to 25 times trailing earnings when historically, the right number is around 19 when you have inflation this high? It's hard to argue tariffs are going to

make inflation go down anywhere in the near term. It's a process. Bottoming is not a day. It's like a process. You can't work through issues in short periods of time, typically. The feds told us they're not planning on really stepping in here because they're trying to balance slowing growth with higher inflation. Luckily, we know where the Trump put is, quote unquote,

down at these levels. But eventually, earnings are gonna matter, and I don't like investing when earnings are going down. Exactly a week ago was April 2nd. Kinda hard to believe. Dan Niles, thank you. Well, let's bring in CNBC's Senior Markets Commentator, Mike Santoli, with his take on today, just of hard to believe. Dan Niles, thank you. Well, let's bring in CNBC's senior markets commentator, Mike Santoli, with his take on today,

just today's wild action. There's been a lot of wild action, Mike. Yeah, we just keep ramping it up, actually, in terms of wildness, John. You can see how it looks like a little needle on the end of this chart here. Today's rally of almost 10%. Where did it bring us back to?

What did it accomplish? Well, it did leap a couple of hurdles, or at least areas where you might have thought it would run into a little bit of trouble, maybe one or two percent below here. That would represent things like, you know, the highs from from late last week. But 5670 is where we closed on that day one week ago when right before the the reciprocal tariffs were announced. There's still some upside there. What I also find interesting is this kind of equates to the previous intraday lows before we got the tariff announcements. Remember at 5,500 I was sort of saying well it's going to take real tangible bad fundamental news to get as much below that. We got what we thought was bad fundamental news for a while. So look it looks like that the lows can be trusted until further notice. That would be like around 4,800. We're figuring out where the top of the range is. Folks looking at some moving averages, 5,700,

whatever it is, we're in this zone where it sort of has to start to prove it. Take a look here at the 30-year treasury yield. This was where a lot of the dramatic action was overnight. This is a two-year chart. You can see it still looks pretty spicy up there, above 4.8%. You can see it still looks pretty spicy up there. I'm above four point eight percent You can see we've done that a couple of times. That's when it starts to unnerve other parts of the market

So we'll see it obviously ended up well below that 474 but this could be twitchy for a little while Russell 2000 I think was fascinating mostly in how far back in time it went This is a ten chart that goes back to the end of 2016. This was the sort of tax cut rally under Trump won and we were basically at or below the 2018 highs in this index believe it or not. So we did get a bit of a save there maybe that's the lower end of this this multi-year range. Mike remember back when some people thought

that we were gonna get more certainty on April 2nd? I wonder what all of this might mean for earnings guidance because we start to kick off earnings season in just the next couple of days with the banks. There's this 90-day pause, exactly a quarter-long pause on these reciprocal tariff rates but that probably doesn't help much for quarterly guidance or certainly what happened to full-year guidance. It won't. I think it's much more telling how the market

responds to that lack of clarity in the outlook by various companies. What we have done, we definitely haven't gained full certainty, but it seems like at least right now what you've done is sort of eliminate a potential worst-case scenario that you really thought could get disorderly and ugly immediately in the world economy and now it's more about just exactly where are we in terms of getting pinched around the edges with the tariffs that exist and all the rest of it.

Also would note, even before the big rally, before the turn of policy by the president, you did see Walmart and Delta both rallying after their managements basically said, we don't have a ton of clarity about the outlook. What a pop. I'll see you again in just a little bit. Mike Santoli. Meantime, we got more breaking news on tariffs.

Let's get to our Megan Casella now with new details. Megan. Hey John, absolutely. Learning a little bit drip by drip from this White House, they just put out sort of a fact sheet on some of the details on these tariffs. And just to emphasize, there's been a lot of confusion over the past few hours about what exactly the rates

would be on different trading partners. So now, with the fact sheet that we have, we can say that the European Union will get that 10% baseline rate that everybody else is getting for the duration at least of this 90-day pause. The EU had been at a 20% reciprocal rate. There had been a lot of questions about whether, because we saw some retaliation from the EU this morning, whether they would stick to that 20% rate.

