Market Update: Tariffs Impact Trading as Earnings Reports Show Mixed Results
The S&P 500 Index ($SPX) (SPY) has dipped by -0.22%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.21%, and the Nasdaq 100 Index ($IUXX) (QQQ) has declined by -0.26%. Additionally, March E-mini S&P futures (ESH25) are down by -0.26%, while March E-mini Nasdaq futures (NQH25) are down by -0.29%.
Trade Tariffs Cause Market Nervousness
Today’s trading is facing downward pressure following President Trump’s announcement of a 25% tariff on US steel and aluminum imports, which includes finished metal products. This tariff will take effect on March 12. In response, European Commission President Von der Leyen warned that “unjustified tariffs on the EU will not go unanswered” and could lead to significant countermeasures.
Concerns of Inflation Weigh on Stocks
Rising tariffs are raising concerns among investors, leading to higher bond yields. The 10-year Treasury note yield has increased by +3.9 basis points today. Cleveland Fed President Hammack stated it is fitting for the Federal Reserve to maintain steady interest rates for “some time” as they analyze the economic impacts of new government policies and await clearer trends in inflation data.
Mixed Corporate Earnings Results
This earnings season has produced a varied landscape. Fidelity National Information Services has seen a sharp decline, down over -17% after its Q4 adjusted earnings per share (EPS) fell below expectations. Similarly, Marriott International’s stock dropped by more than -4% as its forecast for 2025 adjusted EPS was lower than anticipated. Conversely, Ecolab’s shares rose by over +6% after reporting better-than-expected Q4 net sales. Coca-Cola also saw growth, increasing by over +3% after surpassing Q4 operating revenue projections.
Upcoming Economic Data to Watch
This week, traders will closely monitor several economic indicators. Fed Chair Powell will present semiannual monetary policy testimony to the Senate Banking Committee, while the US January Consumer Price Index (CPI) is expected to remain unchanged at 2.9% year-over-year. Additionally, February manufacturing production forecasts a rise of +0.1% month-over-month.
Market Sentiment and Future Rate Cuts
Traders are currently pricing in only a 7% chance of a -25 basis point rate cut during the upcoming Federal Open Market Committee meeting on March 18-19.
International Markets Overview
Global stock markets are showing mixed results today. The Euro Stoxx 50 reached a 24-year high with an increase of +0.38%, while China’s Shanghai Composite Index closed down by -0.12%. Japan’s Nikkei Stock 225 was not trading due to a national holiday.
Interest Rates Update
March 10-year T-notes (ZNH25) are down -8 ticks today, pushing the yield to 4.535%, up by +3.9 basis points. The recent tariff news has caused investors to be apprehensive about rising inflation impacting the Fed’s ability to cut rates. Furthermore, a notable uptick in inflation expectations has placed additional downward pressure on T-notes. The upcoming auction of $58 billion in 3-year T-notes adds to prevailing supply pressures.
Global Bond Yields Rise
European bond yields are also climbing today. The 10-year German bund yield has risen by +6.0 basis points to 2.422%, while the 10-year UK gilt yield is up by +3.6 basis points to 4.493%. Notably, France’s Q4 ILO mainland unemployment rate unexpectedly dropped to 7.1%, a more robust figure than the anticipated increase to 7.3%.
US Stock Movers
Among the day’s key stock movements, Fidelity National Information Services (FIS) is down more than -17%, leading the S&P 500 after its Q4 adjusted EPS of $1.43 missed the expected $1.50. Leidos Holdings (LDOS) is down over -5% after predicting lower 2025 adjusted EPS than the consensus, while Marriott International (MAR) has fallen more than -4%. On the upside, Ecolab (ECL) is up over +6% after reporting strong Q4 net sales, and Coca-Cola (KO) is also seeing gains following its better-than-expected Q4 revenue report.
Upcoming Earnings Reports
Today’s scheduled earnings reports include: American International Group Inc (AIG), Assurant Inc (AIZ), Carrier Global Corp (CARR), Coca-Cola Co/The (KO), DuPont de Nemours Inc (DD), Ecolab Inc (ECL), Edwards Lifesciences Corp (EW), Eversource Energy (ES), Fidelity National Information (FIS), Gilead Sciences Inc (GILD), Humana Inc (HUM), Leidos Holdings Inc (LDOS), Marriott International Inc/MD (MAR), Masco Corp (MAS), S&P Global Inc (SPGI), and Welltower Inc (WELL).
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.
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