CNBC Daily Open: Consumers are worried over the economy. The White House insists it’ll be fine

A day without major tariff developments from U.S. President Donald Trump’s administration is, for markets, a day of cautious optimism (or at least what passes as “optimism” in such unusual times). There was breathing room on Monday for markets to make tentative moves upward, especially after the news, out late Friday, of a last-minute exception for electronics from so-called reciprocal tariffs. 

White House officials are still making their rounds on major news channels to preach the sense of Trump’s economic policy. The latest to do so is National Economic Council Director Kevin Hassett, who, on Fox Business, said Monday the country would “100% not” fall into a recession this year.

Consumers don’t share that faith. A Federal Reserve survey, conducted in March and released Monday, is the latest in a series of consumer surveys that show sentiment over the economy slumping. Any gains in the market, then, could last only as far as tariff don’t run further amok and cause economic damage, despite White House officials’ attempts to reassure on the latter front.

U.S. markets made tentative gains
U.S. stocks rose Monday, aided by a slight recovery in tech names on news of a tariff exemption for electronic goods. The S&P 500 rose 0.79%, the Dow Jones Industrial Average climbed 0.78% and the Nasdaq Composite advanced 0.64%. Europe’s regional Stoxx 600 index added 2.69%. Novo Nordisk rose 3.7% after competitor Pfizer scrapped the development of its experimental daily weight-loss pill over a liver injury in one patient.

Hassett says no chance of recession
U.S. National Economic Council Director Kevin Hassett said Monday that “more than 10” countries had made “very good, amazing” trade deal offers to the U.S. He also said that there was no chance at all that the U.S. will experience a recession in 2025. A Federal Reserve Bank of New York survey released the same day — but conducted before April 2 — showed consumer worries in March growing over inflation, unemployment and the stock market.

Volatility from zero-day options
Zero-day-to-expiration options are partly to blame for the wild swings in the stock market recently. Zero-day options, which are contracts that expire the same day they’re traded, have surged 23% in trading volume from the start of the year to April, according to JPMorgan data. “We find that 0DTE (+1DTE) have been instrumental in driving more intraday volatility, Maxwell Grinacoff, UBS‘ head of U.S. equity derivatives research, said in a note.

‘Transitory’ inflation from tariffs
Federal Reserve Governor Christopher Waller said Monday he expects the effects of Trump’s tariffs on prices to be “transitory.” The Fed last used that term to describe the inflation spike in 2021, which, as we know, has yet to ebb to its target of 2%. “But just because it didn’t work out once does not mean you should never think that way again,” Waller said, adding that the Fed could cut rates if inflation rises again.

Nvidia to build supercomputer in U.S.
Nvidia said Monday it plans to produce up to $500 billion of artificial intelligence infrastructure in the U.S. via its manufacturing partnerships over the next four years. Its Blackwell AI chips have started production in Phoenix at Taiwan Semiconductor plants, the chipmaker wrote in a blog post. Nvidia is also building manufacturing plants in Texas to produce AI super computers — the first time Nvidia will make one entirely in the U.S.

[PRO] ‘Prepare to be fooled’ on tariffs: Morgan Stanley
Despite recent concessions on tariffs by Trump, Morgan Stanley cautioned investors not to let their guard down. “Investors should prepare to be fooled many more times,” the firm’s strategists led by Matthew Hornbach said in a note to clients titled “Fool Me Once, Shame On You. Fool Me Twice, Shame On Me.”

Trump tariffs won’t lead supply chains back to U.S. — companies will go low-tariff globe-hopping: CNBC survey

If China is going to lose some manufacturing as a result of  Trump’s tariffs, the U.S. manufacturing sector won’t be the main beneficiary, according to a new CNBC Supply Chain Survey. The Trump administration says a reshoring boom is coming, but most companies tell CNBC that the costs could as much as double to bring supply chains back and instead a new search for low-tariff regimes around the world will commence.

Nearly three-quarters of those surveyed (74%) said cost was the top reason for saying they would not be reshoring production, followed by the challenge of finding skilled labor (21%). The Trump administration has promised tax cuts for companies that bring back manufacturing, but the survey found taxes lower in the ranking of costs that impact manufacturing site decision making.