The S&P 500 Index ($SPX) (SPY) today is up +0,47%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.32%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.71%. March E-mini S&P futures (ESH25) are up +0.24%, and March E-mini Nasdaq futures (NQH25) are up +0.40%.
Stock indexes today are moderately higher on strength in chip stocks, led by a +6% jump in Broadcom after it reported better-than-expected Q1 earnings results and gave an outlook that was seen as strong. Energy stocks are also climbing today, with WTI crude oil increasing by more than +2%.
Stock indexes also found support today after bond yields fell on the Fed-friendly US Feb payroll report that showed nonfarm payrolls and average hourly earnings rose less than expected, and the unemployment rate unexpectedly ticked higher.
US Feb nonfarm payrolls rose +151,000, weaker than expectations of +160,000, and Jan nonfarm payrolls were revised lower to +125,000 from the previously reported +143,000. The Feb unemployment rate unexpectedly rose +0.1 to 4.1%, showing a weaker labor market than expectations of no change at 4.0%.
US Feb average hourly earnings rose to 4.0% y/y from a revised 3.9% y/y in Jan, weaker than expectations of 4.1% y/y.
Comments Thursday evening from Atlanta Fed President Bostic were negative for stocks when he suggested he favors the Fed holding interest rates steady until at least late spring when he said the direction of the economy is "very much up in the air," and it could be several months before there's clarity on how President Trump's policies and other factors will affect the economy.
Fears that US tariffs will start a global trade war that weakens economic growth and corporate earnings are a bearish factor for stocks. President Trump imposed 25% tariffs on Canadian and Mexican goods on Tuesday and doubled the tariff on Chinese goods to 20% from 10%. However, Mr. Trump granted US automakers a one-month tariff exemption and exempted tariffs for one month on Canada and Mexico for all goods and services compliant with the United States-Mexico-Canada Agreement (USMCA) but reiterated that he would impose reciprocal tariffs on foreign nations on April 2.
Chinese trade data was weaker than expected, a negative factor for global growth prospects. China Feb exports year-to-date roe +2.3% y/y, weaker than expectations of +5.9% y/y. China Feb imports year-to-date unexpectedly fell -8.4% y/y, weaker than expectations of +1.0% y/y and the biggest decline in nearly two years.
Market attention will now focus on Fed Chair Powell's keynote speech on the economic outlook later today at Chicago Booth's 2025 US Monetary Policy Forum.
The markets are discounting the chances at 7% for a -25 bp rate cut at the next FOMC meeting on March 18-19.
Overseas stock markets today are lower. The Euro Stoxx 50 is down -1.47%. China's Shanghai Composite Index fell from a 2-1/4 month high and closed down -0.25%. Japan's Nikkei Stock 225 fell to a 5-1/2 month low and closed down sharply by -2.17%.
Interest Rates
June 10-year T-notes (ZNM25) today are up +13 ticks. The 10-year T-note yield is down -5.0 bp to 4.229%. June T-notes today are moving higher on a Fed-Friendly US Feb payroll report that showed nonfarm payrolls and Feb average hourly earnings rose less than expected. Also, a positive carryover from strength in European government bonds today supports T-note prices. In addition, a decline in inflation expectations supports T-notes after the 10-year breakeven inflation rate fell to a 2-1/4 month low today at 2.313%.
European bond yields today are moving lower. The 10-year German bund yield is down -4.1 bp to 2.7937%. The 10-year UK gilt yield is down -3.5 bp to 4.625%.
Eurozone Q4 GDP was revised upward to +0.2% q/q and +1.2% y/y from the previously reported +0.1% q/q and +0.9% y/y.
German Jan factory orders fell -7.0% m/m, weaker than expectations of -2.5% m/m and the biggest decline in a year.
ECB Governing Council member Muller said, "The ECB needs to be increasingly cautious about further interest rate cuts as several factors, such as tariffs or the impact of defense spending, could accelerate price increases in the near future."
Swaps are discounting the chances at 65% for a -25 bp rate cut by the ECB at the April 17 policy meeting.
US Stock Movers
Chip stocks are climbing today, led by a +6% rally in Broadcom (AVGO) after it reported Q1 adjusted net revenue of $14.92 billion, stronger than the consensus of $14.61 billion, and forecast Q2 revenue of $14.90 billion, above the consensus of $14.59 billion. Also, Micron Technology (MU) and GlobalFoundries (GFS) are up more than +2%. In addition, Nvidia (NVDA), ARM Holdings Plc (ARM), and ASML Holding NV (ASML) are up more than +1%.
Energy stocks are moving higher today, with the price of WTI crude oil going up by more than +2%. As a result, APA Corp (APA), Occidental Petroleum (OXY), Halliburton (HAL), Schlumberger (SLB), ConocoPhillips (COP), Devon Energy (DVN), Diamondback Energy (FANG) and Marathon Petroleum (MPC) are up more than +2%. Also, Chevron (CVX) is up more than +2% to lead gainers in the Dow Jones Industrials.
The Gap (GAP) is up more than +14% after reporting Q4 comparable sales rose +3.00%, stronger than the consensus of +1.88%.
Walgreens Boots Alliance (WBA) is up more than +7% to lead gainers in the S&P 500 after it agreed to be purchased by Sycamore Partners for $10 billion.
Sandisk Corp (SNDK) is up more than +4% after Cantor Fitzgerald initiated coverage of the sock with a recommendation of overweight and a price target of $60.
Zscaler (ZS) is up more than +2% after Bank of America Global Research upgraded the stock to buy from neutral with a price target of $240.
HP Enterprise (HPE) is down more than -15% to lead losers in the S&P 500 after reporting Q1 adjusted gross margin of 29.4%, below the consensus of 31.2% and forecast full-year adjusted EPS of $1.70 to $1.90, weaker than the consensus of $2.12.
Cooper Cos (COO) is down more than -5% after reporting Q1 net sales of $964.7 million, below the consensus of $982.1 million.
Costco Wholesale (COST) is down more than -4% to lead losers in the Nasdaq 100 after reporting Q2 EPS of $4.02, weaker than the consensus of $4.11.
Samsara (IOT) is down more than -7% after forecasting 2026 total revenue of $1.52 billion-$1.53 billion, below the consensus of $1.53 billion.
Air Lease (AL) is down more than -1% after Bank of America Global Research double-downgraded the stock to underperform from buy.
Intuitive Machines (LUNR) is down more than -21%, adding to Thursday's -20% plunge after it said it believes its second lander may be in the wrong orientation on the moon.
Earnings Reports (3/7/2025)
Advantage Solutions Inc (ADV), Aemetis Inc (AMTX), Aldeyra Therapeutics Inc (ALDX), Cartesian Therapeutics Inc (RNAC), GCT Semiconductor Holding Inc (GCTS), Gencor Industries Inc (GENC), Genesco Inc (GCO), IGM Biosciences Inc (IGMS), Immersion Corp (IMMR), Mammoth Energy Services Inc (TUSK), National Beverage Corp (FIZZ), Ovid Therapeutics Inc (OVID), Preformed Line Products Co (PLPC), Savara Inc (SVRA), Silvercrest Asset Management G (SAMG), Valhi Inc (VHI), Werewolf Therapeutics Inc (HOWL), XOMA Royalty Corp (XOMA).
