US Markets Decline Amid Trade Tensions and Economic Data

The S&P 500 Index ($SPX) (SPY) is down -0.47%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.374%, and the Nasdaq 100 Index ($IUXX) (QQQ) has seen a decline of -0.87%. Furthermore, March E-mini S&P futures (ESH25) are down -0.45%, while March E-mini Nasdaq futures (NQH25) have dropped by -0.81%.

Today, US stock indexes are moderately lower as rising trade tensions induce a risk-off sentiment among investors. President Trump threatened a 200% tariff on European wine, champagne, and other alcoholic beverages if the European Union does not repeal a tax on American whiskey. Additionally, the decline of notable stocks, often referred to as the Magnificent Seven, has negatively influenced overall market sentiment.

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Positive Economic Indicators Amid Market Pressures

Today’s US economic reports provided a mixed view. The labor market showed strength, highlighted by a decrease in weekly jobless claims, while price pressures eased. The weekly initial unemployment claims unexpectedly decreased by 2,000 to 220,000, defying expectations of a rise to 225,000.

The February Producer Price Index (PPI) remained unchanged month-over-month and increased by 3.2% year-over-year, falling short of forecasts for a 0.3% rise month-over-month and 3.3% year-over-year. Additionally, the February PPI excluding food and energy reported a decline of 0.1% month-over-month and a yearly increase of 3.4%, which also underperformed expectations.

Escalating Trade Tensions Impacting Markets

Over the past week, stock markets have faced pressure due to concerns that US tariffs might hinder economic growth and corporate earnings. President Trump recently implemented a 25% tariff on goods from Canada and Mexico, while doubling existing tariffs on Chinese products from 10% to 20%. On April 2, he plans to impose reciprocal tariffs on foreign nations.

Trade tensions intensified when the European Union retaliated by imposing tariffs on up to $28.3 billion worth of US goods, including soybeans, beef, and poultry. Canada has responded as well, launching 25% counter-tariffs on approximately $20.8 billion in US-made products.

Focus Shifts to Trade Policy and Consumer Sentiment

As the week progresses, market attention will center on US trade policies. On Friday, the University of Michigan’s March consumer sentiment index is projected to drop by 1.2 points to 63.5. Additionally, there is anticipation surrounding Congress’s approval of a spending bill to prevent a government shutdown before the March 15 deadline.

Market participants are currently assessing a 1% chance of a 25 basis point rate cut at the next Federal Open Market Committee (FOMC) meeting scheduled for March 18-19.

Global Markets and Interest Rate Movements

International markets are also experiencing declines. The Euro Stoxx 50 has fallen by -0.47%, China’s Shanghai Composite Index closed down -0.39%, and Japan’s Nikkei Stock 225 dipped by -0.08%.

In the US bond market, June 10-year T-notes (ZNM25) are down -4 ticks, with the 10-year T-note yield rising by 1.7 basis points to 4.330%. Today’s T-notes reached a one-week low, pressured by potential increases in tariffs that could escalate price pressures. Supply concerns are also at play as the Treasury prepares to auction $22 billion of 30-year T-bonds to finalize this week’s auction package of $119 billion.

Meanwhile, European bond yields are experiencing a downward trend. The 10-year German bund yield is down -1.5 basis points to 2.862%, and the 10-year UK gilt yield has decreased by -0.4 basis points to 4.718%.

Eurozone Performance and ECB Outlook

In the eurozone, January industrial production increased by 0.8% month-over-month, surpassing expectations of a 0.6% rise and marking the largest gain in five months. ECB Governing Council member and Bundesbank President Nagel indicated that price stability will be achieved this year and that Eurozone inflation will return to the ECB’s 2% target by the end of 2025.

Market expectations reflect a 50% likelihood of a 25 basis point rate cut by the ECB in the upcoming policy meeting on April 17.

Market Movers in the US

The overall market sentiment is influenced negatively by weaknesses among the Magnificent Seven stocks, with Tesla (TSLA) down over 4% and Meta Platforms (META) falling more than 2%. Other notable declines include Alphabet (GOOGL), Amazon.com (AMZN), and Apple (AAPL), all down more than 1%, along with Microsoft (MSFT), which is down 0.57%.

Adobe (ADBE) has experienced a significant drop of over 11%, leading losses in the S&P 500 and Nasdaq 100 after projecting Q2 adjusted EPS of $4.95-$5.00, which is below the consensus estimate of $5.00.

On a positive note, Intel (INTC) has gained over 15%, becoming a key gainer in the S&P 500 and Nasdaq 100 after announcing Lip-Bu Tan as its next CEO, effective March 18. The performance of chip stocks is providing some support to the broader market, with Microchip Technology (MCHP), Qualcomm (QCOM), KLA Corp (KLAC), Applied Materials (AMAT), Micron Technology (MU), and GlobalFoundries (GFS) all increasing by more than 1%.

UiPath (PATH) has declined over 14% following a forecast of 2026 annualized recurring revenue at $1.82 billion, lower than the consensus of $1.88 billion. Meanwhile, Trade Desk (TTD) is down over 5% after Cleveland Research downgraded the stock from buy to neutral.

Paccar (PCAR) dropped more than 2% after the newly appointed head of the EPA hinted at potential rollbacks to truck emissions regulations starting in 2027, possibly affecting anticipated earnings driven by new truck purchases.

Moelis & Co (MC) is down more than 2% after Morgan Stanley downgraded the stock to underweight with a price target of $70. SentinelOne (S) has also declined by more than 1%, forecasting 2026 revenue at $1.01 billion, below the consensus of $1.03 billion. In contrast, Dollar General (DG) is up by more than 4% after projecting full-year comparable sales growth of 2.2%, exceeding the consensus of 1.8%.

Mining stocks are faring well today; gold prices have reached a two-week high, contributing to increases for Newmont (NEM), which is up over 4%, Freeport McMoRan (FCX) up more than 3%, and Southern Copper (SCCO) which has risen by over 2%. Additionally, Alkami Technology (ALKT) is up more than 3% following an upgrade to overweight from equal weight with a price target of $40 by Stephens.

FMC Corp (FMC) is up more than 1% after Goldman Sachs resumed coverage on the stock with a buy recommendation and a price target of $51.

Earnings Reports This Week

Upcoming earnings reports include DocuSign Inc (DOCU), Dollar General Corp (DG), Ulta Beauty Inc (ULTA), and Williams-Sonoma Inc (WSM).

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