Stock Index Futures Soar on Tariff Optimism, U.S. PCE Inflation Data Awaited

June S&P 500 E-Mini futures (ESM25) are up +0.97%, and June Nasdaq 100 E-Mini futures (NQM25) are up +1.14% this morning, with investors hopeful that the next wave of U.S. President Donald Trump’s tariffs will be less severe than previously signaled.

Sentiment got a boost after Bloomberg reported that the next round of U.S. tariffs, due on April 2nd, is expected to be more targeted than the sweeping measures previously anticipated. Trump will unveil broad reciprocal tariffs on countries or blocs but is expected to exempt certain ones, and for now, the administration does not plan to introduce additional sector-specific tariffs at the same event - contrary to what Trump had previously hinted, the report said.

Investor focus this week is on the release of the Federal Reserve’s favorite inflation gauge and other key economic data.

In Friday’s trading session, Wall Street’s major equity averages ended in the green. Super Micro Computer (SMCI) climbed over +7% and was the top percentage gainer on the S&P 500 after JPMorgan upgraded the stock to Neutral from Underweight with a price target of $45. Also, the Magnificent Seven stocks gained ground, with Tesla (TSLA) rising more than +5% to lead gainers in the Nasdaq 100 and Apple (AAPL) advancing nearly +2%. In addition, Boeing (BA) rose over +3% and was the top percentage gainer on the Dow after the beleaguered plane maker secured a contract to design and build the U.S.’s next-generation stealth fighter jet. On the bearish side, Micron Technology (MU) slumped more than -8% and was the top percentage loser on the S&P 500 and Nasdaq 100 after the largest U.S. maker of computer memory chips offered a weak FQ3 adjusted gross margin forecast. Also, FedEx (FDX) slid over -6% after the shipping giant cut its full-year guidance. 

Chicago Fed President Austan Goolsbee stated on Friday that hard data continues to indicate a strong economy and reiterated his expectation for rates to come down over the next 12 to 18 months, provided that inflation continues to ease. Also, New York Fed President John Williams said, “The current modestly restrictive stance of the Fed’s monetary policy is entirely appropriate given the solid labor market and inflation still running somewhat above our 2% goal.”

Meanwhile, U.S. rate futures have priced in an 85.1% chance of no rate change and a 14.9% chance of a 25 basis point rate cut at the conclusion of the Fed’s May meeting.

This week, market participants will closely monitor a slew of U.S. economic data for clues on how the economy is holding up amid President Trump’s recent unpredictable tariff announcements and increased volatility in the U.S. stock market. The February reading of the U.S. core personal consumption expenditures price index, the Fed’s preferred inflation gauge, will be the main highlight, as it could offer insights into the interest-rate outlook. Other noteworthy data releases include U.S. GDP (third estimate), the Conference Board’s Consumer Confidence Index, the S&P/CS HPI Composite - 20 n.s.a., New Home Sales, the Richmond Fed Manufacturing Index, Durable Goods Orders, Core Durable Goods Orders, Crude Oil Inventories, Goods Trade Balance, Initial Jobless Claims, Wholesale Inventories (preliminary), Pending Home Sales, Personal Income, Personal Spending, and the University of Michigan’s Consumer Sentiment Index.

“The macro data seems biased to be weak in the coming weeks, but the PCE inflation data will likely show some stubbornness, remaining a tad elevated,” ING analysts said in a note.

Investors will also hear perspectives from several central bankers this week, including Atlanta Fed President Raphael Bostic, Fed Vice Chair for Supervision Michael Barr, Fed Governor Adriana Kugler, New York Fed President John Williams, Minneapolis Fed President Neel Kashkari, and Richmond Fed President Tom Barkin. 

In addition, notable companies like discount retailer Dollar Tree (DLTR), homebuilder KB Home (KBH), fitness apparel maker Lululemon Athletica (LULU), online pet retailer Chewy (CHWY), and video game retailer and meme stock favorite GameStop (GME) are scheduled to release their quarterly results this week.

Today, all eyes are focused on the U.S. S&P Global Manufacturing PMI preliminary reading, which is set to be released in a couple of hours. Economists, on average, forecast that the March Manufacturing PMI will come in at 51.9, compared to last month’s value of 52.7.

Investors will also focus on the U.S. S&P Global Services PMI, which stood at 51.0 in February. Economists expect the preliminary March figure to be 51.2.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.281%, up +0.68%.