The White House confirming now that because that retaliation had not yet taken effect, they will also fall to the 10% baseline rate. The White House confirming now that because that retaliation had not yet taken effect they will also fall to the 10% baseline rate. Then we get to Canada and Mexico and the White House official saying now that both of those countries will stay as is. So that means they get a 25% tariff rate. That's the one that's been in effect already over the fentanyl concerns and the White House says now that USMCA goods will continue to remain exempt from any tariffs. And John, I'll just say we've been asking a lot of questions over the past couple of hours about Canada and Mexico specifically.

And for the last two hours, no one could say exactly what the rate would be. The Treasury Secretary told reporters earlier, in fact, the opposite information that the 10% baseline tariff would actually hit Canada and Mexico as well. So that just goes to show sort of the shotgun nature of all of this and how a lot of these details are being hammered out sort of in real time. The last thing I'll flag is that the sectoral tariffs do remain. So that means we continue to have a 25% tariff on all imports of steel, aluminum, and cars and car parts and that the White House says the ones they've been talking about on pharmaceuticals, semiconductors, copper and lumber, none of that changes.

So a sigh of relief for the markets when these country-specific tariffs fall away, but much of what was already in place still remains. All right. Yes, reiterating that. Thank you, Megan. Let's get back to the rally. The S&P 500 just had its best day since 2008, the NASDAQ, posting its second best day ever. Let's bring in Fundstrat, Head of Research

and CNBC contributor, Tom Lee. Tom, were you getting nervous here with what the market was doing? I know you expected things to go a lot better for the major indices this year. Yeah, John, I was getting very nervous. I think the biggest sign was I was going to bed every night, checking futures, reading everything,

and wondering if the market would open limit down. So I was getting very nervous, but of course now this is a really big positive fundamental development. So why aren't you still nervous, given the velocity at which things continue to change? How do you find signal in the noise? How encouraging is it that after saying that they weren't gonna negotiate,

the administration is now negotiating after saying they weren't watching Wall Street's reaction, they really do seem to have been watching the market. Yeah. I'm going to have to make some guesses here, but I think one of the positives is that I think the White House exercised the Navarro put, meaning they are now inserting Besant more into the negotiating process, which I think is less of a hard line view. When I look at what this means for the next few months, I do think it, because of the tariffs

and they've been dialed down, companies now have what's effectively probation. So if they cut guidance or they don't show guidance, markets can look through it because they know it's an adjustment process. So I think it's taking the pressure valve of investors panicking on earnings. I also think it's been really good news to see Tesla rally because you know, it's taking the pressure valve of investors panicking on earnings. I also think it's been really good news to see Tesla rally because it's been our view that Tesla's more or less the exhibit A for what kind of bounce can ensue because, remember,

Tesla got hit the hardest first, and actually it's been holding some important levels. And then I think there are things, really, as we look towards the next few quarters, or a few months to be positive about because there is the tax deal and, you know, at the end of the day, there was a lot of technical damage but a lot got repaired. So, you know, I do think this was an important day. Apple popped 15% today to close just below 200 a share,

but we still got those 125% tariffs on China, which is going to have an impact on Apple, but not just Apple, on a lot of companies. How do you factor that in as an investor now? Well, yeah, I mean, the pressure valve has been released for basically the other 102 countries. In China, the pressure is intense. Obviously, these are ludicrous and absurd tariff rates that each country has imposed on each other. So I do think yesterday, investors would have worried that these were permanent rates that were going to essentially lead to

Apple's cash flows being choked off. Now I think investors realize there is time because it's a negotiating tactic. I think it's gonna be a change in how markets interpret this, even though it is doing damage to companies. So given that, where are you putting, how are you shifting, if at all, your money?

Based on what you've seen before, is your strategy changing? Well, you know, before markets fell out of bed last week, our take was post-tariff liberation day. We'd wanna stick with what we thought would work this year, which is the financials, the industrials, and small caps, those all got massacred.

But now that we may actually have seen what could be a bottom and possibly a V bottom, I think those are also gonna lead. But the Mag-7, because they fell first, and as I said, Tesla is exhibit A, I do think people need to actually have the Mag-7 in that mix as well. Yeah, this was so quick.

