The S&P 500 Index ($SPX) (SPY) is down -0.40%, while the Dow Jones Industrials Index ($DOWI) (DIA) has decreased -0.89%. In contrast, the Nasdaq 100 Index ($IUXX) (QQQ) shows a slight increase of +0.08%. Additionally, March E-mini S&P futures (ESH25) are down -0.48%, and March E-mini Nasdaq futures (NQH25) are up +0.02%.

Stock indexes reversed early gains today, with both the S&P 500 and Dow Jones Industrials reaching lows not seen in five and three-quarter months. The downturn follows President Trump’s announcement of a tariff increase on US imports of steel and aluminum from Canada, raising it to 50% from a previous 25%. This measure is in response to Ontario’s imposition of a 25% export tariff on electricity sent to the US. Additionally, Trump indicated plans to “substantially increase” tariffs on Canada come April 2 unless Canada reduces its tariffs on US dairy products and other goods.

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Early session optimism emerged following Bloomberg’s report that President Trump would meet with the Business Roundtable, featuring prominent US business executives, later today. Furthermore, a recovery in the Magnificent Seven stocks is lending some support to the broader market.

US economic data today highlighted labor market strength, with January job openings reported to have increased by +232,000 to a total of 7.74 million, exceeding expectations of no change at 7.60 million.

However, Verizon Communications is down more than -6%, leading the telecommunication sector lower and contributing negatively to the Dow Jones Industrials. Delta Air Lines has dropped over -7% after it cut its Q1 profit forecasts due to weakening travel demand.

Concerns about new US tariffs prompting a potential global trade war have pressured stocks throughout the week, as fears mount over potential impacts on economic growth and corporate earnings. Last Tuesday, Trump enacted a 25% tariff on goods from Canada and Mexico and raised tariffs on Chinese goods from 10% to 20%. However, he allowed US automakers a month-long exemption from these tariffs and suspended similar tariffs on conforming goods and services from Canada and Mexico for a month as well. Nevertheless, he reiterated plans to impose reciprocal tariffs on foreign nations on April 2.

This week’s market attention will pivot to the February US CPI report, expected to show a slight easing to +2.9% year-over-year from +3.0% in January. Core CPI is anticipated to decline to +3.2% year-over-year from +3.3%. Furthermore, US trade policy will be closely monitored with a 25% tariff on steel and aluminum imports set to take effect on Wednesday. The February final-demand PPI is expected to ease to +3.2% from +3.5% in January. On Friday, the University of Michigan’s March consumer sentiment index is projected to decrease by -1.2 to a level of 63.5. The markets will also look to see if Congress can agree on a spending bill to avoid a government shutdown before the March 15 deadline.

Currently, the markets are assigning a 4% chance for a -25 basis point rate cut at the next FOMC meeting on March 18-19.

Internationally, stock markets display mixed results. The Euro Stoxx 50 has fallen to a one-month low, down -1.36%, while China’s Shanghai Composite Index closed up +0.41%. Meanwhile, Japan’s Nikkei Stock 225 also fell, closing down -0.64% at a five and three-quarter month low.

Interest Rates

June 10-year T-notes (ZNM25) are up +2 ticks today, with the 10-year T-note yield declining -1.3 basis points to 4.200%. T-note prices have rebounded from early losses as stocks fell following Trump’s tariff announcements. Additionally, lower inflation expectations have supported T-notes, as the 10-year breakeven inflation rate fell to a three-month low of 2.265%.

Initially, T-note prices declined after the better-than-expected January JOLTS job openings, a hawkish implication for Fed policy. However, supply pressures are limiting T-note performance as the Treasury prepares to auction $58 billion in 3-year T-notes, part of a $119 billion auction week for T-notes and T-bonds.

European bond yields are climbing today. The yield on the 10-year German bund is up +3.4 basis points to 2.867%, while the 10-year UK gilt yield has increased by +0.6 basis points to 4.650%.

Interest rate swaps indicate a 51% probability of a -25 basis point rate cut by the ECB during its April 17 policy meeting.

US Stock Movers

The Magnificent Seven stocks are recovering today from the previous day’s drop. Tesla (TSLA) is up more than +3%, and Nvidia (NVDA) is up over +2%. Other stocks, including Amazon.com (AMZN), Meta Platforms (META), and Microsoft (MSFT), have also gained over +1%.

Conversely, travel stocks are facing challenges, led by Delta Air Lines (DAL) falling -8% following a downward revision of its Q1 adjusted EPS forecast. Additionally, Marriott International (MAR), Norwegian Cruise Line Holdings (NCLH), and United Airlines Holdings (UAL) have all seen drops exceeding -4%. Carnival (CCL), Royal Caribbean Cruises Ltd (RCL), Hilton Worldwide Holdings (HLT), and MGM Resorts International (MGM) are also down more than -3%.

Telecommunication stocks are under pressure, with Verizon Communications (VZ) leading the decline, down -6% as executives reported a “challenging” competitive landscape for Q1. AT&T (T) and T-Mobile US (TMUS) are also down more than -3%.

Chip stocks are sliding, contributing to the market’s overall weakness. GlobalFoundries (GFS) has dropped more than -7%, leading the Nasdaq 100 losers. ON Semiconductor (ON) is down over -4%, while NXP Semiconductors NV (NXPI), Microchip Technology (MCHP), and Texas Instruments (TXN) are down more than -3%. Additionally, Applied Materials (AMAT), Intel (INTC), KLA Corp (KLAC), and Qualcomm (QCOM) are down more than -2%.

Teradyne (TER) has seen the largest drop in the S&P 500, decreasing more than -17% after projecting Q2 revenues to be flat to down -10% quarter-over-quarter. Oracle (ORCL) is down over -5% after reporting Q3 adjusted revenue of $14.13 billion, falling short of the consensus estimate of $14.39 billion.

Kohl’s (KSS) is down more than -19% after projecting a -6% drop in comparable sales for the year, significantly weaker than the expected -0.55%. Ferguson Enterprises (FERG) has dropped over -4% after posting a Q2 US adjusted operating profit of $455 million, which fell short of the consensus of $485.1 million.

In cybersecurity, stocks are gaining today following Elon Musk’s comments regarding a significant cyberattack on X that caused periodic outages on Monday. Crowdstrike Holdings (CRWD) leads the sector, up more than +7%. Zscaler (ZS) is up more than +4%, while Palo Alto Networks (PANW) and Fortinet (FTNT) have gained more than +3% and +2%, respectively.

Southwest Airlines (LUV) is up over +6% after speeding up its $2.5 billion share repurchase program’s completion to July 2025 and ending its free checked baggage policy.

GE Healthcare (GEHC) has gained more than +2% after Goldman Sachs upgraded the stock to buy from neutral with a price target of $100. Elevance Health (ELV) is also rising, appreciating more than +2% after it forecast full-year adjusted EPS between $34.15 and $24.85, with the midpoint exceeding the consensus of $34.45. Furthermore, ASML Holding NV (ASML) has increased by more than +1% following a five-year strategic partnership agreement with Imec to develop high-end nodes utilizing ASML systems.

Earnings Reports (3/11/2025)

Upcoming earnings reports include Casey’s General Stores Inc (CASY), Ciena Corp (CIEN), Dick’s Sporting Goods Inc (DKS), Ferguson Enterprises Inc (FERG), and Kohl’s Corp (KSS).

On the date of publication, Rich Asplund did not hold any positions, directly or indirectly, in any of the securities mentioned in this article. All information and data provided herein are for informational purposes only. For more information, please view the Barchart Disclosure Policy here.

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