Dow Jones futures rose solidly early Wednesday, along with S&P 500 futures and Nasdaq futures. The CPI inflation report is due before the open.
The stock market reversed sharply lower Tuesday morning as President Donald Trump hiked tariffs on Canadian steel and aluminum and threatened much more. The major indexes rebounded somewhat on later Trump tariff headlines, though they faded to close lower.
Tesla, Nvidia and Palantir Technologies bounced, but within the context of huge recent declines. Travel stocks were big losers as several airlines cut first-quarter guidance, citing weaker demand. Meanwhile, some defensive stocks such as Verizon Communications, McDonald's and Vertex Pharmaceuticals fell back below buy areas.
The video embedded in the article highlights Tuesday's market action and analyzes Verizon stock, Agnico Eagle Mines and Tradeweb Markets.
Dow Jones Futures Today
Dow Jones futures were 0.6% above fair value. S&P 500 futures advanced 0.8% and Nasdaq 100 futures jumped 1%.
The 10-year Treasury yield erased overnight losses to edge up to 4.31%.
Crude oil futures rose 1%.
The February CPI inflation report is due at 8:30 a.m. ET. Continued disinflation could give the Federal Reserve more room to cut interest rates this spring.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Trump Tariffs Vs. Canada
President Trump threatened an all-out trade war with Canada. Trump said he would hike tariffs on Canadian steel and aluminum to 50% from 25% as of Wednesday. He also threatened much more.
That was in reaction to Ontario Premier Doug Ford, who imposed a 25% tax on electricity exported to about 1.5 million U.S. customers, in response to Trump's initial Canada tariffs that went into effect last week.
Ford suspended the U.S. electricity surcharge, saying Commerce Secretary Howard Lutnick agreed to renewed trade talks on Thursday and "let cooler heads prevail." White House trade advisor Peter Navarro said after Tuesday's market close that Trump will not go ahead with the 50-day Canadian steel and aluminum tariffs.
Meanwhile, a 25% Trump tariff on steel and aluminum imports worldwide went into effect Wednesday. That may aid U.S. steel and aluminum producers, but hit steel and aluminum users, which cover a lot more jobs.
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Stock Market
The stock market started off with a modest bounce, then sold off and later rebounded on a slew of Trump tariff headlines before closing lower.
The Dow Jones Industrial Average fell 1.1% in Tuesday's stock market trading, now clearly below the 200-day line and hitting a six-month low intraday. The S&P 500 index sank 0.75%. The Nasdaq composite declined 0.2% after rising more than 1% at session highs. The small-cap Russell 2000 climbed 0.2%.
The Invesco S&P 500 Equal Weight ETF fell 1.3%, hitting a six-month low.
The Dow Jones and RSP leading the downside show how the market sell-off has clearly spread beyond the highly valued growth stocks such as Tesla, Nvidia and Palantir to "real economy" names.
Verizon stock plunged 6.6% and McDonald's fell 3.3%, with both Dow Jones giants back below buy points, MarketSurge charts show. On Tuesday, Verizon issued a first-quarter warning.
U.S. crude oil prices edged up 0.3% to $66.25 a barrel, still near six-month lows.
The 10-year Treasury yield rose seven basis points to 4.29%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF popped 2.6%. The iShares Expanded Tech-Software Sector ETF climbed 1%, with PLTR stock a notable holding. The VanEck Vectors Semiconductor ETF edged down 0.1%. Nvidia stock is the top SMH component.
The ARK Innovation ETF advanced 0.7% and ARK Genomics rebounded 2.1%. Tesla stock is the No. 1 holding across ARK Invest's ETFs, with Palantir also a major position. Cathie Wood's ARK added Tesla and Palantir stock holdings amid Monday's sell-off.
The SPDR S&P Metals & Mining ETF jumped 3.2%, with steel and aluminum stocks rallying on Trump tariff news. The Energy Select SPDR ETF retreated 0.8%, and the Health Care Select Sector SPDR Fund slumped 1.1%.
The Industrial Select Sector SPDR Fund gave up 1.5%, while the Financial Select SPDR ETF declined 0.85%.
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Tesla, Nvidia, Palantir
Tesla stock climbed 3.8% Tuesday after crashing 15.4% on Monday. President Trump hailed Elon Musk's DOGE work and said he would buy his own Tesla.
Nvidia stock gained 1.7% Tuesday, reversing from a six-month low. That followed Monday's 5.1% skid.
Palantir stock rose 2.2% after plunging just over 10% on Monday, clearly losing sight of its 50-day line. Palantir on Tuesday teased some sort of announcement coming Thursday.
All three stocks, which have suffered huge losses so far in March, rose modestly to solidly early Wednesday, even with Tesla stock getting two new price target cuts.
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What To Do Now
The stock market continues to whipsaw on Trump tariff news and other headlines. The general trend is still sharply lower.
Do not get excited if the market rebounds off lows or has a good day or two. Look for sustained strength. Even then, you'll want to be cautious and look for stocks in position.
Most growth names have broken down like Tesla and Nvidia stock or are in the process of doing so, like Palantir. Some defensive and defensive growth plays are holding up. But as Verizon and McDonald's showed, even "safe" names can crumble in a bad market. And if conditions improve, defensive plays could lag.
In general, being in cash, which can yield 4% right now, is probably the safest bet.
The stock market could start to turn around even if the headlines still seem negative. So you want to stay ready and be patient.
Keep working on watchlists, focusing on stocks with relative strength.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