It's not even a V. It's like a needle bottom. It's a Dongshin. Oh, wow. Yeah. Yeah. Quite a thing to see. Tom Lee, thank you. Thank you.

Well, let's talk more about the playbook during this volatility. Joining me now is John Kadounis. He is the CEO of global investment firm, Kolomos. John, thank you. What are you doing in this volatility? How are you weathering it? Well, it hasn't been easy. Obviously, it's been a very interesting ride.

We weren't that nervous, or I wasn't that nervous till last night when the bonds were your yields were going up especially in the 10-year which sort of counterintuitive and when investigating why that was happening it let me a little bit more at ease it wasn't just China selling it was mostly hedge funds rewinding their swaps. So that was the biggest part of why we think we were going higher in rates there. But look, if you have a balanced portfolio and you have a risk-managed portfolio, you should be able to weather the storm as long as you stay invested.

But, John, my sense is a lot of investors out there now, after what we've been through over the past several years, don't really have a traditionally balanced portfolio, and we're feeling a little bit naked over the past week. And now, if they didn't sell, maybe they're in a position to do something, but they might be frozen. How do you balance at this point? Well, I think, number one, it's never good to sell in a panic situation, as we know. You miss the days like today.

If you missed today, you're really, if you sold yesterday, you're really, really upset. So you got to stay invested. Next, you start adjusting in things that are better risk-managed That can take care of the downside Traditionally with the largest convertible bondholder in the United States in terms of our funds Because it helps in the downside you may get a little cut on the upside But the downside we have products and you know a lot of the houses, but we are great risk managers and great options traders.

We brought out 100% protected Bitcoin from the downside. You can get exposure to the upside, but be protected on the downside. So people are really taken to these products because of the volatile markets. And believe me, these markets are going to continue to be volatile. We have a 90 day pause that uncertainty is the biggest reason for volatility and it you know we've taken a breath today we're all pretty happy that things came back but the uncertainty has not gone away and it won't go away for a while. So we have to get these you know this whole tariffs situation done and also we need to pass this whole tariff situation done. And also we need to pass the tax cuts.

So how should investors treat risk, particularly during this 90 day period? Retail investors have been piling into leveraged ETFs, been doing a bunch of margin trading. Is there a ceiling you think on risk assets from here? Is there particular danger in the volatility given how high the VIX still is even after coming down today?

There are products out there to help mitigate that risk. And that's what clients should be looking at. There are market neutral funds. One is one of the largest in the world where markets are up markets are down you're getting a particular yield because you know it's it's an arbitrage fund that deals with risk management it's not sexy people are used to getting double digit yields the last couple of years. We're spoiled with equity yields being really high, much higher than the average of their existence. But people need to understand

that that's not normal. And so they should have a certain amount of their portfolio in products that can avoid some of the risk. Market neutral type funds, not the leverage type of ETS, but the other types of ETS that mitigate your downside risk is really, really, really important. Staying in cash and looking at opportunities of stuff that is still cheap out there and dipping your toe back into the market is clearly one way to handle this.

John, what about international? Should investors look there if they don't have much? Absolutely, I mean international, there's gonna be, look, today was telling as to who was excluded from the 90 day pause, right? And so this is a war, a tariff war, or as I called it before in other programs, a yield war with China.

And we need to look at that separately and then the rest of the world differently. So there are pockets of the world that things are gonna go much smoother, trade is gonna be really well, and they're going to flourish as well as we are once we get through this pain. There's going to be pain. The administration talked about it. We've seen it. We felt it. John, everybody wants

to go to heaven, but nobody wants to die so that's something that people need to understand. There's gonna be more volatility. They need to put themselves in products that are risk managed by professionals. And just go lever up on everything. That's hedge funds got hurt, just this early in the morning, couldn't sleep because they were unwinding all the,

they got all their limits on the things, and so when your lover is this high, and it goes against you, it's not a good look. I think a lot of investors saw a bright light this week, even if they didn't die. John Kadunas from Colin Lowe's, thank you. Thank you. Well, speaking of, some stunning moves for tech shares today.

