Market Beats | Global Stocks Lose $9.5 Trillion in 3 Days; Tesla Bull Analyst Cuts Target Price by 43%; Trump Threatens Additional 50% Tariff on China; Jamie Dimon Sends Warning Amid Trump Tariffs; DeepSeek Teams Up with Tsinghua for New Training Method; Stellantis Offers to Pay Part of Tariffs

—— Global Stocks Lose $9.5 Trillion in 3 Days; Tesla Bull Analyst Cuts Target Price by 43%; Trump Threatens Additional 50% Tariff on China; Jamie Dimon Sends Warning Amid Trump Tariffs; DeepSeek Teams Up with Tsinghua for New Training Method; Stellantis Offers to Pay Part of Tariffs

1. Global Stocks Lose $9.5 Trillion in 3 Days

The turmoil in global financial markets intensified on Monday, as investors appeared to lose faith in any potential shift in President Donald Trump’s tariff policies. This loss of confidence has triggered a dramatic sell-off across various markets.

Equity markets experienced a significant downturn, with a staggering $9.5 trillion erased from global stock values over three days. In the U.S., S&P 500 equity futures indicated a 3% loss, while the VIX Index, often referred to as the “fear gauge,” surged above 50, signaling heightened market volatility. In Europe, the Stoxx 600 index fell by 5%, and Asian markets recorded their worst day since 2008, underscoring the widespread nature of the sell-off.

As investors sought safer investments amid the market chaos, U.S. Treasuries and the Japanese yen saw increases, typical of flight-to-safety movements during times of financial distress.

The market’s response also reflected a growing expectation for the Federal Reserve to intervene through monetary policy adjustments. Market traders have priced in the equivalent of five quarter-point interest rate cuts for the year. Furthermore, swap markets are now showing a 40% probability of an emergency rate cut by the Federal Reserve as soon as next week, well ahead of their scheduled meeting in May.

The driving force behind this market anxiety is President Trump’s firm stance on tariffs, which he reaffirmed over the weekend despite warnings from economists about the risk of recession and criticism from figures within the financial sector, including hedge fund manager Bill Ackman.

Trump’s comments to reporters on Air Force One, where he urged to “forget markets for a second,” have done little to assuage concerns, indicating a continued disregard for the negative impact of his trade policies on global financial markets.

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2. Tesla Bull Analyst Cuts Target Price by 43%

Amidst a turbulent economic landscape influenced by political actions, Tesla Inc. is facing significant challenges that have prompted one of Wall Street’s most optimistic analysts to dramatically revise his outlook on the company’s stock. Daniel Ives of Wedbush Securities, a steadfast bull on Tesla shares for the past four years, has cut his price target for Tesla by 43%, reducing it from $550 to $315.

Ives pointed to a “brand crisis” at Tesla, significantly influenced by CEO Elon Musk’s public persona and actions, as well as the impact of trade policies implemented by US President Donald Trump. He expressed that Tesla has become a political symbol globally, which complicates its market position and investor sentiment.

The report highlights particular concerns about Tesla’s exposure to China, a critical market for Tesla, where it generated over 20% of its revenue last year. The looming threat is the new tariff measures from China in response to US policies. Starting April 10, the Chinese government intends to impose a 34% tariff on all imports from the US, which is a direct counter to Trump’s reciprocal tariffs on Chinese goods. This situation places Tesla in a precarious position, potentially subjecting it to backlash and financial strain in one of its most important markets.

Ives emphasized the need for Elon Musk to take decisive leadership action to navigate through this period of heightened uncertainty and to mitigate the risks posed by the geopolitical tensions affecting Tesla’s business.

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3. Trump Threatens Additional 50% Tariff on China

Homebuilders including Brookfield Residential, Lennar Corp., and Toll Brothers Inc. are joining forces to help rebuild homes affected by the Los Angeles wildfires in January. The group plans to form a “Builders Alliance” designed to boost efficiency and reduce costs.

According to a presentation seen by Bloomberg News, the alliance will launch an online portal where displaced residents can choose from a curated set of home plans. By partnering with other companies, the group aims to secure bulk discounts on materials and provide temporary housing for up to 3,000 tradesmen to enhance productivity, said Adrian Foley, CEO of Brookfield Residential.

The alliance will also collaborate with government agencies to streamline the permitting process, with the goal of scaling up efforts to accelerate reconstruction in the fire-ravaged areas.

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4. Jamie Dimon Sends Warning Amid Trump Tariffs

Jamie Dimon, the CEO of JPMorgan Chase, has expressed significant concerns about the potential economic repercussions of the global trade war exacerbated by recent tariffs introduced by President Donald Trump. In his annual letter to shareholders, which was published on Monday, Dimon cautioned that these tariffs are likely to increase inflation and could lead to a higher probability of a recession in the U.S.

