US stocks climb, shrugging off China trade war and consumer fears
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(NEW YORK) — U.S. stocks climbed on Friday, shrugging off new Chinese tariffs on American goods that intensified a trade war between the two largest economies in the world.
The Dow Jones Industrial Average jumped 440 points, or 1.1%, while the S&P 500 surged 1.4%. The tech-heavy Nasdaq increased 1.6%.
Meanwhile, a selloff of 10-year Treasuries sent yields climbing to 4.46%. That figure neared a recent high attained hours before President Donald Trump announced on Wednesday a 90-day delay of so-called “reciprocal tariffs” for most U.S. trade partners.
A University of Michigan survey of shopper sentiment on Friday showed consumer attitudes fell more than expected in April, dropping to a level lower than any recorded during the Great Recession.
The market turmoil Friday morning came after China issued a 125% U.S. tariff, though Beijing said it would not increase tariffs further. The move came in response to a 145% tariff on Chinese goods announced by Trump earlier this week.
Larry Fink, the CEO of financial firm BlackRock, which manages about $11.5 trillion in assets, warned that the U.S. economy is poised for a downturn.
“I think we’re very close, if not in, a recession now,” Fink told CNBC.
In a social media post on Friday, Trump signaled confidence.
“We are doing really well on our TARIFF POLICY. Very exciting for America, and the World!!! It is moving along quickly,” Trump said on Truth Social.
U.S. markets closed Thursday with notable losses, a reversal from the enthusiasm unleashed by Trump’s Wednesday decision to pause some tariffs.
Several Asian stock markets slid back into the red on Friday morning, reversing gains made on Thursday amid continued uncertainty as to whether nations would be able to secure deals with Trump to avoid long-term tariffs — and as China announced new retaliatory tariffs on American goods.
Tokyo’s Nikkei 225 index slipped 3.8% and Japan’s broader TOPIX index fell 3.5%. In South Korea, the KOSPI dropped nearly 1% and Australia’s S&P/ASX 200 dipped 0.95%.
In China, markets fluctuated as investors responded to the White House clarifying that the level of tariffs on Chinese goods is now 145% — not 125% as previously believed.
Hong Kong’s Hang Seng index rose 2%, Shanghai’s Composite Index rose 0.6% and Shenzen’s Component Index rose 1.2%, with investors buoyed by Beijing’s announcement of stimulus measures to bolster the economy against the escalating American tariffs.
Other prominent Asia indices in the green on Friday included Taiwan’s Taiex index up 2.7% and India’s NIFTY 50 up 1.9%.
European markets appeared hesitant upon opening and slipped after China announced it would increase tariffs on U.S. goods from 84% to 125% from Saturday.
On Thursday, Trump again hinted at the resumption of his sweeping tariffs.
“If we can’t make the deal we want to make or we have to make or that’s, you know, good for both parties — it’s got to be good for both parties — then we go back to where we were,” Trump said.
When asked if he would extend the 90-day pause, the president responded, “We’ll have to see what happens at the time.”
(NEW YORK) — An Elon Musk ally hired to overhaul the U.S. Department of Treasury has a lengthy record of undertaking hardline reforms in the private sector that demoralized staff and made them fear for their jobs, according to interviews with several former employees at his tech firm.
Tom Krause, the CEO of Silicon Valley-based Cloud Software Group, oversaw layoffs at his company in each of the last three years while instituting a return-to-office mandate, rigid performance ratings, and a request that weekly updates be sent from workers directly to Krause, the former employees told ABC News — echoing the sort of reforms that Musk’s new Department of Government Efficiency has begun undertaking within government agencies.
One former Cloud Software Group employee said she hid her pregnancy for fear it could make her a target of layoffs. An ex-manager said they dreaded filing performance reviews of subordinates, knowing some workers may fall victim to the next cycle of cuts. Another former employee said they avoided expressing unease in company emails or in the messaging app Slack out of concern that it could jeopardize their job.
“They’re taking business practices popular in boardrooms and on golf clubs, and they’re taking them into government,” Kathleen Roan, a former senior content designer at Cloud Software Group who retired in 2024, told ABC News.
Krause in recent days has vaulted into a key position at the Treasury Department, overseeing its $5 trillion payment system, which sends funds to tens of millions of Americans for programs like Medicare and Social Security, the agency’s website says.
In a press release, the agency said Krause brings decades of experience “managing balance sheets” to the agency’s effort to “maximize payment integrity.”