Check out the biggest winners in the NASDAQ 100. Microchip, MicroStrategy, or just Strategy if you will, Arm and AMD all up more than 22 percent. And Apple jumping as well, as I mentioned, after the tariff news. Even though higher tariffs are still on China at 125 percent, Steve Kovac covers Apple for us. Here with me, Steve, we traditionally thought about China as being the place where Apple manufactures iPhones via Foxconn, et cetera.

They've moved some to India as well, but why do you think this excitement about this announcement when China is still under the gun? That's exactly right, and that's exactly my thought as well. When this first happened, I mean, good news for Apple, right? They can, as we've been hearing some reports of, divert some of their production to India, bring those iPhones over to the United States,

but they're not out of the woods yet. China, these 100 plus percent tariffs are really gonna hit them still. I'll go back to what Wamsi Mohan of Bank of America said earlier this week in his note that or sorry to the Wall Street Journal rather. He told them that even if Apple ships every single iPhone they make in India to the United States it will only fulfill 50% of the demand that we have here. That means China is where the rest of them are going to come from.

And by the way they're not going to ship every single iPhone from India over there. So they still have to grapple with that. What's going on there in China? By the way, we know we've got to wake up tomorrow morning and see what the retaliation is from China. We've been waking up every morning this week and seeing something. And beyond just more terrorists being levied on the United States, do they go after them on antitrust grounds? Do they go after them? Do they slow down the supply chain? There are so many other levers that China can pull to kind of squeeze Apple.

And then you might be saying, okay, well, why, you know, the whole notion of these tariffs, right? Bring manufacturing back to the United States. Let's start building iPhones here in the United States. MAGA, let's go. Let's do it. But I mean, that is what's being said, right? That's what's being said by this White House.

I'll go back to Mr. Mohan again from Bank of America out with a note this morning saying, it would cost 90% more for your iPhone if that happened. 25% just for the labor to build it here in the United States. Forget about how long it takes to get a factory up and running, and that means all the supplies and materials coming in from overseas, those raw materials that turn your iPhone into an iPhone,

it can't just happen magically, and it can't just happen cheaply. Yeah, and that's assuming that you took all the people who are doing it in China and shipped them over here and paid them what you'd have to pay them here. Exactly, 70 bucks an hour or something. It doesn't even count the buildup in knowledge that you would need.

But this does do, though I imagine, with this 90 day lag, it suggests that the Trump administration is not trying to hurt companies like Apple. Exactly. So there's possibly something else, some other level that can be pulled between now and then to keep Apple from getting real estate.

A little bit of hope that Apple either convinces the Trump administration sometime in the next 90 days, let's call it, that let's get an exemption. There have been, that's been the idea, by the way, with an Apple since Trump was elected, that these tariffs are just gonna be surgical, we'll get exemptions, Tim Cook, I'm gonna show up to the inauguration

and donate $1 million to Trump's inauguration fund and I will win these exemptions like I did in his first term. That has not happened yet. So there's a little hope that that can happen again today. But again, diverting everything to India is just not gonna happen anytime soon. Vietnam is also an important one. That is actually good news here for Vietnam.

A lot of AirPods are made there, watches, I believe some Max, Malaysia, another big important growing manufacturing center there. So there is some good news in here and there is good news. I wanna make that very clear that things are getting better now with this pivot that we're seeing from the White House, but China is still a huge bear right now. And there's a lot more to work through.

By the way, we've heard no clarity from Apple on any of this. We don't know what their plan is. We don't know if they plan on increasing prices, if they plan to absorb it. The best we have is just really smart people doing some back of the envelope math to try to figure out what this is going to cost them. Which is business as usual for Apple. But we know Tim Cook does have the president's number in his iPhone. He sure does.

Steve, thanks. Now let's bring back Mike Santoli for a look at valuations for Apple and tech, Mike. Yeah, John, with the question of did the sell-off really reset valuations in a way that really improved the risk-reward? Well, maybe so. This is the forward PE of Microsoft, Apple, and the NASDAQ 100 as a whole.

You see it came down quite a bit in a short period of time, but I had the 15- year chart here mostly to show that all it did is bring you back to the bottom end of the range in almost every case that really has been in place since COVID, since the pandemic rally and all digital businesses and things like that. So obviously didn't make these stocks absolutely cheap.

