Finance

Stock market posts third biggest gain in post-WWII history on Trump’s tariff about-face

Published

2 months ago

April 9, 2025

Business Finance News

Trader work on the floor at the New York Stock Exchange.

Brendan McDermid | Reuters

Wednesday’s jaw-dropping stock-market rally on President Donald Trump’s surprising tariff reversal is one for the history books.

The S&P 500 skyrocketed 9.52% in a kneejerk reaction to Trump’s announcement to put a 90-day pause on some of the lofty ‘reciprocal’ tariffs. The one-day gain ranks as the third biggest since World War II for the main stock market benchmark, according to FactSet.

The Nasdaq Composite jumped 12.16%, notching its largest one-day jump since January 2001 and second-best day ever.

“This is the pivotal moment we’ve been waiting for,” said Gina Bolvin, president of Bolvin Wealth Management Group. “The immediate market reaction has been overwhelmingly positive, as investors interpret this as a step toward much-needed clarity.”

The market was a coiled spring after a brutal four-day stretch that briefly pushed the S&P 500 into bear-market territory. Over the course of the previous four trading sessions, the S&P 500 suffered a 12% loss, a decline not seen since the pandemic. The Dow lost more than 4,500 points during the four-day stretch, while the Nasdaq was down more than 13%.

While stocks managed to recoup much of the losses, investors are not completely out of the woods as Trump vows to reorient global trade. The president said more than 75 countries contacted U.S. officials to negotiate after he unveiled his new tariffs last week.

“It’s still too early to signal an all clear,” said Dave Sekera, Morningstar’s chief U.S. market strategist. “Trade negotiations have yet to start and once they do, there will be positive and negative headlines as each party positions itself to extract the maximum amount of concessions possible.”

Finance

Stocks making the biggest moves midday: WOOF, TSLA, CRCL, LULU

Published

1 day ago

June 6, 2025

Business Finance News

Finance

Swiss government proposes tough new capital rules in major blow to UBS

Published

1 day ago

June 6, 2025

Business Finance News

A sign in German that reads “part of the UBS group” in Basel on May 5, 2025.

Fabrice Coffrini | AFP | Getty Images

The Swiss government on Friday proposed strict new capital rules that would require banking giant UBS to hold an additional $26 billion in core capital, following its 2023 takeover of stricken rival Credit Suisse.

The measures would also mean that UBS will need to fully capitalize its foreign units and carry out fewer share buybacks.

“The rise in the going-concern requirement needs to be met with up to USD 26 billion of CET1 capital, to allow the AT1 bond holdings to be reduced by around USD 8 billion,” the government said in a Friday statement, referring to UBS’ holding of Additional Tier 1 (AT1) bonds.

The Swiss National Bank said it supported the measures from the government as they will “significantly strengthen” UBS’ resilience.

“As well as reducing the likelihood of a large systemically important bank such as UBS getting into financial distress, this measure also increases a bank’s room for manoeuvre to stabilise itself in a crisis through its own efforts. This makes it less likely that UBS has to be bailed out by the government in the event of a crisis,” SNB said in a Friday statement.

‘Too big to fail’

UBS has been battling the specter of tighter capital rules since acquiring the country’s second-largest bank at a cut-price following years of strategic errors, mismanagement and scandals at Credit Suisse.

The shock demise of the banking giant also brought Swiss financial regulator FINMA under fire for its perceived scarce supervision of the bank and the ultimate timing of its intervention.

Swiss regulators argue that UBS must have stronger capital requirements to safeguard the national economy and financial system, given the bank’s balance topped $1.7 trillion in 2023, roughly double the projected Swiss economic output of last year. UBS insists it is not “too big to fail” and that the additional capital requirements — set to drain its cash liquidity — will impact the bank’s competitiveness.

At the heart of the standoff are pressing concerns over UBS’ ability to buffer any prospective losses at its foreign units, where it has, until now, had the duty to back 60% of capital with capital at the parent bank.

Higher capital requirements can whittle down a bank’s balance sheet and credit supply by bolstering a lender’s funding costs and choking off their willingness to lend — as well as waning their appetite for risk. For shareholders, of note will be the potential impact on discretionary funds available for distribution, including dividends, share buybacks and bonus payments.

“While winding down Credit Suisse’s legacy businesses should free up capital and reduce costs for UBS, much of these gains could be absorbed by stricter regulatory demands,” Johann Scholtz, senior equity analyst at Morningstar, said in a note preceding the FINMA announcement.

“Such measures may place UBS’s capital requirements well above those faced by rivals in the United States, putting pressure on returns and reducing prospects for narrowing its long-term valuation gap. Even its long-standing premium rating relative to the European banking sector has recently evaporated.”