The S&P 500 Index ($SPX) (SPY) today is up +0.27%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.02%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.30%. June E-mini S&P futures (ESM25) are up +0.27%, and June E-mini Nasdaq futures (NQM25) are up +0.29%.
Stock indexes today recovered from early losses and turned higher after some megacap technology stocks rebounded, and US economic news showed strength, tempering concerns about US trade policies. Tesla is up more than +5%, and Amazon.com is up nearly +1%. Meanwhile, US Q4 GDP was revised higher, weekly US initial unemployment claims unexpectedly declined, and Feb pending home sales rose more than expected.
Stocks today initially retreated after President Trump pushed ahead with additional tariffs that threaten to derail economic growth and boost inflation. Late Wednesday, President Trump signed a proclamation to implement a 25% tariff on US auto imports, effective April 3, and said further tariffs would be imposed on the European Union and Canada if they worked together “to do economic harm” to the US. The tariffs will initially target vehicles fully assembled outside the US and, by May 3, will expand to include automobile parts made outside of the US. Mr. Trump said the tariffs were “permanent,” and he was not interested in negotiating any exceptions.
US Q4 GDP was revised slightly higher by +0.1 point to +2.4% (q/q annualized), stronger than expectations of no change at +2.3%. Q4 personal consumption was revised downward to +4.0% from the previously reported +4.2%, and the Q4 core price index was revised lower to +2.6% from the previously reported +2.7%.
US weekly initial unemployment claims unexpectedly fell -1,000 to 224,000, showing a stronger labor market than expectations of an increase to 225,000.
US Feb pending home sales rose +2.0% m/m, stronger than expectations of +1.0% m/m.
Market attention will focus on Friday’s Feb personal spending report (expected +0.5% m/m) and Feb personal income (expected +0.4% m/m). Also, the Feb core PCE price index, the Fed’s preferred inflation gauge, is expected to rise +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 settled mixed. The Euro Stoxx 50 fell to a 1-1/2 week low and is down -0.38%. China’s Shanghai Composite Index closed up +0.15%. Japan’s Nikkei Stock 225 fell to a 1-1/2 week low and closed down -0.60%.
Interest Rates
June 10-year T-notes (ZNM25) today are down -6 ticks. The 10-year T-note yield is up +2.7 bp to 4.379%. June T-notes today dropped to a 1-month low, and the 10-year T-note yield rose to a 1-month high of 4.398%. T-notes retreated today after President Trump imposed 25% tariffs on US auto imports, which threatens to boost inflation. Also, rising inflation expectations are bearish for T-notes as today’s 10-year breakeven inflation rate rose to a 1-month high of 2.397%. In addition, supply pressures are weighing on T-notes as the Treasury prepares to auction $44 billion 7-year T-notes later today to conclude this week’s $211 billion auction package of T-notes and floating-rate notes. T-notes recovered from their worst levels after the US Q4 core price index was revised lower to 2.6% from the previously reported 2.7%.
European bond yields today are mixed. The 10-year German bund yield fell to a 3-week low of 2.743% and is down -1.1 bp to 2.784%. The 10-year UK gilt yield rose to a 1-1/2 month high of 4.809% and is up +6.1 bp to 4.789%.
Eurozone Feb M4 money supply rose +4.0% y/y, stronger than expectations of +3.8% y/y and the fastest pace of increase in 2-1/4 years.
ECB Governing Council member Wunsch said the ECB should consider holding interest rates steady at its next meeting due to US trade policy complications.
Swaps are discounting the chances at 75% for a -25 bp rate cut by the ECB at the April 17 policy meeting.
US Stock Movers
US automakers and auto part manufacturers are falling today after President Trump imposed 25% tariffs on US auto imports starting next week. As a result, General Motors (GM) is down more than -6% to lead losers in the S&P 500. Also, BorgWarner (BWA) is down more than -4%, and Autoliv (ALV) is down more than -3%. In addition, Ford Motor (F) and Stellantis NV (STLA) are down more than -2%.
Tesla (TSLA) is bucking the auto trend and is up more than +6% today to lead gainers in the Nasdaq 100.
Chip makers are falling today and are weighing on the broader market. Advanced Micro Devices (AMD) is down more than -2% after Jeffries downgraded the stock to hold from buy. Also, Broadcom (AVGO) is down more than -2%, and ARM Holdings Plc (ARM), Intel (INTC), Texas Instruments (TXN), NXP Semiconductors NV (NXPI), Marvell Technology (MRVL), Applied Materials (AMAT), and Microchip Technology (MCHP) are down more than -1%.
Defensive food producers and beverage makers are climbing today due to weakness in the broader market. Kraft Heinz (KHC), JM Smucker (SJM), Archer-Daniels-Midland (ADM), Tyson Foods (TSN), Hormel Foods (HRL), General Mills (GIS), Conagra Brands (CAG), and Mondelez International (MDLZ) are up more than +1%.
Auto parts stores and used car retailers are moving higher today on speculation the new 25% tariff on US auto imports will prompt consumers to keep and maintain used cars instead of purchasing a new model. As a result, O’Reilly Automotive (ORLY), CarMax (KMX), Carvana (CVNA), and AutoZone (AZO) are up more than +3%.
Verint Systems (VRNT) is down more than -11% after reporting Q4 adjusted EPS of 99 cents, weaker than the consensus of $1.27.
Jeffries Financial Group (JEF) is down more than -8% after reporting Q1 net revenue of $1.59 billion, well below the consensus of $1.86 billion.
Phillips 66 (PSX) is down nearly -1% after Goldman Sachs downgraded the stock to neutral from buy.
Soleno Therapeutics (SLNO) is up more than +41% after the FDA approved its Vykat extended-release tablets for treating hyperphagia with Prader-Willi syndrome.
Dollar Tree (DLTR) is up more than +8% to lead gainers in the S&P 500 and added to Wednesday’s +3% advance after selling its Family Dollar chain to Brigade Capital Management and Macellum Capital Management for about $1 billion.
Cava Group (CAVA) is up more than +5% after S&P Dow Jones Indices said the stock will replace Altair Engineering in the S&P MidCap 400 before the start of trading on Monday, March 31.
Angi Inc (ANGI) is up more than +4% after S&P Dow Jones Indices said the stock will replace ODP Corp in the S&P SmallCap 600 before the start of trading on Wednesday, April 2.
Northrop Grumman (NOC) is up more than +1% after RBC Capital Markets upgraded the stock to outperform from sector perform with a price target of $575.
Earnings Reports (3/27/2025)
374Water Inc (SCWO), AAR Corp (AIR), Acumen Pharmaceuticals Inc (ABOS), ADC Therapeutics SA (ADCT), Argan Inc (AGX), Boston Omaha Corp (BOC), Braze Inc (BRZE), Evolv Technologies Holdings In (EVLV), HireQuest Inc (HQI), Inmune Bio Inc (INMB), Lululemon Athletica Inc (LULU), Orchestra BioMed Holdings Inc (OBIO), Oxford Industries Inc (OXM), Pulse Biosciences Inc (PLSE), Sky Harbour Group Corp (SKYH), TD SYNNEX Corp (SNX), VirTra Inc (VTSI), Winnebago Industries Inc (WGO), Zentalis Pharmaceuticals Inc (ZNTL).