Neither Krause nor Cloud Software Group responded to a request for comment from ABC News.
A ‘hatchet man’
Several former employees ABC spoke with praised Krause as a savvy business leader, and one said they enjoyed their tenure at the company. But most of them requested that they not be identified due to concerns about reprisals.
“There was a whittling away of the things that made you feel like you were a valued employee and then finally ‘Oh, now we’re going to start eliminating jobs,'” Roan said of her time at the company under Krause. “They saw people as expendable.”
Cloud Software Group company was established in 2022 through the acquisition of enterprise software firm Citrix in a private equity-backed $16.5 billion deal, followed by a merger with TIBCO Software.
Krause, who had previously served as president of software at Palo Alto-based Broadcom, was named CEO of the new firm.
Within months, in January 2023, the company cut 15% of its workforce.
“The feeling was that he was there to cut expenses down and be a hatchet man, similar to what’s happening now in the government,” a former human resources employee said. “Everyone was on edge.”
Some of the cost-cutting measures at Cloud Software Group under Krause were first reported by The American Prospect.
Within months of Krause’s arrival, the company also requested that employees return to the office, multiple former employees said.
At the same time, the company closed some offices in an effort to reduce overhead costs, multiple former employees told ABC News. The closures left some workers without an office nearby, making them exempt from the return-to-office requirement, a former employee said.
On Inauguration Day, Trump signed an executive order calling on federal agency heads to mandate in-office work. Musk backed that policy in an op-ed he co-authored in the Wall Street Journal, predicting that mandatory return to work “would result in a wave of voluntary terminations that we welcome.”
‘A much higher level of business discipline’
Employees at Cloud Software Group lost some perks, too.
David Morgan, a former client support provider at Cloud Software Group, said the firm ended his quarterly bonuses, which amounted to $16,000 each year. Workers also stopped receiving “thank you” days, an extra allotment of paid time off, Morgan said.
“Everything we were told would be benefits at the time of hiring was slowly removed,” Morgan said. An Air Force veteran with a disability, Morgan said he received one day of notice before he lost his job as part of a round of layoffs in January 2024, after having been assured that his position had been safe over the months prior.
In a post on LinkedIn that month, Krause said the company had improved but still required personnel changes.
“Our focus on adding value for our long-standing customers while driving a much higher level of business discipline and accountability is bearing fruit — with customer retention and financial results for our first fiscal year as Cloud Software Group coming in ahead of plan,” Krause said.
“But change often means difficult decisions,” he wrote. “While we have a number of areas of the business where our plans involve additional hiring to support our goals, they also mean a pragmatic look at those places where we simply need fewer or different resources.”
In a direct message to Krause over LinkedIn days later, Morgan wrote, “It’s challenging to reconcile my dedication and commitment to the company with the feeling of being let go in a way that seemed to lack empathy.” It does not appear that Krause responded, according to a screenshot of the conversation reviewed by ABC News.
Another policy shift under Krause brought the implementation of employee-performance ratings on a scale of one to three, multiple former employees said.
The ratings took a toll on one former manager, who said the company required them to label at least one subordinate as a low performer. “I had to give one person a low score, even if I thought they didn’t really deserve a low score,” they said. “It was miserable.”
Rating systems have reportedly been deployed as part of the Trump administration’s recent push to cut staff. Senior staff across the Department of Health and Human Services were told to rank thousands of employees in probationary periods, with as much as 40% to be deemed non-mission critical, the Washington Post reported.
‘It’s very alarming’
Daniel Keum, a professor of management at Columbia University Business School, said the apparent overlap between cost-cutting initiatives at Cloud Software Group and some federal agencies exemplifies the Trump administration’s use of tactics borrowed from the private sector.
“In tech, there’s a mentality that you have to break things to make them a lot better,” Keum told ABC News. “When transposed into federal agencies, that mentality becomes very dicey.”
Nearly all former employees who spoke to ABC News expressed shock or concern about the role at the Treasury taken up by Krause, though one expressed indifference and another voiced support.
“It’s very alarming,” said Roan, the former Cloud Software Group design architect.
“He should absolutely not have anything to do with the U.S. Treasury Department,” said Morgan.
In contrast, a former account executive at the company applauded the choice of Krause for the Treasury role, citing his financial acumen.
“I don’t think you can find a better person to swim in the weeds [and] sit in the edifice of the Treasury Department,” the person said.
