Meanwhile, we saw a much better than expected NFP report on Friday – the nonfarm payrolls jumped nearly 230K last month, even government jobs increased by 19K, wages growth came in lower than expected but unemployment rose slightly. In all cases, the latter saw little reaction as Federal Reserve (Fed) President Jerome Powell said that the impact of tariffs on the US economy could be higher than expected, adding that there is no rush to cut rates. That was the last nail in the coffin.

The S&P500 lost 6%, bringing two-day losses to about 10%. The index is down by more than 17% since the February peak and has slipped below the major 38.2% Fibonacci retracement on the AI rally. Nasdaq 100 lost another 6% on Friday, as well. Accumulated losses since the February peak are already above 20% for the tech-heavy index. The Dow Jones is also in the bearish consolidation zone while the small and mid-caps that were supposed to be the best Trump trades are the most hit. They lost between 60 and 80% of the post-election gains already.

Elsewhere, the CSI 300 is down by more than 6% despite the Chinese pledge to step in and ease the financial conditions significantly to support the economy, the Hang Seng is down more than 10%. Wherever we look this morning, it’s a bloodbath. The S&P500 is down by almost 4% at the time of writing, Nasdaq futures are down by more than 4%, same for the European futures and the week hasn’t even started yet. Even gold is no longer willing to play. The price of an ounce tanked around 2.50% on Friday and was lower this morning – though the ugly market selloff should keep gold appetite quite strong.

So, if you’re wondering where does the capital flow? It flows to into the government bonds – the US, the German, the Japanese, the Australian yields are all down on the growing expectation that the financial turmoil will soon bring the central banks back to cutting rates and to purchasing bonds to ensure stability... The US 2-year yield is down to 3.50% despite Powell’s message that there is no rush to cut rates. Investors know: if the selloff continues, the central banks will have no choice.

In the FX, the US dollar was better bid in the last hours of trading of last week, but the greenback is plunging again this morning against major peers. The Japanese yen and the Swiss franc are amassing the safe haven flows.

In energy, the barrel of US crude lost more than 6% last Friday and tipped a toe below the $60pb level this morning as Saudi cut its oil price to Asia to a four-month low on rising recession odds. The outlook remains comfortably negative with the possibility of a further fall toward the $50pb level. Price recoveries could be interesting top selling opportunities.

This week

The US will release its latest CPI update, and it’s expected to have eased on y early basis - except for monthly core inflation. But that doesn’t matter, really. The Fed’s gotta do what it’s gotta do to fix the situation before it can fix inflation — probably. So this week’s inflation report will likely go unheard.

More interestingly, the US earnings season kicks off this week with the big banks due announce Q1 earnings. TSMC will also report its March sales on Thursday. Attention will be on companies’ forecasts regarding the tariff chaos, and how bad they see the future with heavily disrupted global supply chains. 64% of the S&P500 companies have already downgraded their earnings projections – that’s a good thing as it means that a part of the damage is already priced. But with nearly 70% of the US GDP coming from spending, it will be hard for companies to do fine with massive tariffs.

All this being said, I believe we will be seeing incredible buying opportunities in a few weeks. Keep calm and don’t forget that markets always bounce back.