And the rally, by the way, since we made this chart would have even brought up those PEs by a couple of points in most cases. So I would say certainly not as expensive, certainly it restored some level of margin of safety but not exactly super cheap in a bad economic scenario. Take a look here at how the S&P has performed after 80% of all of its stocks have gone below their five-year average PE.

So when they're below the five-year range on average, 80% of all stocks, this is from Evercore ISI, the forward returns over the next month up 7%. Guess what? We got more than that just today because this just happened. Over three months, you see 11% average, 18, 30. Now those are the averages, and this is the band of returns in all instances So you actually in some instances have lost money for one three and six months after that happened So it's not like a five-year average PE is some kind of magic threshold to buy once you fall below

I'll point out that this analysis starts in 2015. My expectation is if you brought it back to 2000 You would have seen not such great results just because stocks were down in in PE because of where they started. Speaking of PE, Mike, should we expect revisions on the E side anytime soon? Yeah. Yeah, I think that's kind of just going to be an ongoing process as we get through earnings season. Normally the pattern has been, you know, analysts, they kind of trim their expectations over the course of a quarter,

then companies almost universally beat by a few percentage points in aggregate. That's gonna be an interesting dynamic. It's hard to imagine that's gonna be reliable this time, that companies are gonna beat by that much. We talked about they're gonna have cloudy outlooks. I will say though, when the PE comes down, and when the

market is starting to pay less per dollar of earnings that's the market's way of bracing for lower earnings right it's not just some abstract thing it's also the markets expression gets sentiment on how reliable those earnings look like they'll be. Okay Mike thanks. Well still ahead should you trust today's bounce and put new money to work here? We're going to talk to one expert who says you might want to hold off on making any big moves. And we will talk about how the Fed is navigating this whiplash of headlines out of Washington

and what it all means for rates when we're joined by former Kansas City Fed President Thomas Honeck. We'll be right back. Welcome back to Overtime. If you're just joining us, a historic upward push for the markets today after a historic sell-off over the last week. Today's jump, Dow up nearly 3,000 points, comes after President Trump paused tariffs for 90 days on most countries, China being the exception, S&P 500 turning in its best

day since 2008. The Dow, as I mentioned, logging its biggest point gain ever, and the Nasdaq having its second best session ever. And we've got some more breaking news now out of Washington. Our Emily Wilkins has those details Emily Hey John, well look the markets might be feeling good about tariffs Republicans here in Congress are trying to add more good feelings to the markets by advancing Trump's agenda that includes of course that five Trillion dollars in tax cuts

But right now that package is looking like it is going to be in trouble. The House just took a procedural vote to move forward and you saw three Republicans come out against it. That is the most that Republicans in the House here can lose. If they lose even one more on this next vote, it's going to mean that this tax cut is going to be very, very difficult to get through, that there are going to be issues. A lot of the lawmakers who I've spoken with have said the real concern here is that they are moving forward a package that for the Senate side at least has limited cuts, only four billion in federal cuts, while adding five trillion dollars in tax cuts to the deficit. And they're very worried about that imbalance, about what that could mean for the bond market. I've talked with a number of

lawmakers today who say they're looking for assurances that the Senate really is going to cut spending along with the amount that they want to spend. But we only have a couple more hours here. Speaker Mike Johnson has said he wants to have this vote today. He's worried about attendance issues tomorrow. So we'll be keeping a close eye on this for the next couple hours and see if they can actually advance the tax package and the rest of Trump's agenda. John? Yeah those house GOP budget hawks don't like that new math from the senate Emily thanks. Well it is time for a CNBC news update now with Kate Rooney. Kate? Hey there John an appeals court today cleared the way for the Trump administration to once again fire about 24,000 federal workers at 18 agencies. The probationary workers faced those

cuts as part of the administration's purge of the federal workforce. The ruling overturns an earlier judgment that the firings violated regulations for mass layoffs. A federal judge meanwhile just ruled that the conservative cable news outlet Newsmax defamed Dominion Voting Systems with false reporting that accused that company of rigging the 2020 election. Dominion is seeking $1.6 billion in damages, which will be decided in a jury trial, which is scheduled to start on the 28th.