In January, Cloud Software Group conducted another round of layoffs. That same month, Krause sent an email to all employees asking them to voluntarily send him a message at the end of each week “telling me what you accomplished,” according to a copy of the email reviewed by ABC News.
The approach draws on best practices from “two great entrepreneurs and CEOs that lead the most valuable companies in the world,” Krause wrote, naming Musk and Nvidia CEO Jensen Huang.
In a separate email in recent days, Krause told employees that he plans to continue in his role at the company during his time at the Treasury, according to a copy of the email reviewed by ABC News that was first reported by CRN.
“I am honored to serve our country,” Krause wrote. “Let me be clear — as CEO of Cloud Software Group, I am committed to our company and to you, our employees.”
(NEW YORK) –U.S. stocks were mixed at the open of trading on Wednesday, extending days-long turmoil in markets as tit-for-tat tariffs between the U.S. and China heightened the risk of a global trade war and worsened fears of a recession.
The Dow Jones Industrial Average opened down 315 points, or 0.8%, while the S&P 500 fell 0.4%.
The tech-heavy Nasdaq ticked up 0.03%.
Meanwhile, a selloff hit U.S. Treasury markets on Wednesday, sending bond yields higher and raising concern about a typical safe-haven asset during moments of instability for stocks.
President Donald Trump’s latest batch of levies on China increased the cumulative rate of tariffs on Chinese goods to 104% — a move met with retaliatory tariffs in Beijing that raised tariffs on U.S. goods to 84%.
The latest U.S. tariffs came into force with key Asian markets already open. In Japan, the Nikkei index dropped more than 5% in response, while the broader TOPIX index slipped 4.6%. The Nikkei closed down 3.93% and the TOPIX down 3.4%.
Stocks in Taiwan fell more than 5.7%, Singapore’s STI index slipped 2.4%, South Korea’s KOSPI index lost 1.8%, Australia’s S&P/ASX 200 lost 1.8% and India’s NIFTY 50 dropped 0.4%.
In China, Hong Kong’s Hang Sen index slipped 0.4%. Shanghai’s SSE Shanghai Composite Index — which has fewer international investors and is buoyed by the state-owned investors known as the “National Team” — posted gains of 1.1% despite the new tariffs. Shenzhen’s SE Composite rose 2.2%.
In Europe, key indices dropped on opening.
The British FTSE 100 dropped by 2.2%, Germany’s Dax index dropped 2.3%, France’s CAC 40 fell by 2.4% and Spain’s Ibex index was down 2%. The pan-European STOXX index was down 2.6%.
United States stocks closed lower on Tuesday, marking a major reversal from a rally that sent the S&P 500 and Nasdaq up more than 4% earlier in the day.
The Dow Jones Industrial Average closed down 320 points, or 0.8%, while the Nasdaq dropped 2.1%.
The S&P 500 fell 1.5%, putting the index on the brink of a bear market, a term that indicates a 20% drop from a previous peak.
The move lower on Tuesday resumed a selloff that stretches back to Trump’s tariff announcement last week. Since then, the S&P 500 and Nasdaq have each fallen more than 12%.
(NEW YORK) — Stock markets struggled into Wednesday morning as it became clear that President Donald Trump intended to announce a slew of tariffs on America’s trading partners, with the White House preparing to mark what it is calling “Liberation Day.”
The S&P 500 and NASDAQ both posted their first quarterly losses since 2022 this week as investors prepared for the new measures and economists warned of the possibility of a recession — with major potential knock-on effects for other economies around the globe.
The Dow Jones, S&P 500 and NASDAQ futures were all slipping on Wednesday morning, with Dow Jones futures down by about 100 points.
Trump is set to make his tariff announcement in the White House Rose Garden on Wednesday after the stock market closes.
Abroad, the British FTSE 100 index dropped by more than 0.6% on Wednesday morning, with Germany’s DAX index down by 1.2%. The French CAC 40 index was down more than 0.5%.
Japan’s Nikkei index rose nearly 0.3%, but South Korea’s KOSPI index dropped by more than 0.6%.
On Tuesday, the Dow Jones ended at 41,989.96 down 0.03%. The S&P 500 ended at 5,633.07 up 0.38% and the NASDAQ ended at 17,449.89 up 0.87%.
Automakers and pharmaceutical companies have reportedly been lobbying the Trump administration for carve outs and a phase-in approach for the promised tariffs.
World leaders have threatened a response while pressing the White House for clarity.
