The S&P 500 Index ($SPX) (SPY) today is down -0.09%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.46%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.40%. June E-mini S&P futures (ESM25) are down -0.17%, and June E-mini Nasdaq futures (NQM25) are down -0.57%.
Stock indexes today are mixed, with the Dow Jones Industrials posting a 2-1/2 week high. Stocks are being pressured today by US trade uncertainty as the markets await more clarity on tariff policies and the economic outlook ahead of President Trump’s April 2 deadline to impose new reciprocal tariffs.
Stocks were also under pressure after US Feb core capital goods new orders unexpectedly declined. Also, weakness in the Magnificent Seven stocks today is weighing on the overall market.
Stocks rallied earlier this week on signs that the new tariffs may be less expansive and more targeted than originally feared, with President Trump saying he would “probably be more lenient than reciprocal.”
US MBA mortgage applications fell -2.0% in the week ended March 21, with the purchase mortgage sub-index up +0.7% and the refinancing mortgage sub-index down -5.3%. The average 30-year fixed rate mortgage fell -1 bp to 6.71% from 6.72% in the prior week.
US Feb capital goods new orders (core) nondefense ex-aircraft and parts unexpectedly fell -0.3% m/m, weaker than expectations of +0.2% m/m and the biggest decline in 7 months. The markets remain on guard about reduced US capital spending due to tariff and economic uncertainty.
Hawkish comments today from Chicago Fed President Goolsbee weighed on stocks and bonds when he said the Fed is no longer on the “golden path” witnessed in 2023 and 2024, and the next Fed rate cut may take longer than anticipated because of macroeconomic uncertainty.
Market attention will focus on Thursday’s Q4 GDP report, which is expected to be unrevised at +2.3% (q/q annualized), and March pending home sales are expected to be up +1.0% m/m. On Friday, Feb personal spending is expected to be +0.5% m/m, and Feb personal income is expected to be +0.4% m/m. Also, the Feb core PCE price index, the Fed’s preferred inflation gauge, is expected to be +0.3% m/m and +2.7% y/y. Finally, on Friday, the revised March University of Michigan US consumer sentiment index is expected to remain unchanged at 57.9.
Heightened geopolitical risks in the Middle East are negative for stocks. Israel continues its airstrikes across Gaza, ending a two-month ceasefire with Hamas, and Israeli Prime Minister Netanyahu vowed to act “with increasing military strength” to free hostages and disarm Hamas. Israel also deployed troops in Syria as part of its new defense doctrine. Also, the US continues to launch strikes on Yemen’s Houthi rebels. US Defense Secretary Hegseth recently said strikes would be “unrelenting” until the group stops attacking vessels in the Red Sea. The Houthi rebels said they would respond by attacking US vessels in the Red Sea.
Stocks have been under pressure over the past three weeks due to fears that US tariffs will weaken economic growth and corporate earnings. On March 4, President Trump imposed 25% tariffs on Canadian and Mexican goods and doubled the tariff on Chinese goods to 20% from 10%. On March 8, Mr. Trump reiterated that he would impose reciprocal tariffs and additional sector-specific tariffs on foreign nations on April 2.
The markets are discounting the chances at 16% for a -25 bp rate cut after the May 6-7 FOMC meeting.
Overseas stock markets today are mixed. The Euro Stoxx 50 is down -0.55%. China’s Shanghai Composite Index closed down -0.04%. Japan’s Nikkei Stock 225 climbed to a 3-1/2 week high and closed up +0.65%.
Interest Rates
June 10-year T-notes (ZNM25) today are down -6 ticks. The 10-year T-note yield is up +2.3 bp to 4.336%. June T-notes are under pressure today on hawkish comments from Chicago Fed President Goolsbee, who said the next Fed rate cut may take longer than anticipated because of economic uncertainty. Also, rising inflation expectations are bearish for T-notes as the 10-year breakeven inflation rate today rose to a 3-week high of 2.375%. In addition, supply pressures are weighing on T-notes as the Treasury will auction $70 billion of 5-year T-notes and $28 billion of 2-year floating-rate notes today as part of this week’s $211 billion auction package of T-notes and floating-rate notes.
European bond yields today are moving lower. The 10-year German bund yield is down -0.2 bp to 2.796%. The 10-year UK gilt yield is down -2.1 bp to 4.732%.
UK Feb CPI rose +2.8% y/y, weaker than expectations of +3.0% y/y. Feb core CPI rose +3.5% y/y, weaker than expectations of +3.6% y/y.
Swaps are discounting the chances at 72% for a -25 bp rate cut by the ECB at the April 17 policy meeting.
US Stock Movers
Weakness in the Magnificent Seven stocks today is weighing on the overall market. Amazon.com (AMZN), Meta Platforms (META), Tesla (TSLA), and Alphabet (GOOGL) are down more than -1%. Also, Microsoft (MSFT) is down -0.47%.
Nvidia (NVDA) is down more than -3% to lead losers in the Dow Jones Industrials after the Financial Times reported that China’s National Development and Reform Commission is advising Chinese groups to use chips that meet strict requirements in new data centers and expansion of existing facilities, and discouraging the use of Nvidia’s H20 chips as they do not satisfy these new rules.
Energy stocks and energy service providers are moving higher today, with the price of WTI crude climbing to a 3-week high. As a result, Valero Energy (VLO) and Schlumberger (SLB) are up more than +2%. Also, Diamondback Energy (FANG), Haliburton (HAL), Occidental Petroleum (OXY), ConocoPhillips (COP), Exxon Mobil (XOM) and Chevron (CVX) are up more than +1%.
Cintas (CTAS) is up more than +8% to lead gainers in the S&P 500 and Nasdaq 100 after raising its full-year EPS estimate to $4.36-$4.40 from a previous estimate of $4.28-$4.34, stronger than the consensus of $4.33.
Chewy (CHWY) is down more than -2% after forecasting 2026 net sales of $12.30 billion to $12.45 billion, the midpoint below the consensus of $12.43 billion.
Dollar Tree (DLTR) is up more than +3% after selling its Family Dollar chain to Brigade Capital Management and Macellum Capital Management for about $1 billion.
CarMax (KMX) is up more than +2% after Stephens upgraded the stock to overweight from equal weight with a price target of $90.
JB Hunt Transport Services (JBHT) is down nearly -1% after Susquehanna Financial downgraded the stock to neutral from positive.
Earnings Reports (3/26/2025)
Cintas Corp (CTAS), Concentrix Corp (CNXC), Dollar Tree Inc (DLTR), Jefferies Financial Group Inc (JEF), Paychex Inc (PAYX).