The Euro Stoxx 50 Index is up +0.22% this morning, starting the new week on an upbeat note as investors hope U.S. President Donald Trump will take a less aggressive stance on his reciprocal tariffs. Reports emerged that President Trump’s upcoming wave of tariffs is expected to be more targeted than the broad measures he had previously threatened. Mining stocks led the gains on Monday on higher copper prices. Also, JPMorgan double-upgraded the European mining sector to Overweight from Underweight. Meanwhile, investors digested fresh PMI data from the region. A survey released on Monday showed that Eurozone business activity expanded at its fastest pace in seven months in March, driven by a moderation in the prolonged manufacturing slump despite softer growth in services. Investors are also keeping an eye on talks between a U.S. delegation and Russian officials in Saudi Arabia about the possibility of a ceasefire in Ukraine, following conversations the U.S. delegation had with Ukrainian officials on Sunday. In corporate news, Bayer AG (BAYN.D.DX) slumped over -7% after a U.S. jury ordered the company to pay approximately $2.1 billion to a plaintiff who alleged that its Roundup weed killer caused his cancer.

Eurozone’s Composite PMI (preliminary), Eurozone’s Manufacturing PMI (preliminary), and Eurozone’s Services PMI (preliminary) data were released today.

Eurozone March Composite PMI has been reported at 50.4, weaker than expectations of 50.8.

Eurozone March Manufacturing PMI arrived at 48.7, stronger than expectations of 48.3.

Eurozone March Services PMI came in at 50.4, weaker than expectations of 51.2.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.15%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.18%.

China’s Shanghai Composite Index reversed earlier losses and closed slightly higher today, snapping a 3-day losing streak. Metal stocks outperformed on Monday following media reports that China intends to add key metals to its state reserves. Also helping sentiment was a Bloomberg report that Jack Ma-backed Ant Group has utilized Chinese-made semiconductors to develop techniques for training AI models that could reduce costs by 20%. Ant used domestic chips, including those from affiliate Alibaba Group Holding and Huawei Technologies, to train models using the Mixture of Experts machine learning technique, according to the report. In addition, Morgan Stanley boosted China’s 2025 GDP growth forecast by 50 basis points to 4.5%, attributing this to the impact of stimulus measures on local governments and consumption. Still, gains were limited by investor caution ahead of U.S. President Donald Trump’s next round of tariffs. Trump’s top trade chief, Jamieson Greer, is set to speak with his Chinese counterpart this week, ahead of the long-threatened April 2nd announcement of new U.S. tariffs targeting countries that tax U.S. imports. Meanwhile, Chinese Premier Li Qiang reiterated the need for greater market openness to combat escalating global instability at the China Development Forum in Beijing on Sunday. In other news, the Ministry of Commerce announced it will hold a press conference on Thursday to provide the latest updates on its work. Investors hope the briefing will outline further plans from the government to support the economy. In corporate news, Xiaomi climbed over +4% in Hong Kong after the smartphone and EV maker raised its car deliveries guidance.

Japan’s Nikkei 225 Stock Index closed slightly lower today as the approaching deadline for new U.S. tariffs kept investors on edge. Chip and bank stocks led the declines on Monday. Investors remained cautious about the looming threat even after reports indicated that the next round of U.S. President Donald Trump’s tariffs might be more measured than initially expected. “Many important details regarding the latest tariffs are still unknown, keeping investors on edge,” said Kazuo Kamitani, a strategist at Nomura Securities. Preliminary business surveys released on Monday showed that Japan’s factory activity fell at the sharpest rate in a year in March, weighed down by declines in production and new orders, while the service sector contracted for the first time since last October, signaling troubling signs for the economy. Meanwhile, Bank of Japan Governor Kazuo Ueda told parliament on Monday that the central bank “will adjust the degree of monetary easing if the 2% inflation target is likely to be achieved.” He also noted that the central bank would not dismiss the possibility of selling its government bond holdings. Market watchers will look for clues on the timing of the BOJ’s next interest rate hike in the summary of opinions from last week’s central bank meeting, which is set to be released on Friday. In corporate news, Sumitomo Realty & Development jumped over +10% after Bloomberg reported that Elliott Investment Management had built a sizeable stake in the real estate developer. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +1.49% to 21.86.

The Japanese March au Jibun Bank Manufacturing PMI (preliminary) stood at 48.3, weaker than expectations of 49.2.

Pre-Market U.S. Stock Movers

Azek (AZEK) soared over +18% in pre-market trading after James Hardie Industries agreed to acquire the manufacturer of outdoor living products in a cash and stock deal valued at $8.75 billion. 

MicroStrategy (MSTR) climbed more than +5% in pre-market trading after lowering the price of its upcoming preferred stock offering.

Dutch Bros (BROS) gained over +3% in pre-market trading after Morgan Stanley initiated coverage of the stock with an Overweight rating and $82 price target.

Pinterest (PINS) rose more than +3% in pre-market trading after Guggenheim upgraded the stock to Buy from Neutral with a price target of $40.

Super Micro Computer (SMCI) fell over -2% in pre-market trading after Goldman Sachs downgraded the stock to Sell from Neutral with a price target of $32.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Monday - March 24th

KB Home (KBH), Oklo (OKLO), Enerpac Tool Group (EPAC), Intuitive Machines (LUNR), Caledonia Mining (CMCL), SKYX Platforms (SKYX), Intellinetics (INLX), Nexgel (NXGL), Wag! (PET).