U.S. stocks were volatile in early Friday trading, while the dollar slumped to the lowest levels in more than three years and Treasury yields jumped, as China hit back with a final retaliatory tariff on American-made goods and investors braced for the start of the first quarter earnings season amid the ongoing market turmoil.
Updated at 11:15 AM EDT
Take 5?
Long-dated 30-year Treasury yields were back testing the 5% mark following comments from New York Fed President John Williams, who told an event hosted by the Puerto Rico Chamber of Commerce that tariffs could quicken inflation pressures and boost unemployment over the coming year.
"It's hard to know with any precision how the economy will evolve," Williams said. "Given the uncertain effects of recently announced tariffs and other policy changes, there is an unusually wide range of outcomes that could transpire."
He did, however, warned that PCE inflation could accelerate back to as high as 4% this year, with unemployment in 2026 at risk of rising to has high as 5%.
Benchmark 10-year note yield rose another 4 basis points following his remarks to trade at 4.582%, while 30-year bonds were last marked at 4.984%.
Updated at 10:10 AM EDT
Michigan blue(s)
A grim reading of consumer sentiment and inflation expectations from the University of Michigan's monthly survey has pushed Treasury yields higher yet again in early trading, adding deeper angst to the broader financial markets.
The survey's headline sentiment index slumped 7 points to 50.8 points in March, while year-ahead inflation expectations soared to 6.7%, the highest reading since November of 1981.
Benchmark 10-year Treasury yields were last-marked at 4.521%, an 11 basis point increase from overnight levels, with 30-year bonds trading at 4.927% following the biggest weekly slump in more than four decades.
Related: Bond, dollar rout spark concerns of safe-haven status of U.S. assets
Updated at 9:36 AM EDT
Red open
The S&P 500 was marked 31 points, or 0.6% lower in the opening minutes of trading, with the Nasdaq down 74 points 0.44%.
The Dow Jones Industrial Average fell 2200 points while the Russell 2000 fell 11 points, or 0.58%
Benchmark 10-year note yields were last up 9 basis points on the session at 4.501% while 30-year bonds were back testing 5% and trading at 4.931%.
Updated at 8:36 AM EDT
Factory gate easing
Producer price inflation contracted last month, the Commerce Department reported, with the annual gain slowing sharply from last year as trade likely slowed in the wake of President Trump's tariff announcement and the pullback in global oil prices.
Headline PPI was marked at 2.7%, well inside the Street's 3.3% forecast, with the monthly decline pegged at -0.4%.
Paired with Thursday's cooler-than-expected CPI report, the combined inflation data could raise the chances of a Federal Reserve rate cut in May, which the CME Group's FedWatch currently pegs at around 28%.
Updated at 7:59 AM EDT
Whip it
Stocks are turning lower in the premarket, despite some solid bank earnings, with the S&P 500 called 2 points lower and the Nasdaq now drifting into a negative opening bell.
Markets are closing tracking moves in the bond market, where long-date paper has risen the most over the past week, (in terms of yield) since 1982. Benchmark 10-year notes were holding at 4.409% while 30-year bonds were trading at 4.863%.
"As far as the markets are concerned, it’s all about tariffs. The danger is that something is announced, whether good or bad, over a weekend, thereby forcing a dramatic reaction as markets reopen on a Sunday evening," said David Morrison, Senior Market Analyst at Trade Nation.
"This is typically when markets are at their most illiquid, meaning that moves can be violent," he added.
Updated at 7:05 AM EDT
Bank on it
JPMorgan shares jumped higher following a better-than-expected first quarter earnings report, which was boosted by 21% surge in profits from its trading book, even as it set aside $3.3 billion to cushion potential loan losses.
"The economy is facing considerable turbulence (including geopolitics), with the potential positives of tax reform and deregulation and the potential negatives of tariffs and “trade wars,” ongoing sticky inflation, high fiscal deficits and still rather high asset prices and volatility," said CEO Jamie Dimon.
JPMorgan shares were marked 2.76% higher in premarket trading to indicate an opening bell price of $233.37 each.
Related: JP Morgan earnings provide Wall Street boost, but tone remains cautious
Stock Market Today
Stocks end sharply lower again last night, with the S&P 500 falling 3.46% on the session as the rally stoked by President Donald Trump's decision to pause his so-called 'reciprocal' tariffs fizzled quickly in the face of rising bond yields and a slumping dollar.
The 'sell America' trade, which has included the dumping of around $6.5 trillion in U.S. stocks by foreign investors over the past week, according to data from Bank of America, has dragged the U.S. dollar index to the lowest levels since April of 2022 and raised broader questions over the nature of U.S. assets as safe-haven investments.
The dollar index, which tracks the greenback against a basket of six major global currency peers, was last marked 1.37% lower at 99.495 heading into the start of the New York trading session.
Gold prices, however, were back marching higher, with the bullion topping $3,200 per ounce in overnight trading to extend its weekly gain past 5% and its annual rise past 21%.
Benchmark 10-year note yields, meanwhile, a proxy for risk free rates in markets around the world, edged to 4.411% in overnight trading, a level that is around 2 basis points higher than when President Trump issued his 90-day pause at mid-day on Wednesday.
U.S. assets are likely to be tested again today after China boosted its retaliatory levy on American imports to 125%, starting on April 12, a move that, with U.S. tariffs on China-made goods at 145%, effectively amounts to a trade embargo between the world's two biggest economies.
Related: Did Treasury bond markets cause Trump tariff blink?
China did say, however, that this would be the last of their tariff-related increases, although it left open the option to hit back with other tools if the U.S. were to escalate its trade war further.
"Given that American goods are no longer marketable in China under the current tariff rates, if the U.S. further raises tariffs on Chinese exports, China will disregards such measures," China's Finance Ministry said.
On Wall Street, investors are bracing for another volatile session to close out an historic week, with the CBOE Group's VIX index pegged at $44.03 heading into the start of trading.
At that level, options traders expect daily swings of around 2.75%, or 145 points for the S&P 500 over the next thirty days.
Against that risk, JPMorgan ( JPM ) , Wells Fargo ( WFC ) and Morgan Stanley ( MS ) will all publish first quarter earnings updates prior to the start of trading, with investors keying on the profit outlooks fore each of the three major banks, as well as any increase in capital they plan to set aside to cushion losses in their credit and lending portfolios as the economy slows.
Related: Bond markets whipsaw amid 'sell America' trade in safe-haven Treasuries
Heading into the start of the trading day, futures contacts tied to the S&P 500 suggest the benchmark will open 21 points higher from last night's close, which is now around 4.75% higher from Wednesday post-tariff pause rally.
Futures tied to the Dow Jones Industrial Average, meanwhile, are priced for a 75 point bump with the tech-focused Nasdaq called 85 points higher.
More Economic Analysis:
In overseas markets, Europe's Stoxx 600 fell 1.17% in mid-day Frankfurt trading, with the FTSE 100 down 0.22% in London.
Overnight in Asia, Japan's Nikkei 225 ended 2.96% lower following last night's slump on Wall Street, while the regional MSCI ex-Japan benchmark rose 1.37% into the close of trading.