Bessent brushed off stock-market losses after tariff announcement. He also gave a glimmer of hope.

MW Bessent brushed off stock-market losses after tariff announcement. He also gave a glimmer of hope.

By Steve Goldstein

Treasury Secretary Scott Bessent gave a flip answer to stock-market concerns following the tariff announcement - but he also provided a ray of hope.

Bessent told Bloomberg Television late on Wednesday that he has learned "not to look at what goes on in after-hours markets."

Those losses extended into Thursday, with the Dow industrials contract (YM00) down over 1,000 points.

"In my old business, I was very concerned about market movements and I'm trying to be secretary of Treasury and not a market commentator. What I would point out is that, especially the Nasdaq, peaked on DeepSeek day," he said, referring to the low-cost Chinese AI service.

"So that's a Mag 7 problem, not a MAGA problem," he added, referring to the grouping of stocks called the "Magnificent Seven" and the Make America Great Again slogan of President Donald Trump.

The Roundhill Magnificent Seven ETF MAGS slumped 5% in premarket trade, while small caps also were hammered, with the Russell 2000 futures (RTY00) contract also down 5% and on the verge of entering a bear market.

Bessent suggested that other countries shouldn't retaliate because tariffs may be lowered.

"I think the market could have certainty that this is the number, barring retaliation. So we've got a ceiling and then we can see if there's a different floor," he said.

That said, Bessent said Trump may not be in a hurry to lower tariffs. "I think the mindset might be to let things settle for a while," he said.

Bessent's comments that tariffs could be increased after other countries retaliate suggests the trade war is only beginning, said Daniel Murray, deputy chief investment officer at EFG, a Swiss private bank. "This suggests that we are not done yet and should expect further rounds of tit-for-tat measures in a potentially damaging cycle of mistrust," he said.

Tom Lee, the head of research at Fundstrat Global Advisors, says the tariff levels are so high as to be "absurd."

"The unveiling of new U.S. tariff terms has jolted markets, but the extreme nature of the proposed measures points to a high likelihood that these will ultimately prove short-lived," he says.

-Steve Goldstein

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

April 03, 2025 08:08 ET (12:08 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.