And President Trump just signed an executive order against the Sussman-Godfrey law firm. It's the latest in a string of orders targeting firms that have represented clients in disputes with the president. Some of those firms are now fighting the actions in court while others have reached deals with the president on his demands. They're pledging millions in pro bono legal services and agreeing to abide by the president's orders on DEI initiatives. John, back over to you.

Okay, thank you. Now let's get back to today's historic rally, also the highest volume trading day on record. Let's bring in BD8 Capital Partners founder and CIO Barbara Duran and City Research Director of U.S. Equity Strategy, Drew Pettit. Guys, welcome. Barb, can you buy here? That's a big question. I think a lot of people are dying to buy. It was a big sigh of relief today.

I was on the phone with a client who was really, really nervous about the portfolio. And I was happy to say in the middle of the call, came out the tariff news and her portfolio was up 10%. But is it a buying opportunity? I think there'll be some follow through. I think there's select stocks you could buy, things like maybe Netflix that have held up,

but I don't think it's a big rush to buy, even though you can see some follow through here. And the reason is there's still big uncertainty about these tariffs. It's been on again, off again. We're still waiting to see if there's gonna be tariffs on semis, on pharma. And plus this is only a 90 day reprieve.

And frankly, this administration I think has lost a lot of credibility in the way this has been rolled out. And I think this would be a lot of caution among consumers and management. So I'm not saying the worst, I think, is over. I think a bottom has been put in unless we go back, you know, to these high, quote, reciprocal tariffs. But I just think there's too much uncertainty. And in fact, this kind of reminds me when china uh... back in the twenty one time

frame obama may some decisions against alibaba some education companies who lost fifty to seventy percent of value that began with distrust of government interference and i think that it really does incentivize people to invest in that market and certainly he sold happened today with the uh... that the tenure and i think uh... that with the going up to 4 1 1 2% suddenly was like, oh yeah, 24% of our treasuries are held by foreigners with Japan and China

the top two holders. And if they stop buying or on the margin, it's a problem. So I don't think the coast is clear yet. Drew, how has the narrative changed? My sense is that there are a lot of retail investors out of there who are out of position, maybe have more risk than they wish they had, aren't diversified in a way that many of the professionals think would make sense in the market as we see it today.

What do you think? So it's funny, when I think about honestly the ETF flow trends and the professionally managed side of retail, we've actually seen record flows into fixed income leading into this month. So I think while the retail investor might be chasing some kind of YOLO stocks and get rich quick types of trades, I do think there's more professional management overlays now where you actually saw a lot of buying of bonds and safety leading into this month.

Look, this is a big move today. This is messy. This kind of gets you a flip flop and back and forth between the bears and the bulls, but we're right back at that 5,500 level, which we were talking about balancing risk reward if we had a 10% broad tariff. So from here, look, I'm just going to echo what we just heard.

It's do we hear about more sticks in tariffs coming or do we start to hear some good news about taxes? And let's just call that the carrot on the other side. Barbara, it's almost like we're speaking as if we weren't talking 125% tariffs on China and 80 plus percent, 85% or so from them coming back. I mean, China is a big trading partner. We in the US buy a lot of cheap stuff and a lot of expensive stuff. Thinking about Apple from China as well, how do you factor that in as an investor, even

if you're mostly holding tight to your strategy, how do you factor in a trade war between these two superpowers? Well, it's not just a trade war with them. There's obviously all the other tariffs like this 10% and the 25% on autos and steel and aluminum that are still there. And China, if you look at, excuse me, our GDP is about 11% is from imports, and China is about 13%,14% of that. And as you just said we get things like toys and furnishings and textiles from

them. And so those prices you know what those kind of tariffs are going to go up and the question is the consumers that tend to buy these things you know they come in as low cost these are lower income consumers and it's going to hurt. But there's a lot to factor in here we don't know yet the extent of lower income consumers and it's gonna hurt. But there's a lot to factor in here. We don't know yet the extent of it. It's gonna affect earnings.

