Stock Market Update Thursday April 10, 2025

Stock Market Update Thursday April 10, 2025 Yesterday’s brief relief rally unraveled as the S&P 500 slid 3.5%, with the SPDR S&P 500 ETF Trust underperforming, dropping 4.4%—a notable divergence.

Away From Stocks: Long-duration Treasurys remained under pressure, with 30-year yields spiking 14 basis points to 4.86% despite a reasonably strong auction. The two-year yield eased to 3.84% from 3.91% on Wednesday, reflecting a modest bid for safety. In commodities, WTI crude declined 3.5% to $60 per barrel, while gold surged 3% to a record $3,172 per ounce. Bitcoin fell back below $80,000, and volatility spiked, with the VIX closing just above 40 after nearing 55 intraday.

QT Progress Report:

Reserve Bank credit contracted by $8.5 billion over the past week, reducing the total balance sheet to $6.679 trillion. Over the past four weeks, the Federal Reserve’s portfolio of interest-bearing assets has declined by $33 billion, marking a 25.1% drawdown from its peak level in early 2022. This ongoing reduction underscores the Fed’s continued commitment to balance sheet normalization under its quantitative tightening (QT) framework.

Let me know if you'd like to incorporate more granular insights—such as the composition of the runoff across Treasurys vs. agency MBS, or how this pace aligns with the Fed’s monthly caps and longer-term QT targets.

Market Timing, Tariff Rhetoric, and Technical Confluence

Right after European stock markets closed, and as U.S. stocks were near their lowest points of the day, three important news items increased market volatility: