Markets Rally as Government Shutdown Threat Eases

The S&P 500 Index ($SPX) (SPY) today is up +1.42%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.99%, and the Nasdaq 100 Index ($IUXX) (QQQ) has increased by +1.91%. Additionally, March E-mini S&P futures (ESH25) are up +1.12%, and March E-mini Nasdaq futures (NQH25) have risen +1.67%.

Stock indexes are trending higher today as the risk of a U.S. government shutdown diminishes. Senate Democratic Leader Chuck Schumer announced last night that he will not impede the Republican continuing resolution (CR) intended to fund the government for the next six months. The House of Representatives passed the bill on Tuesday, and the Senate is scheduled to vote this afternoon.

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Global equity markets have gained momentum from a rally in Chinese stocks, reaching a three-month high due to indications of additional policy support. Chinese officials from the finance ministry, commerce ministry, the PBOC, and other governmental bodies are set to hold a press conference on Monday to announce measures aimed at increasing consumption.

The price of Bitcoin (^BTCUSD) has surged over +3% today, propelled by progress on a stablecoin bill that is rapidly advancing toward full Senate consideration. This legislation, supported by President Trump, aims to regulate privately issued, dollar-based stablecoins, which could facilitate cheaper and quicker transactions via smartphones.

In recent days, the stock market faced pressure stemming from concerns that U.S. tariffs could dampen economic growth and corporate earnings. Last Tuesday, President Trump enforced a 25% tariff on imports from Canada and Mexico, while increasing the tariff on Chinese goods from 10% to 20%. Trump also reiterated his intention to introduce reciprocal tariffs on other nations on April 2. Trade tensions intensified when the European Union retaliated with tariffs on up to $28.3 billion worth of U.S. products, including soybeans, beef, and poultry, due to U.S. tariffs on steel and aluminum imports. Alongside this, Canada announced counter-tariffs of 25% on around $20.8 billion in U.S.-made goods, including computers and sporting equipment, as well as U.S. steel and aluminum products.

As the week progresses, market focus will remain on U.S. trade policies. Additionally, on Friday, the University of Michigan’s March consumer sentiment index is forecasted to decline by -1.2 to 63.5. The market will also monitor Congress’s efforts to pass a spending bill to prevent a government shutdown before the March 15 deadline.

The markets currently assign a 4% probability to a -25 bp rate cut at the upcoming FOMC meeting on March 18-19.

Overseas, stock markets are performing well. The Euro Stoxx 50 is up +0.67%. In China, the Shanghai Composite Index surged to a three-month high, closing up +1.81%. Meanwhile, Japan’s Nikkei Stock 225 ended the day +0.72% higher.

Interest Rates

June 10-year T-notes (ZNM25) are down -8 ticks today, with the 10-year T-note yield rising +3.6 bp to 4.304%. The decline in T-notes is attributed to a decrease in safe-haven demand amid the stock market rally, which was spurred by Schumer’s announcement regarding the Republican funding bill. T-notes are also facing pressure from the recent dip in German bunds after reports indicated agreement among German parties on a debt package.

In Europe, bond yields are climbing. The 10-year German bund yield is up +5.4 bp to 2.909%, while the 10-year UK gilt yield has increased by +2.1 bp to 4.698%.

The German Fed CPI (EU harmonized) was revised down to +0.5% month-over-month and +2.6% year-over-year, from the prior +0.6% month-over-month and +2.8% year-over-year figures.

Comments from ECB Governing Council member Holzmann suggest that Eurozone interest rates are already at neutral levels and he supports pausing ECB rate cuts next month. He also noted that the resurgence of inflation poses a significant risk, potentially prompting the ECB to raise interest rates in the future.

Today, Handelsblatt reported that the German chancellor-in-waiting, Merz, has reached an agreement with the Green party on a fiscal reform package aimed at significant investments in infrastructure and defense.

Market expectations are currently estimating a 53% chance of a -25 bp rate cut by the ECB at the policy meeting scheduled for April 17.

US Stock Movers

The Magnificent Seven stocks are propelling the market higher today. Nvidia (NVDA) leads gainers in the Dow Jones Industrials with an increase of more than +3%. Other notable performers include Meta Platforms (META) and Amazon.com (AMZN), both up more than +2%. In addition, Apple (AAPL), Tesla (TSLA), Microsoft (MSFT), and Alphabet (GOOGL) are rising more than +1%.

Chip stocks are also on the rise with Micron Technology (MU) leading the Nasdaq 100 by increasing over +7% following an upgrade from Aletheia Capital Limited, moving their rating to buy from hold, with a price target of $145. Other gainers in the sector include Lam Research (LRCX) and ARM Holdings Plc (ARM), both up more than +3%, while GlobalFoundries (GFS), Applied Materials (AMAT), KLA Corp (KLAC), Microchip Technology (MCHP), Marvell Technology (MRVL), and NXP Semiconductors NV (NXPI) have risen by over +2%.

Noteworthy performances include Semtech (SMTC), which is up more than +13% after reporting fourth-quarter adjusted EPS of 40 cents, surpassing the consensus of 32 cents. DocuSign (DOCU) is up more than +15% after projecting 2026 billings between $3.30 billion and $3.35 billion, exceeding the consensus of $3.22 billion. Ulta Beauty (ULTA) has risen over +7% after posting fourth-quarter EPS of $8.46, significantly higher than the expected $7.12. Meanwhile, Crown Castle (CCI) is up more than +5% following its decision to sell parts of its fiber business to an EQT AB fund and Zayo Group Holdings for a total of $8.5 billion. Additionally, Rubrik (RBRK) has surged more than +24% after forecasting 2026 revenue of $1.15 billion to $1.16 billion, above the consensus of $1.11 billion.

American Express (AXP) is up over +1% following an upgrade from Baird to neutral from underperform. In contrast, Abbott Laboratories (ABT) is down more than -2% after a judge reversed a prior verdict regarding infant formula allegations. T-Mobile US (TMUS) is down more than -1%, leading losses in the Nasdaq 100 after Citigroup downgraded the stock to neutral from buy based on valuation concerns. Xponential Fitness (XPOF) has fallen over -35% after issuing a weak full-year revenue forecast of $315 million to $325 million, below the consensus of $342.9 million.

Earnings Reports (3/14/2025)

Upcoming earnings reports will come from AirSculpt Technologies Inc (AIRS), American Vanguard Corp (AVD), Arbutus Biopharma Corp (ABUS), Artiva Biotherapeutics Inc (ARTV), Bit Digital Inc (BTBT), Buckle Inc/The (BKE), Century Therapeutics Inc (IPSC), Contango ORE Inc (CTGO), Despegar.com Corp (DESP), Emerald Holding Inc (EEX), Enliven Therapeutics Inc (ELVN), FutureFuel Corp (FF), Gogo Inc (GOGO), Golden Matrix Group Inc (GMGI), HF Foods Group Inc (HFFG), Larimar Therapeutics Inc (LRMR), Lightwave Logic Inc (LWLG), MRC Global Inc (MRC), Sana Biotechnology Inc (SANA), Shattuck Labs Inc (STTK), Terns Pharmaceuticals Inc (TERN), Vacasa Inc (VCSA), Value Line Inc (VALU), Verastem Inc (VSTM), WideOpenWest Inc (WOW), and XBiotech Inc (XBIT).

On the date of publication,
Rich Asplund
did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy
here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.