We'll see how inflationary it is. And so there's just still so much we don't know. And earnings season starts Friday, but I think it's still a little soon for the companies to have specifics. They can talk about the problems and what probabilities, but I think it's, we're not gonna get a lot of color in those first few weeks of our earnings reports

on what the impact could be. Nobody will blame them for not giving too much color. Barbara Durand, Drew Pettit, thank you. Well up next, former Kansas City Fed President Thomas Honig on whether the Fed should be making any moves with so much volatility around these fast moving trade headlines. And U.S. Steel sinking right now

and over time on some fresh headlines. We've got all those details right after this break. ["The Daily Show"] ["The Daily Show"] ["The Daily Show"] ["The Daily Show"] ["The Daily Show"] More breaking news out of Washington.

Let's get back to Eamon Javers at the White House. Eamon. Hey there, John. That's right. President Trump talking to reporters in the Oval Office just now. Making some comments on U.S. Steel that are moving markets. Here's what he said. ...industry, but now it's going to thrive, maybe like never before. I mean, if you go back to U.S. Steel from 90 years ago, it's incredible. It's the number one company in the world for a long time. That's why we don't want to see it go to Japan. And we love Japan, but we, you know, U.S. Steel is a very special company. We don't want it to go to Japan or any other place.

So we're working with them. So it seems to be an indication from the President there that he doesn't back that Nippon Steel, U.S. Steel deal. That obviously, as you can see on your screen right now John moving the price of US steel though he says US steel is in a position to thrive now given everything that he's done to reset trade. Although the president has been known to change his mind. Yemen Jabers thank you. Including today yes. Mark it's roaring back after President Trump authorized, as mentioned, a 90-day pause on reciprocal tariffs.

Joining us now on what this means for the Fed's next move is former Kansas City Fed President Thomas Honegg. Thomas, thank you for joining me. Any precedent for these extreme policy moves leading to extreme market moves and big reversals? Well, no, this is unusual. Let's just face it. I think the Fed was anxious, very anxious, if you will, that these tariffs were going to keep rolling as they have been.

And I think you're breathing a sigh of relief right now because there was a lot of issues around that that had to do with liquidity in the market. People, you know, they were moving away from the US. We saw the 10-year and the securities yields on those moving up. They were concerned about refinancing the debt. Those were all things that were on the table. And now they have this kind of breathing room and hopefully turn to a little more normal circumstances. But remember, I think we're all paying attention to the tariff, as we should. But also, the United States has a significant amount of debt to both refinance and refinance new debt.

And they're right in the middle of legislation around reconciliation and more spending and more issues around tax cuts. These will affect the debt, and the debt is really quite an important topic that I think has been sidelined here temporarily because of these tariffs. We need to turn back to that issue. And what about some of the other data

that the Fed's gotta be watching? Even though the extreme version of these tariffs isn't coming in the next 90 days, what does this do to inflation expectations? What does this do to business confidence and willingness to spend? What does this do to lenders' willingness to lend? Well, let's just start with the 90-day pause. That's a pause.

There's nothing that's reinforcing about this. We're ending this thing. So that means uncertainty remains. That means investment has to be much more careful, holding back, so that's number one. Inflation expectations, even where we are right now, as someone said earlier, we still have big tariffs in place on steel and other items.

We still have a trade war going on with China. These create inflationary, I think, pressures steel and other items. We still have a trade war going on with China. These create inflationary, I think, pressures that we can't ignore. And that's going to be on the Fed's list as well. So their March projections for inflation were modest in terms of very little change. How that going to affect their thinking going forward, it's going to be higher. It almost has to be X energy at the moment. So I think there's a great deal of-

So does this pause make it- Does this pause make it any easier for the Fed to cut? Well, I don't think so, no. I think it gives them time to assess and is it going to be longer term? This has changed their outlook. I think they need to be careful because inflation is still an issue.

It's still, they're not even careful because inflation is still an issue. They're not even close to 2% in my terms. They're still, we're still talking 2.8%, 3%. When you look at the CPI, even higher than that. So they still have an inflationary issue. And I know they're paying more attention to employment, but that's still steady right now. So there's no real cause for them to cut rates at this point.

