The S&P 500 Index ($SPX) (SPY) today is down -1.50%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.65%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -2.19%. March E-mini S&P futures (ESH25) are down -1.50%, and March E-mini Nasdaq futures (NQH25) are down -2.18%.
Stock indexes today are falling, with the Nasdaq 100 posting a 5-1/4 month low on concern that tariffs and cuts to the federal workforce will dampen consumer confidence and curb economic growth. Comments from President Trump on a Sunday news show added to pressure on stocks today when he said the US economy faces “a period of transition” from his tariff policies. Losses in the Magnificent Seven stocks today are also weighing on the overall market,
Fears that US tariffs will start a global trade war that weakens economic growth and corporate earnings are a bearish factor for stocks. Last Tuesday, President Trump imposed 25% tariffs on Canadian and Mexican goods 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.
Signs of weak demand in China’s economy are weighing on prices and are a negative factor for global growth prospects after China’s Feb CPI fell -0.7% y/y, weaker than expectations of -0.4% y/y, and the largest decline in 13 months. Also, Jan PPI fell -2.2% y/y, weaker than expectations of -2.1% y/y.
The price of Bitcoin (^BTCUSD) is down more than -4% at a 1-week low on disappointment in President Trump’s order to create a strategic Bitcoin reserve and a separate stockpile of other digital assets to be stocked with crypto forfeited to the government in legal proceedings.
Market attention this week will focus on Wednesday’s Feb US CPI report, which is expected to ease slightly to +2.9% y/y from +3.0% y/y in Jan. The Feb core CPI is expected to ease to +3.2% y/y from +3.3% y/y in Jan. Also, US trade policies will be in focus, with 25% tariffs on US imports of steel and aluminum scheduled to take effect on Wednesday. On Thursday, the Feb final-demand PPI is expected to ease to +3.2% y/y from +3.5% y/y in Jan. On Friday, the University of Michigan March consumer sentiment index is expected to fall -1.2 to 63.5. Finally, the markets will also see if Congress can approve a spending bill to avert a government shutdown ahead of a March 15 deadline.
The markets are discounting the chances at 4% for a -25 bp rate cut at the next FOMC meeting on March 18-19.
Overseas stock markets today are mixed. The Euro Stoxx 50 is down -1.14%. China’s Shanghai Composite Index closed down -0.19%. Japan’s Nikkei Stock 225 recovered from a 5-1/2 month low and closed up by +0.38%.
Interest Rates
June 10-year T-notes (ZNM25) today are up +18 ticks. The 10-year T-note yield is down -7.1 bp to 4.231%. June T-notes today are moderately higher as weakness in equity prices has boosted safe-haven demand for Treasury securities. T-notes also have carryover support from today’s strength in European government bonds. Further upside may be limited in T-notes due to supply pressures as the Treasury will auction $119 billion of T-notes and T-bonds this week, beginning with Tuesday’s $58 billion auction of 3-year T-notes.
European bond yields today are moving lower. The 10-year German bund yield is down -4.1 bp to 2.795%. The 10-year UK gilt yield is down -2.5 bp to 4.612%.
The Eurozone Mar Sentix investor confidence index rose +9.8 points to a 9-month high of -2.9, stronger than expectations of -9.3.
German Jan industrial production rose +2.0% m/m, stronger than expectations of +1.5% m/m and the biggest increase in 5 months.
German trade news was mixed as German Jan exports unexpectedly fell -2.5% m/m versus expectations of a +0.5% m/m increase, the largest decline in 8 months. Conversely, Jan imports rose +1.2% m/m, stronger than expectations of +0.5% m/m.
ECB Governing Council member Kazimir warned that the ECB must remain vigilant as “inflation risks remain tilted to the upside.”
Swaps are discounting the chances at 49% for a -25 bp rate cut by the ECB at the April 17 policy meeting.
US Stock Movers
The weakness of the Magnificent Seven stocks is weighing on the broader market. Tesla (TSLA) is down more than -5%, and Alphabet (GOOGL) is down more than -4%. Also, Nvidia (NVDA) and Apple (AAPL) are down more than -2%, and Amazon.com (AMZN), Microsoft (MSFT), and Meta Platforms (META) are down more than -1%.
Due to economic concerns, travel stocks and cruise line operators are trading lower today. United Airlines Holdings (UAL) is down more than -7% to lead losers in the S&P 500, and Carnival (CCL) is down more than -6%. Also, Delta Air Lines (DAL) and Norwegian Cruise Line Holdings (NCLH) are down more than -5%, and Royal Caribbean Cruises Ltd (RCL) is down more than -4%.
Cryptocurrency-exposed stocks are falling today, with the price of Bitcoin down more than -4% at a 1-week low. As a result, Coinbase Global (COIN), MicroStrategy (MSTR), MARA Holdings (MARA), and Riot Platforms (RIOT) are down more than -4%.
Rocket Cos. (RKT) is down more than -10% after agreeing to buy Redfin in an all-stock deal valued at $1.75 billion.
Emerson Electric (EMR) is down more than -3% after Barclays downgraded the stock to underweight from equal weight with a price target of $110.
Sherwin-Willimas Co (SHW) is down more than -1% after Jeffries downgraded the stock to hold from buy.
Host Hotels & Resorts (HST) is down more than -1% after Compass Point Research & Trading LLC downgraded the stock to neutral from buy.
Defensive food and beverage stocks are climbing today with the weakness in the broader market. Molson Coors Beverage (TAP), Conagra Brands (CAG), and the Campbell Company (CPB) are up more than +2%. Also, PepsiCo (PEP), Hormel Foods (HRL), Kraft Heinz (KHC), Mondelez International (MDLZ), and Keurig Dr Pepper (KDP) are up more than +1%.
Paycom Software (PAYC) is up more than +4% to lead gainers in the S&P 500 after KeyBanc Capital Markets upgraded the stock to overweight from sector weight with a price target of $245.
Cognizant Technology Solutions (CTSH) is up more than +1% after the Wall Street Journal reported that Mantle Ridge has accumulated a more than $1 billion stake in the company.
CME Group (CME) is up more than +1% after Raymond James upgraded the stock to outperform from market perform with a price target of $287.
Willimas-Sonoma (WSM) is up more than +1% after S&P Dow Jones Indices said the stock will replace Teleflex in the S&P 500 before trading on March 24.
Earnings Reports (3/10/2025)
Oracle Corp (ORCL), Seaport Entertainment Group Inc (SEG), Standardaero Inc (SARO), Vail Resorts Inc (MTN).
