The red line was the sovereign bond markets. It was the flash selloff in US Treasuries over the past few days that finally made Donald Trump take a step back from his tariff strategy. Equities rebound by big chunks, treasury yields are down, the US dollar and oil recover but I wouldn’t pop the champagne just yet. We’ve already seen how the uncertainty alone has hit businesses.

Delta Airlines lowered its earnings guidance, citing global trade tensions. Amazon cancelled orders for China-sourced products to cut exposure to Chinese supply and let’s not forget: China remains a critical market for companies like Apple and Nike. So yes—some relief, but tread carefully.

Uncertainties will persist, though yesterday’s rebound rests on solid ground. We could see it extend—if Trump can just stay quiet for a few days, let the market digest the news, and watch how companies react. On the data front, the US CPI update is due today and should land with a bit less tension. The Federal Reserve (Fed) has remained relatively quiet during the selloff, simply noting that policy is “in a good place” amid growth and inflation uncertainties. Recession bets may have eased yesterday, but they’re still far higher than before Trump took office. Markets presently price in more than a 10% chance of a 50bp cut in June.

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