Editor's note: This week has been volatile for stocks. The markets have swung wildly after President Donald Trump's tariff pause from Wednesday. And according to our colleague Corey McLaughlin, we haven't seen the last of the uncertainty.

In today's Weekend Edition, we're sharing the Thursday issue of the Stansberry Digest (without updates to numbers or dates). In it, Corey takes a deeper look at what happened on the day after the tariff reprieve... and reveals what this might mean for the economy.

The day after...

Yesterday afternoon, President Donald Trump announced a 90-day "pause" on seriously high tariff rates for most countries. The markets went wild in the final hours of trading. And we told you to keep expecting volatility.

Exhibit A: today...

This was one of the worst single days for the market since February. The major U.S. indexes were down between 5% and 6% intraday... every major S&P 500 sector was lower... and gold (up nearly 3% to around $3,175) was about the only thing that rose in value.

The CBOE Volatility Index, or VIX, rose back to above 50 intraday – extremely high and above where it was before Trump announced the pause yesterday afternoon.

Things got a little better by closing time... But only one major sector – consumer staples – finished up, barely by 0.3%. And the VIX remained near 40, up 20% for the day.

Over the longer term, the odds favor good returns for stocks in the next year or two...

But in the shorter term, I hesitate to make a surefire prediction other than to expect choppy markets until further notice.

It's possible that earlier this week will go down as a significant low for U.S. stocks, but that's if things get "less bad" on expectations for the economy from here.

That's simply a bet – and not a particularly compelling one – given continued significant uncertainties.

Remember... big moves higher tend to follow big moves lower, and vice versa.

Trump Is Watching the Bond Market

The "good" news: Trump doesn't want a financial crisis on his watch...

And his pivot yesterday wasn't so much about stocks, though they did matter.

But it sounds like the trigger was the bond market. This concern likely stems from the influence of Treasury Secretary and hedge-fund veteran Scott Bessent. Bessent has been telling Trump to watch the 10-year yield as an indicator of how his plans are being interpreted.

And wouldn't you know, Trump acknowledged yesterday that even just a few days of apparent bond-market instability – with the 10-year yield touching 4.5% amid a sharp multiday rally – was enough to push him toward a "pause." (He also said he'd been considering one for some time.)

The Wall Street Journal reported last night, citing anonymous sources, that Trump told advisers that he didn't want to go down as a president who presided over a financial crisis...

Trump played his cards close to his vest. He told advisers that he was willing to take "pain," a person who spoke to him on Monday said. He privately acknowledged that his trade policy could trigger a recession but said he wanted to be sure it didn't cause a depression, according to people familiar with the conversations.

So, if you piece all this together, a stock market plunge wasn't enough to make Trump "pause" tariffs. But it's clear that he doesn't want to be known for crashing the economy, either.

Importantly, though, other countries can now bank on this in negotiations. That's probably good short-term news for the stock market, but it also means Trump may reset trade deficits by less than he seems to want.

Inflation Is Going Down... But Stocks Don't Care

The latest about inflation...

While tariffs are sending stock prices spiraling, this morning, investors got what appeared to be some welcome news.

The U.S. Bureau of Labor Statistics' consumer price index ("CPI") data for March showed that inflation fell 0.1% compared with February. On a year-over-year basis, CPI rose 2.4%.

Both metrics were better than Wall Street's expectations. And the year-over-year reading matched September 2024 as the lowest level since February 2021.

Core inflation, which strips out energy and food costs, rose 2.8% in March from the same month a year ago and 0.1% from February. Like headline inflation, core inflation is now sitting at its lowest level since 2021.

But even though inflation hit a four-year low, stocks didn't spike higher. In fact, stock futures sold off to their lows between the premarket release of the report and market open...

Some may chalk this up as profit-taking after the huge move higher yesterday.

But there's more to the reaction than that...

First, if this is the start of a trend of inflation not just slowing, but falling... that could be a sign of deflation in the economy.

If that happens, it'll ignite some fears about the U.S. economy slowing. We saw sustained deflation (on a month-over-month basis) in each of the last two recessions.

Also, March was the last month before tariffs on Canada, Mexico, and China went into full, month-long effect. So these March CPI numbers don't accurately reflect the challenges businesses are facing right now.

And we're getting more clues on how they're going to deal with tariffs.

What Tariffs Mean for the Economy

A warning from Amazon (AMZN)...

In an interview with CNBC this morning, Amazon CEO Andy Jassy said that he expects third-party sellers on the company's platform to raise prices to pass on the increased cost from tariffs.

As he told CNBC's Andrew Ross Sorkin...

I'm guessing that sellers will pass that cost on. I think they'll try. I understand why, I mean, depending on which country you're in, you don't have 50% extra margin that you can play with.

Still, Amazon has not seen any sign that folks are cutting back on spending or that prices are increasing just yet. Still, we're only a few days into tariffs. But other companies are getting ahead of tariffs to hold onto their margins.

One company that for sure will pass on tariff costs to customers...

Memory chipmaker Micron Technology (MU) has warned customers that a tariff surcharge is coming to some of its components. Essentially, Micron is trying to maintain its margins by hiking prices as costs increase.

Micron gets many of its components from Asia – including China (145% tariff rate), Taiwan (32%), Japan (24%), Malaysia (24%), and Singapore (10%).

And while Trump got headlines for pausing many tariffs, he kept the Chinese import tax in place... along with a 10% baseline for all other countries.

Also, we don't know if the higher rates on Taiwan, Japan, and Malaysia will go into effect three months from now and raise Micron's costs.

Micron's memory chips are used in things like data centers, mobile phones, computers, and even cars. So rising costs due to tariffs would hit multiple industries.

We're sure Micron isn't the only company that will do this. Meanwhile, folks aren't waiting around to see who hikes prices next.

Panic buying has returned...

Research firm Cox Automotive estimates that prices for some foreign-built cars will go up $6,000, and even cars assembled here in the U.S. will jump by $3,600. With an average new car price of $48,000 in the U.S., those price hikes represent anywhere from an 8% jump (for those assembled domestically) to 13% (for those imported to the U.S.).

Those price hikes are pulling sales forward. Cox saw a 30% jump in buyer traffic on its Kelley Blue Book and Autotrader sites in the days before auto tariffs went into effect.

It's not just cars...

Even though Apple (AAPL) has shifted some manufacturing to India and Vietnam, the iPhone is still mainly manufactured in China – which is now facing another tariff increase. A report from Bloomberg suggested that, based on one calculation, the planned tariffs could force a 42% jump in iPhone prices to more than $1,100.

Bloomberg's report said that folks are also "panic buying" iPhones. And tariffs are on their mind – with one Apple store employee saying "almost every customer" was asking if prices were headed higher.

This recalls the early days of the pandemic, when people were "panic buying" household items like toilet paper... and inflation eventually took off.

It sure seems like companies are going to raise prices in response to tariffs, even if they are not as "bad" as previously thought for now.

While March's inflation data seems like a win for markets, one month of positive data isn't going to be enough to move the needle. And investors are already looking ahead to what those price hikes and broader tariffs will mean for inflation in the coming months.

Expect volatile times to continue.

Good investing,

Corey McLaughlin

Editor's note: More pain could be on the way. But according to Wall Street veteran Eric Wade, one strategy could actually grow your money over the next 12 months. It's not stocks, bonds, or gold – but it has made some investors 2,000% during market downturns. This is your chance to fight back if you've lost money to this year's trade war – click here to learn how to position yourself today.