Finance experts warn we just heard a 'dead cat bounce' as Trump tariffs cause chaos
The message from the White House is as clear as mud
President Donald Trump has upended the stock market, the trade industry, and the world of politics with his warnings of harsher tariffs on foreign imports apparently going ignored until it was too late. The POTUS sent out a 10% baseline tariff, while the likes of China, Vietnam, and Cambodia were hit with much harsher customized tariffs. Trump was accused of punishing the political powers that have gone 'against' him, with the European Union facing a hefty 20% levy.
Things have only got worse in the aftermath, and following Donald Trump wiping a jaw-dropping $2.3 trillion from the stock market in a matter of seconds, there's continued chaos amid pricing fears and tech troubles.
With everything from the Nintendo Switch 2 to the iPhone set to surge in price, some are clinging onto hopes that deals can be made to restore some sort of order. Going against this, China's retaliation has already led to the Trump administration slamming it with an unthinkable 104% tariff.
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Across the board, there appear to be mixed messages on whether these tariffs are locked in or there's room for maneuver if countries are willing to bend to the US' will. As reported by CNN Business, the chance of deals being made saw the stock market open at an improved 3% on April 8, reaching a high of 4% and then finishing with a 1.6% loss. It's much of the same on April 9, with the S&P 500 opening 0.5% higher.
With Trump's trade war on China heating up, all of the day's wins were quickly wiped out.
CNN notes that we could be experiencing a 'dead cat bounce', which is a financial term that's not exactly good news. The term comes from the idea that stocks will briefly come back in moments of uncertainty, getting its name from a dead cat supposedly bouncing if it falls fast enough from a great height. A dead cat bounce is also sometimes referred to as a 'sucker rally' because it isn’t based on anything substantial. Proving why we shouldn't be fooled by this rebound, the S&P 500 is down 14.82% in 2025.
It seems the mixed messaging is to blame here, with the likes of White House trade adviser Peter Navarro suggesting no deals will be made, while White House press secretary Karoline Leavitt said the President has told his trade team to create 'tailor-made' deals.
The POTUS himself has spoken out on deals or no deals, telling the press: "It could be, they can both be true. There can be permanent tariffs, and there can also be negotiations because there are things that we need beyond tariffs."
It's hoped that Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick will provide the reassurance that traders need now, but with accusations that Trump's tariffs were made using ChatGPT, expect those dead cats to keep on bouncing until a clear message can be locked in.