SOTS 2nd Hour: Stocks Swing On Tariff Headlines: What Investors Should Know 4/7/25

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Sara Eisen (0:59)

Good Monday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber, live at Post 9 from the New York Stock Exchange. Another rough day for the markets. The sell-off is getting worse this morning post-tariffs. The S&P is down another 1.65 percent. It looked worse at one point. The Nasdaq down only 1.25 percent, which is sad. The Dow actually rebounding a little bit here.

Down 875 points, which actually is a rebound. After the S&P actually technically went into a bear market, which is 20 percent plus from the recent highs joining the Nasdaq earlier this morning. Take a look at treasuries. There's been some funky action going on here as well. Yields are now higher. So we started the overnight session buying bonds where the 10-year yield dropped all the way down to 3.9. And now they're selling bonds, at least on the longer end of the curve, and yields are higher, at 4 percent. We have so much to talk to and talk about, Carl, given the sell-off.

Carl Quintanilla (1:56)

30 minutes into the trading session, some of the big movers were watching. Market volatility, of course, multi-year highs, VIX at its highest level since COVID, March 2020, as this global sell-off continues. European stocks are selling off. Indices there from the DAX to the FTSE down about 3 to 4 percent. Stocks in Asia tanking overnight all down 5 percent or more. Taiwan was the biggest laggard, while Hong Kong's Hang Seng suffered its steepest decline since 1997 We'll continue to watch the selling in cars, GM, Ford, Stellantis, Tesla, all under pressure. Tesla shares now more than 50 percent off of their highs, and it's not just Tesla. All the Mag 7s in the red and trading in bear market territory. Banks are another story too, trading at their lowest level since September, ahead of earnings, of course, from JP Morgan, Wells and Morgan Stanley later this week.

Sara Eisen (2:45)

So, guys, I spent the weekend on the phone. I mean, it was one of those weekends. I'm sure you did, too. It reminded me of the regional bank crisis, the COVID days, financial crisis. It's one of those working weekends, talking to investors, talking to CEOs, talking to everybody that we can talk to, to find out what they're thinking and how they're feeling. And I have to say, it's not good. The common refrain that I've heard is that this is a huge, unforced error. And even if, like, so many people agreed with President Trump's original premise, that we need to get some fairer trade terms, right? We need to, we need to pay attention to some of those manufacturing jobs that have been lost over the years as we've ceded share to China. We need to get rid of some of those non-tariff barriers. Even if you agreed with all of that, the execution of this policy, the fact that these so-called reciprocal tariff rates were based on nonsensical economics and the fact that they were much higher even in their own formula than what was correct, I think has led to two things. One, pricing and increasingly of recession in the United States and in foreign countries and some serious credibility and confidence issues in US assets.

And that, I don't know about you, David, that is what I'm hearing.

David Faber (4:04)

I shared this at the top of the nine, almost different words, but the same sentiment, Sara. Disbelief from the part of the many of the CEOs I spoke to and this hope in part that this is a negotiating tactic. But that seems to be, with every passing day and every utterance from members in the administration, whether it be the Commerce Secretary or the Treasury Secretary or Mr. Navarro, who joined Squawk Box earlier, that seems to be going away as a real possibility. And when you talk about the lack of intellectual rigor in terms of applying these tariffs and the fact that really they were based on nothing having to do with anything reciprocal, you get to a question of, all right, is it revenue raising? Because we don't seem to really want free trade. If we wanted free trade, we would have gone for reciprocal in some way to try to then lower about, lower barriers around the world, to the point you were talking about. Or is it about we want to eliminate the trade deficit, which again takes you in a completely different direction than negotiating?