Good morning. US Defense Secretary Pete Hegseth has ordered the termination of IT and consulting contracts with companies like Accenture and Deloitte, saying the contracts represent “$5.1 billion in wasteful spending.” Hegseth also said he was terminating contracts that support “non-essential” activities, like DEI, climate matters, and the Pentagon’s COVID-19 response. Read the full story.
In today’s newsletter, Goldman Sachs sees more pain ahead for the stock market — and China just retaliated to US tariffs, again.
What’s on deck
Markets: The dollar and Treasurys are nosediving in the ‘Sell America’ trade.
Tech: Amazon will pay higher prices to some vendors to offset tariffs impact — but with a catch.
Business: President Trump’s tariff reprieve only means more uncertainty for CEOs.
But first, it’s not over.
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The big story
The tariff saga continues
It might not have been enough. Goldman Sachs warned on Thursday morning that Trump’s 90-day tariff pause is unlikely to stop the stock market falling further. They were proven correct almost immediately.
US indexes were back in sell-off mode, with the Dow Jones Industrial Average shedding 2,181 points at its intraday low before paring gains ahead of the close.
Goldman Sachs’ equity drawdown risk model, which bases its probability of further market downside on a handful of indicators, recently spiked past 35% on both a three-month and a 12-month horizon. That’s a strong signal that the S&P 500 is headed for further declines, the bank wrote in a note.
Analysts said several factors, including policy uncertainty and recent volatility, had raised the risk of more downside. Here’s what Goldman is watching.
Wall Street still sees the tariffs as bad news.
Investors are particularly concerned about the escalating trade war between the US and China — which did not get a reprieve from Trump. The US’s tariff rate against Chinese imports is now 145%.
Early this morning, China hit back again, announcing it will raise tariffs on all US goods from 84% to 125% starting on April 12.
That could further hurt companies like Tesla. Since Wednesday, the automaker has received three price target cuts from Wall Street firms, all predicting that higher costs due to tariffs will weigh on the business.
3 things in markets
Peter Dazeley/Getty Images
1. Greenback blues. Investors are selling off US dollars and Treasurys, once considered safe assets, as the trade war ratchets up economic uncertainty. Ex-Treasury Secretary Larry Summers said on Wednesday that the US is being treated as if it were a “problematic emerging market.”
2. “The Big Short” investor Kyle Bass thinks the US might need a “brief recession” to reset. Amid President Trump’s tariff moves, the veteran investor told Bloomberg TV that the US needs to work on its trade relationships and narrow its fiscal deficit.
3. Expect some familiar faces in the next wave of multistrategy funds. Citadel, Millennium, and Point72 dominate the industry, but that means there’s a huge talent pool for smaller rivals to draw from. Managers like Balyasny, Walleye, and Jain Global are hiring their alums.
3 things in tech
Kimberly White/Getty Images for WIRED
1. Mira Murati stares down historic funding round with new AI startup. OpenAI’s former CTO doubled the fundraising target for Thinking Machines Lab to $2 billion, sources told BI. It could be the largest seed round in history — and remarkable for a startup less than a year old.
2. How’s Apple going to get out of its China jam? Trump’s tariff pause didn’t include China, which currently faces a 145% markup on products shipped from there. That’s a big problem for Apple, which depends on the country for iPhones. Luckily, CEO Tim Cook has been here before.
3. Amazon wants to save some vendors from tariff pain, but not all. The company is paying higher prices to vendors on a “case-by-case basis” to “share the tariff impact,” according to a document obtained by BI. However, it’s unclear how Amazon chooses which price increases to accept, several vendors told BI.
3 things in business
Temu; Getty Images; Chelsea Jia Feng/BI
1. It may be your last chance to order from Temu without a giant fee. Temu and Shein are known for their cheap offerings, but President Trump is about to start tacking on steep duty fees. BI’s Katie Notopoulos thinks now is the time to get your orders in.
2. Trump paused tariffs, but CEOs are still screwed. The 90-day delay gives some leaders room to breathe, but the big-picture uncertainty hasn’t subsided. The unpredictability of the Trump administration is paralyzing CEOs’ decision-making.
3. MrBeast wants to build the next Disney. The CEO of Beast Industries drew the comparison when pitching prospective investors. Like Disney, MrBeast’s company aims to diversify its IP.
In other news
What’s happening today
- JPMorgan, Morgan Stanley, and Wells Fargo report Q1 earnings.
- Coachella begins.
The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York (on parental leave). Hallam Bullock, senior editor, in London. Amanda Yen, associate editor, in New York. Lisa Ryan, executive editor, in New York. Ella Hopkins, associate editor, in London. Elizabeth Casolo, fellow, in Chicago.