Dimon highlighted the urgency of resolving these trade issues swiftly, noting that the negative impacts of the tariffs could accumulate over time and become difficult to reverse. He also mentioned the uncertainties surrounding the planned tariffs, including potential retaliatory actions from other countries and their effects on business confidence, investments, and capital flows.

While hoping that negotiations might yield some long-term positive outcomes for the United States, Dimon expressed a grave concern about how the tariffs might affect America’s long-term economic alliances. His comments reflect a broader apprehension among corporate leaders in America about the damaging economic impacts of the tariffs. Dimon acknowledged the possibility of the tariffs being inflationary in the short term and suggested that while they might not necessarily lead to a recession, they are likely to slow down economic growth.

Despite these challenges, Dimon remarked that the U.S. economy has remained resilient, with businesses appearing healthy and consumers continuing to spend, although he noted some recent signs of weakening. His insights are particularly impactful, given his influential status on Wall Street and his long tenure leading one of the most prominent banks since 2006.

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5. DeepSeek Teams Up with Tsinghua for New Training Method

DeepSeek, a Chinese startup known for its impactful low-cost reasoning model launched in January, is advancing its AI technology through a collaboration with Tsinghua University. Together, they are focusing on enhancing the efficiency of AI training processes to reduce operational costs significantly.

Their joint research has produced a novel approach within the field of reinforcement learning, aimed at optimizing AI models to better align with human preferences. This method enhances learning by rewarding AI systems for delivering more accurate and comprehensible responses. Although reinforcement learning has effectively accelerated AI tasks in specific domains, applying it broadly has been a challenge. DeepSeek and Tsinghua University are addressing this through what they term “self-principled critique tuning.”

The new strategy has shown promising results, outperforming existing methods and models across various benchmarks while also requiring fewer computing resources. This breakthrough has led to the development of what DeepSeek calls DeepSeek-GRM, or “generalist reward modeling.” These models not only improve performance but also do so with greater efficiency.

DeepSeek has announced plans to release these models on an open-source basis, which will allow other developers and researchers to access and build upon this innovative technology. This move places DeepSeek alongside other major players like Alibaba Group Holding Ltd. and OpenAI, who are similarly pushing the boundaries of AI by improving real-time reasoning and self-refining capabilities of AI systems.

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6. Stellantis Offers to Pay Part of Tariffs

The US budget deficit continued to expand in February, reaching $1.15 trillion over the first five months of the fiscal year. Rising Medicare costs and higher expenses for servicing government debt have been key contributors to this increase.

In February alone, the deficit grew by $307 billion, according to a Treasury Department release on Wednesday. When adjusted for calendar differences, the current fiscal year’s gap is 17% larger than that of the previous year.

This persistent widening could complicate President Donald Trump’s plans to extend and build upon his 2017 tax-cut package—most of which is due to expire at the end of this year. Some congressional fiscal conservatives may push for additional measures to prevent further deterioration of the fiscal outlook, while tax-cut advocates warn that failing to extend the cuts could harm economic growth.

When asked whether the Elon Musk-led initiative to cut federal spending was impacting the budget numbers, an agency official directed reporters to DOGE and noted that few spending categories registered significant declines in the report.

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7. US Stocks Tank Amid Tariffs

U.S. stocks faced a downturn on Friday afternoon, closing in negative territory as the automotive and Chinese sectors led the fall. This decline was primarily driven by an announcement from the White House confirming President Donald Trump’s intention to proceed with significant tariffs on imports from Mexico, Canada, and China starting Saturday.

Specifically, Trump’s administration plans to impose a 25% tariff on goods from Mexico and Canada, and a 10% tariff on Chinese imports. This news negatively impacted investor sentiment, particularly affecting a UBS Group AG basket of stocks deemed at risk from these tariffs, which plunged by 3.7%. Additionally, despite an initial gain, the S&P 500 Index ended the day down by 0.5%.

The financial markets reacted swiftly, with the Bloomberg Dollar Spot Index reaching a session high, indicating a flight to safety among investors. Meanwhile, the Cboe Volatility Index (VIX), often referred to as the “fear gauge,” increased to just over 16, reflecting growing uncertainty and risk aversion among traders.

The ongoing threat of tariffs has been a significant concern for U.S. equity markets since Trump’s election victory in November. Analysts and strategists have cautioned that such high levies could spark inflationary pressures, potentially leading to broader economic disruptions and negatively impacting stock valuations.

Given this backdrop, sectors such as automotive, technology, and manufacturing, which have substantial exposure to international trade, are particularly vulnerable to the effects of prolonged trade wars and the imposition of tariffs.

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