U.S. Stock Indices Fall Amid Rising Trade Tensions
The S&P 500 Index ($SPX) (SPY) is down -0.33%, with the Dow Jones Industrials Index ($DOWI) (DIA) down -0.24%, and the Nasdaq 100 Index ($IUXX) (QQQ) lower by -0.68%. March E-mini S&P futures (ESH25) have decreased by -0.42%, while March E-mini Nasdaq futures (NQH25) are down -0.62%.
Stock indexes are moderately lower today as escalating trade tensions create a risk-off atmosphere in asset markets. President Trump has threatened to impose a 200% tariff on European wine, champagne, and other alcoholic beverages unless the EU repeals its tax on U.S. whiskey. However, stock index futures recouped some losses following a surprising decline in weekly U.S. jobless claims and a minor increase in U.S. February producer prices.
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Weekly initial unemployment claims unexpectedly fell by 2,000 to 220,000, suggesting a stronger labor market than anticipated, as economists had estimated a rise to 225,000.
In February, the Producer Price Index (PPI) for final demand was flat month-on-month and up 3.2% year-on-year, falling short of expectations for a 0.3% monthly increase and 3.3% yearly rise. Furthermore, the PPI excluding food and energy dropped by 0.1% month-on-month, with a yearly increase of 3.4%, which also was below predictions for increases of 0.3% and 3.5%, respectively.
Concerns about U.S. tariffs weakening economic growth and corporate earnings have kept stocks under pressure over the past week. Last Tuesday, President Trump introduced 25% tariffs on goods from Canada and Mexico and raised tariffs on Chinese goods from 10% to 20%. He reiterated plans to impose reciprocal tariffs on foreign nations beginning April 2. Trade tensions worsened Wednesday when the European Union announced tariffs on up to $28.3 billion of U.S. goods, including soybeans, beef, and poultry, in retaliation for U.S. tariffs on steel and aluminum imports. Canada also declared 25% counter-tariffs on approximately $20.8 billion of U.S.-made products, including computers and sporting goods.
For the rest of this week, market watchers will closely monitor U.S. trade policies. Additionally, the University of Michigan’s March consumer sentiment index is anticipated to decline by 1.2 points to 63.5. Investors will also look to see if Congress can pass a spending bill to prevent a government shutdown ahead of the March 15 deadline.
Currently, the markets foresee only a 1% chance of a -25 basis point rate cut at the next Federal Open Market Committee (FOMC) meeting on March 18-19.
Internationally, stock markets are also lower today. The Euro Stoxx 50 falls by -0.29%. China’s Shanghai Composite Index closed down -0.39%, while Japan’s Nikkei 225 was down -0.08%.
Interest Rates
June 10-year T-notes (ZNM25) have decreased by -5 ticks, with the 10-year T-note yield rising by +2.3 basis points to 4.335%. Today, T-notes dropped to a one-week low and are experiencing moderate losses, while the 10-year T-note yield has reached a two-week high of 4.345%. T-note prices are pressured by the pullback in European government bonds. Additionally, upcoming supply from the Treasury’s $22 billion 30-year T-bond auction scheduled for later today is adding to the pressure. Today’s U.S. economic report showed mixed results for T-notes, with jobless claims unexpectedly dropping, but February PPI failing to meet expectations.
In Europe, bond yields increased today. The 10-year German bund yield rose by +0.9 basis points to 2.886%, and the 10-year UK gilt yield jumped +2.3 basis points to 4.745%.
The Eurozone’s January industrial production grew by +0.8% month-on-month, outpacing expectations of +0.6% and marking the most significant increase in five months.
ECB Governing Council member and Bundesbank President Nagel stated, “We will achieve price stability this year,” and projected that Eurozone inflation would return to the ECB’s 2% target by the end of 2025. Swaps are projecting a 47% probability of a -25 basis point rate cut by the ECB during the April 17 policy meeting.
US Stock Movers
The decline in the “Magnificent Seven” stocks is impacting overall market performance. Tesla (TSLA) is down over -4%, while Meta Platforms (META) dropped more than -3%. Alphabet (GOOGL) and Amazon.com (AMZN) have declined by more than -2%, and Apple (AAPL), along with Nvidia (NVDA), fell over -1%. Microsoft (MSFT) has dropped by -0.77%.
Adobe (ADBE) experienced a significant drop of more than -10%, taking the lead among losers in the S&P 500 and Nasdaq 100, following a forecast for Q2 adjusted EPS of $4.95-$5.00, which was below the consensus estimate of $5.00.
Conversely, Intel (INTC) surged over +15% following the announcement of Lip-Bu Tan as its next CEO, effective March 18. This shift in leadership boosted Intel’s stock performance.
The increase in chip stocks has provided some support for the broader market. Notable stocks such as Microchip Technology (MCHP), Marvell Technology (MRVL), Applied Materials (AMAT), Micron Technology (MU), ON Semiconductor Corp (ON), GlobalFoundries (GFS), and NXP Semiconductors NV (NXPI) are all up by more than +1%.
UiPath (PATH) is down more than -17% after projecting 2026 annualized recurring revenue to be $1.82 billion, which is below the consensus estimate of $1.88 billion. In addition, SentinelOne (S) fell by more than -4% after its revenue forecast for 2026 came in weaker than anticipated at $1.01 billion, compared to the consensus of $1.03 billion.
Paccar (PCAR) saw a decline of more than -3% following the new head of the EPA’s announcement regarding potential rollbacks of truck emissions regulations, which could impact anticipated earnings linked to new truck purchases. Trade Desk (TTD) declined by over -3% after Cleveland Research downgraded its stock rating from buy to neutral.
Moelis & Co (MC) fell by more than -1% after Morgan Stanley downgraded its stock to underweight from overweight, stating a price target of $70.
Dollar General (DG) rose by over +3% as it forecasted full-year comparable sales growth of 2.2%, exceeding the consensus of 1.8%. IonQ Inc (IONQ) increased by more than +1% due to signs of insider buying; director Scannell purchased $2.03 million of shares on Wednesday. Alkami Technology (ALKT) also rose more than +1% after Stephens upgraded the stock to overweight from equal weight, with a price target of $40. Additionally, FMC Corp (FMC) gained over +1% after Goldman Sachs resumed coverage on the stock with a buy rating and a price target of $51.
Earnings Reports (3/13/2025)
DocuSign Inc (DOCU), Dollar General Corp (DG), Ulta Beauty Inc (ULTA), 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 here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
