When President Donald Trump hoisted a spreadsheet listing all the punitive tariffs he planned to levy on the rest of the world late Wednesday, investors had one thing in mind—bolt for the exits.

Futures contracts on the S&P 500 and the Nasdaq 100 dropped sharply once markets learned that starting next week the U.S. will hit goods from China with an additional 34% duty, not to mention 20% on those from the European Union and 24% on those from Japan. Former Harvard economist Lawrence Summers calculated roughly $1.5 trillion in market value was wiped out in the course of about an hour.

Despite being able to trace the equities futures sold off to this moment, administration officials dismissed the afterhours movement and instead blamed the stock prices slump on DeepSeek, the open source AI model from China that punctured tech valuations in January.

“What I would point out is that the Nasdaq peaked on DeepSeek day,” Treasury Secretary Scott Bessent told Bloomberg TV on Wednesday. “So that is a MAG-7 problem , not a MAGA problem.”

Not true, says Saxo Bank’s global head of investment strategy, who traced bearish sentiment in everything from Amazon to Nike to a once-in-a-century hike that lifts the average effective import duty by nearly 19 percentage points.

“In what President Donald Trump labelled a ‘Liberation Day’ for the American economy, April 2nd saw the unveiling of the broadest and most aggressive tariffs imposed by the United States in over 100 years,” wrote Jacob Falkencrone on Thursday. “Markets around the globe reeled in response.”

Debt refinancing tsunami

Bessent’s reaction may not simply be an attempt to avoid uncomfortable questions about the S&P 500 index hitting six month lows. There are other reasons why the White House might want to deflect voter attention away from equity markets.

The former hedge fund manager has said he wants the new litmus test for the health of the U.S. economy to be the benchmark 10-year Treasury bond, from which the larger credit market—including car loans and home mortgages—is broadly priced.

The lower its yield , the more affordable it becomes to borrow money both for Americans and Uncle Sam. That’s key as Bessent inherits from his predecessor a crisis that Wall Street veterans including Stanley Druckenmiller blasted as tragically myopic .