Stocks Recover Some of This Week’s Losses as US Shutdown Seems Averted

The S&P 500 Index ($SPX) (SPY) today is up +1.27%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.87%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +1.54%.  March E-mini S&P futures (ESH25) are up +1.33%, and March E-mini Nasdaq futures (NQH25) are up +1.59%. 

Stock indexes today are trading higher as the threat of a US government shutdown eased after Senate Democratic leader Schumer said Thursday night that he will not block the Republican continuing resolution (CR) to fund the government for 6 months.  The House passed the bill on Tuesday, and the Senate will vote on it this afternoon.

Global equity markets garnered support today from a rally in Chinese stocks to a 3-month high on signs of more policy support.  Officials from the finance ministry, commerce ministry, the PBOC, and other government bodies plan to hold a press conference on Monday to announce measures to boost consumption.

Stocks fell back from their best levels after today’s report from the University of Michigan showed that US consumer sentiment in March fell to a more than two-year low, and long-term inflation expectations soared to a 32-year high. 

The University of Michigan US Mar consumer sentiment index fell -6.8 to a 2-1/3 year low of 57.9, weaker than expectations of 63.0.

The University of Michigan’s US Mar 1-year inflation expectations indicator unexpectedly rose to a 2-1/3 year high of +4.9%, higher than expectations of no change at 4.3%.  The Mar 5-10 year inflation expectations indicator unexpectedly rose to a 32-year high of 3.9% versus expectations of a decline to 3.4%.   

The price of Bitcoin (^BTCUSD) is up more than +3% today after a stablecoin bill is on a fast track for consideration by the full Senate after the banking committee voted 18-6 to advance the bill late Thursday.  The bill, endorsed by President Trump, would govern privately issued, dollar-based stablecoins that could enable cheaper and faster transactions for anyone with a smartphone.

Stocks have been under pressure over the past week due to fears that US tariffs will weaken economic growth and corporate earnings.  Last Tuesday, President Trump imposed 25% tariffs on Canadian and Mexican goods and doubled the tariff on Chinese goods to 20% from 10%.  Mr. Trump also reiterated that he would impose reciprocal tariffs on foreign nations on April 2, as planned.  Trade tensions escalated on Wednesday when the European Union imposed tariffs on up to $28.3 billion of US goods, including soybeans, beef, and poultry, in retaliation for US tariffs on steel and aluminum imports.  Also, Canada announced 25% counter-tariffs on about $20.8 billion of US-made items, such as computers and sporting goods, along with US steel and aluminum products.

The markets are discounting the chances at 1% for a -25 bp rate cut at the next FOMC meeting on March 18-19.

Overseas stock markets today are higher.  The Euro Stoxx 50 is up +1.11%.  China’s Shanghai Composite Index rallied to a 3-month high and closed up +1.81%.  Japan’s Nikkei Stock 225 closed up +0.72%.

Interest Rates

June 10-year T-notes (ZNM25) today are down -7 ticks.  The 10-year T-note yield is up +3.4 bp to 4.303%.  June T-notes today are mildly lower on reduced safe-haven demand as stocks rally after Senate Democratic leader Schumer said he would not block the Republican bill to keep funding the government, potentially averting a government shutdown.  T-notes are also under pressure on carryover weakness from a slide in German bunds following a report that German parties have agreed on a debt package.  T-notes remained lower after today’s report from the University of Michigan showed US inflation expectations unexpectedly rose.  

European bond yields today are moving higher.  The 10-year German bund yield is up +4.9 bp to 2.905%.  The 10-year UK gilt yield is up +1.7 bp to 4.694%.

The German Fed CPI (EU harmonized) was revised downward to +0.5% m/m and +2.6% y/y from the previously reported +0.6% m/m and +2.8% y/y.

ECB Governing Council member Holzmann said interest rates in the Eurozone are already at neutral levels, and he supports pausing ECB rate cuts next month.  He added that a resurgence in inflation is the greater risk, and higher European spending could force the ECB to hike interest rates.

Handelsblatt reported today that German chancellor-in-waiting Merz reached an agreement with the Green party on a fiscal reform package for large investments in infrastructure and defense.

Swaps are discounting the chances at 53% for a -25 bp rate cut by the ECB at the April 17 policy meeting.

US Stock Movers

Magnificent Seven stocks are climbing today to boost the overall market.  Nvidia (NVDA) is up more than +3% to lead gainers in the Dow Jones Industrials.  Also, Meta Platforms (META) and Amazon.com (AMZN) are up more than +1%.  In addition, Microsoft (MSFT) is up +0.90%, Apple (AAPL) is up +0.49%, Tesla (TSLA) is up +0.47%, and Alphabet (GOOGL) is up +0.44%. 

Chip stocks are moving higher today.  Micron Technology (MU) is up more than +5% after Aletheia Capital Limited upgraded the stock to buy from hold with a price target of $145.  Also, ARM Holdings Plc (ARM) is up more than +4%, and Lam Research (LRCX) is up more than +3%.  In addition, GlobalFoundries (GFS), Applied Materials (AMAT), Advanced Micro Devices (AMD), and KLA Corp (KLAC) are up more than +2%. 

DocuSign (DOCU) is up more than +15% after forecasting 2026 billings of $3.30 billion-$3.35 billion, well above the consensus of $3.22 billion. 

Semtech (SMTC) is up more than +13% after reporting Q4 adjusted EPS of 40 cents, better than the consensus of 32 cents. 

Ulta Beauty (ULTA) is up more than +9% to lead gainers in the S&P 500 after reporting Q4 EPS of $8.46, well above the consensus of $7.12.

Crown Castle (CCI) is up more than +8% after agreeing to sell separate parts of its fiber business to an EQT AB fund and Zayo Group Holdings for a combined $8.5 billion. 

Rubrik (RBRK) is up more than +25% after forecasting 2026 revenue of $1.15 billion-$1.16 billion, above the consensus of $1.11 billion. 

American Express (AXP) is up more than +1% after Baird upgraded the stock to neutral from underperform.

Abbot Laboratories (ABT) is down more than -2% to lead losers in the S&P 500 after a judge overturned an infant formula verdict from last year that rejected claims that formulas made by the company caused necrotizing enterocolitis in an infant. 

T-Mobile US (TMUS) is down more than -1% to lead losers in the Nasdaq 100 after Citigroup downgraded the stock to neutral from buy on valuation. 

Xponential Fitness (XPOF) is down more than -35% after forecasting full-year revenue of $315 million-$325 million, weaker than the consensus of $342.9 million. 

Earnings Reports (3/14/2025)

AirSculpt Technologies Inc (AIRS), American Vanguard Corp (AVD), Arbutus Biopharma Corp (ABUS), Artiva Biotherapeutics Inc (ARTV), Bit Digital Inc (BTBT), Buckle Inc/The (BKE), Century Therapeutics Inc (IPSC), Contango ORE Inc (CTGO), Contango ORE Inc (CTGO), Despegar.com Corp (DESP), Emerald Holding Inc (EEX), Enliven Therapeutics Inc (ELVN), FutureFuel Corp (FF), Gogo Inc (GOGO), Golden Matrix Group Inc (GMGI), HF Foods Group Inc (HFFG), Larimar Therapeutics Inc (LRMR), Lightwave Logic Inc (LWLG), MRC Global Inc (MRC), Sana Biotechnology Inc (SANA), Shattuck Labs Inc (STTK), Terns Pharmaceuticals Inc (TERN), Vacasa Inc (VCSA), Value Line Inc (VALU), Verastem Inc (VSTM), WideOpenWest Inc (WOW), XBiotech Inc (XBIT).