Markets Struggle Amid Trade Tensions and Mixed Earnings Reports

The S&P 500 Index ($SPX) (SPY) is currently down -0.59%. Likewise, the Dow Jones Industrials Index ($DOWI) (DIA) fell -0.90%, and the Nasdaq 100 Index ($IUXX) (QQQ) decreased by -0.29%. March E-mini S&P futures (ESH25) are down -0.09%, while March E-mini Nasdaq futures (NQH25) are up +0.37%.

Stocks are experiencing pressure today, with the Dow Jones Industrial hitting a 5-3/4 month low. Following Monday’s market plunge, stocks are attempting a rebound. Overnight, short covering was observed in stock index futures after Bloomberg reported President Trump’s upcoming meeting with the Business Roundtable and leading U.S. business executives.

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Concerns regarding President Trump’s trade policies and proposed government spending cuts triggered a significant drop in stocks on Monday. Today, shares from the Magnificent Seven are on the rise, although Verizon Communications is notably down -7%, dampening the overall momentum for telecommunication stocks and the Dow Jones Industrials.

The past week has been challenging for stocks, primarily due to fears that U.S. tariffs could ignite a global trade war, negatively impacting economic growth and corporate earnings. Last Tuesday, President Trump announced 25% tariffs on Canadian and Mexican goods, raising tariffs on Chinese goods from 10% to 20%. Notably, he granted U.S. automakers a one-month tariff exemption and temporarily exempted compliant Canadian and Mexican goods under the United States-Mexico-Canada Agreement (USMCA). Nonetheless, Mr. Trump reiterated the planned implementation of reciprocal tariffs on foreign nations starting April 2.

Bitcoin (^BTCUSD) has bounced back from a four-month low, currently showing an increase of over +2%. The cryptocurrency faced pressures last Thursday after President Trump announced intentions to establish a strategic crypto reserve, initially sourcing cryptocurrencies forfeited to the government rather than engaging in new crypto purchases.

Market participants will focus on the February U.S. Consumer Price Index (CPI) report set for release on Wednesday. Analysts expect a slight easing to +2.9% year-over-year, down from +3.0% in January. The February Core CPI is also projected to decrease to +3.2% year-over-year from +3.3%. Additionally, U.S. trade policies, including the implementation of 25% tariffs on steel and aluminum imports, will be in the spotlight. The February final-demand Producer Price Index (PPI) will be released Thursday, likely easing to +3.2% year-over-year from +3.5% in January. On Friday, the University of Michigan’s March consumer sentiment index is expected to see a decline of -1.2, landing at 63.5. Lastly, the markets will observe whether Congress will approve a spending bill to prevent a government shutdown ahead of the March 15 deadline.

Current market estimates suggest a 4% chance of a -25 basis point rate cut at the upcoming Federal Open Market Committee (FOMC) meeting scheduled for March 18-19.

Overseas markets are offering mixed results. The Euro Stoxx 50 index has reached a one-month low, declining -0.17%, while China’s Shanghai Composite Index rose by +0.41%. In Japan, the Nikkei 225 has fallen to a 5-3/4 month low, closing down by -0.64%.

Interest Rates

June 10-year T-notes (ZNM25) are down -4 ticks today. The yield on the 10-year T-note is up +1.5 basis points to 4.228%. Slightly lower prices for T-notes reflect a recovery in stocks, reducing the demand for safe havens. Additionally, supply pressures loom as the Treasury plans to auction $58 billion of 3-year T-notes today, part of a $119 billion auction package this week.

European bond yields are on the rise today, with the 10-year German bund yield increasing by +4.5 basis points to 2.878% and the 10-year UK gilt yield up by +2.9 basis points to 4.673%.

Swaps reflect a 51% probability of a -25 basis point rate cut by the European Central Bank (ECB) during its April 17 policy meeting.

U.S. Stock Movers

The Magnificent Seven stocks are rebounding today, catching some relief from Monday’s downturn. Tesla (TSLA) is up more than +4%, while Nvidia (NVDA) has gained over +2%, leading the Dow Jones gainers. Companies like Amazon.com (AMZN) and Meta Platforms (META) have each risen by over +1%, while Microsoft (MSFT) and Alphabet (GOOGL) see minimal increases of +0.1%.

In a notable surge, Southwest Airlines (LUV) increased by more than +8% after fast-tracking its $2.5 billion share buyback program to July 2025 and announcing an end to its free checked-bag policy.

GE Healthcare (GEHC) has risen by over +3% following a buy rating upgrade from Goldman Sachs, with a price target set at $100.

Furthermore, Elevance Health (ELV) is up by more than +1% after forecasting full-year adjusted earnings per share (EPS) in the range of $34.15-$34.85, exceeding the consensus estimate of $34.45.

ASML Holding NV (ASML) has also posted modest gains of over +1%, thanks to a five-year strategic partnership agreement with Imec aimed at advancing high-end nodes utilizing ASML systems.

On the flip side, Teradyne (TER) plummeted more than -16%, leading the S&P 500 losers after projecting Q2 revenue metrics flat to down -10% quarter-over-quarter.

Telecommunication stocks are struggling, with Verizon Communications (VZ) down -7% amid competitive challenges noted by company executives regarding Q1. AT&T (T) and T-Mobile US (TMUS) have also seen declines of over -3%.

Oracle (ORCL) fell more than -4% after reporting Q3 adjusted revenue of $14.13 billion, falling short of the $14.39 billion consensus. Kohl’s (KSS) shares plunged more than -17% as the company forecasts a comparable sales drop of -6%, significantly more than the consensus expectation of -0.55%. Ferguson Enterprises (FERG) is down over -4% after reporting Q2 adjusted operating profits of $455 million, below the forecast of $485.1 million.

Finally, Delta Air Lines (DAL) saw a decline of over -3% after revising its Q1 adjusted EPS forecast down to between 30 cents and 50 cents, significantly lower than the consensus estimate of 83 cents.

Earnings Reports (3/11/2025)

Upcoming earnings are anticipated from 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 (either directly or indirectly) positions in any securities mentioned in this article. All information and data presented are for informational purposes only. For further details, please refer to the Barchart Disclosure Policy here.

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