They need to watch. All right, Thomas Honig, an inside look that you can give us, appreciate it, thank you. You're very welcome, John, take care. Up next, a top tech CEO on how he's navigating this economic and market uncertainty as he unveils new products as well. And check out the Nikkei futures up 8%

following the rally in the US. Overtime will be right back. Welcome back to Overtime. Today's tariff pause, sending stocks soaring, but for executives, uncertainty and volatility remain. So Howard Tech CEO is gaming out the next few months. Well, joining me now is Atlassian CEO and co-founder Mike Cannon-Brooks. Fresh off the stage at Team 25, the company's annual customer conference.

Mike, good to see you. So there's uncertainty out there for business on the macro. What's the impact on their willingness to spend on software that drives communication, drives productivity, including the new AI features that you guys announced today? Yeah, thanks, John. Look, it's great to be back. There's no doubt there's uncertainty in the macro.

You called it correctly. I think good businesses are looking longer term. They always have to be managing the short term, that's part of our jobs, but to look at the long term and working out the customer outcomes that they're going to get. A lot of our new software and AI and in the system work for all teams and how they collaborate,

is going to help them get more efficient as a business, and that's going to be a problem they have this year, next year, and the year after. So we've always been a very long-term thinking company. So we try to focus on that. What do you have to do in the way your people engage with the customer in the way you're even deploying agents in the software to take up features for them

in an environment where they're not sure how much they're going to have to spend, right, in the coming quarters. How do you get over that delayed delay hump that usually comes as an economy slows down and customers start pushing out the decision on whether to buy? Look, I think it really sharpens their focus

on the value they're getting from their software, right? Atlassian software has always been incredible value for money. At times like this, it's where they're looking for even more value. Not only in the price of the software versus what they get in exchange, but specifically, can it make them more efficient? Can it drive other gains in their business? Can you prove that value to them?

We talked today about having removed 200 million meetings from our customers in the last 12 months. That's a lot of time that they're going to get back to spend on other activities. So if you can demonstrate that your software has a high ROI and return to them in terms of their investment, I think there's always a great space for that. Mike, stick with me for a moment.

We're getting more tariff headlines from President Trump. Eamon Jabbers has those details. Eamon. Hey, John, the president appears to be putting a lid here on the tariffs on China. The president's saying to reporters, he's asked, do you think you'll have to increase tariffs on China even more before they come to the table? The president responding, I can't imagine it. So the president there, John, seeming to signal here

that he is ready to put a lid on those tariffs, at least for now, and wait and see if he can get the Chinese in the negotiating table. Back over to you. And to escalation, Eamon, thank you. Mike, coming back to you now, you guys at Lassie and are technically an Australian company, you IPO'd here on the NASDAQ.

I was there at the NASDAQ that day. What from your view is happening to this push toward globalization that in a way a company like Atlassian represents, right? You got customers all over the world. You IPO'd here. You've got employees all over the world as a remote first company. Do you see that trend being in mortal danger? Look, I think what we try to focus on is our customers.

Our customers are in more than 200 different countries and territories. They will all have unique challenges going on, maybe at the moment more unique challenges than other times, but they still have their own customers that they have to deal with. So we have employees all around the world, we have customers all around the world,

we are used to navigating global issues, they're going to keep coming up. And what you want is your software, your tools to be agile enough to help you respond. There's no doubt there's management teams out there, they're changing their plans at the moment, they may be pausing some, they may be accelerating others.

The question is how quickly can they respond? And we'd like to think that our software helps our customers be more agile to be able to respond to whatever changes may get thrown at them by the world today. What are you telling your team to focus on to keep the business flowing? I tell them to focus on our customers

and focus on the long-term. I think the danger of looking at your feet too much and focusing on what happened today or what happened the last five minutes or the last 20 minutes, it's pretty hard to run a really great business when you're doing that. You're trying to work out where do we need to be

in a year and three years time? And are we making the correct investments to get there? For us, that tends to be building fantastic software for a fantastic price for our customers obviously and making sure that we're helping them in their businesses, right? If we're making them efficient, if we're giving them good value, they're going to come back next year. Mike Cannon-Brooks, Alassian co-founder and CEO, thank you from team 25 and a historic day in the market. The Dow surging nearly 3,000 points, its largest point gain ever. S&P up 9.5%. Nasdaq up 12. We'll see if that holds. That's going to do it for overtime. Fast money starts now.