Trump's Liberation Day Has Arrived, and Markets Are Nervously Awaiting Developments on U.S. Tariffs

President Trump's so-called Liberation Day has arrived, and markets are nervously awaiting developments on U.S. tariffs. Even within the administration, the mood appears far from optimistic.

President Trump's so-called Liberation Day has arrived, and markets will be nervously awaiting developments on U.S. tariffs, even as pessimism deepens within the administration over a possible recession, City Index analyst Tom Demer penned in a market commentary.

Commerce Secretary Howard Lutnik is reportedly in the crosshairs, with suggestions he may become the scapegoat for favoring overly aggressive tariffs if the U.S. were to head into a recession, according to The Independent, a U.K. online newspaper.

A recession looks likely according to the Atlanta Fed's GDPNow model, which is projecting a first-quarter contraction of -3.7% for U.S. real GDP. That is a dramatic downward revision from earlier estimates: +3.9% two months ago, +2.3% one month ago and -1.8% just two weeks ago.

While Trump has yet to disclose which country the tariffs will target, an announcement is scheduled for after the stock market closes at 4 p.m.

Bitcoin (BTC) is meanwhile remaining unfazed, trading little changed on the day and remaining above the $85,000 mark. U.S. equities finished higher on Tuesday, although futures are pointing slightly negative heading into Wednesday.

At present, bitcoin is lagging 25% below its January 20 all-time high of $109,000, placing it in the middle of the performance range of the "Magnificent 7" tech stocks.

Apple is lagging 17% below its all-time high, Microsoft 22%, Amazon 24%, Meta 25%, Google 26%, NVIDIA 32% and Tesla 50% below their respective all-time highs.

The cryptocurrency's resilience becomes evident when comparing it to past cycles. In 2022, BTC saw a steeper decline of 75% from its peak to a low of $15,500, compared to a 34% drop for the Nasdaq-100 ETF (QQQ).

This year, bitcoin has decreased by 30%, while QQQ has fallen by 16%, indicating a relative drawdown of 1.87 times for bitcoin. This suggests that bitcoin is becoming more resilient over time, even though volatility remains a defining characteristic.

However, a lot will depend on the tariff announcement and how markets react to it. Stay tuned!

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