Global Equity Markets Slide on US Tariff Concerns

The S&P 500 Index ($SPX) (SPY) today is down -1.54%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -1.00%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -2.30%.  June E-mini S&P futures (ESM25) are down -1.29%, and June E-mini Nasdaq futures (NQM25) are down -2.10%. 

Stock indexes today are extending last week’s selloff, with the S&P 500 and Nasdaq 100 falling to 6-1/2 month lows and the Dow Jones Industrials dropping to a 2-week low.  Stock markets worldwide are sliding today as concerns intensify about the impact of US tariffs on the global economy.  The US is set to launch reciprocal tariffs on Wednesday, and President Trump said on Sunday that he plans to impose tariffs on “all countries,” curbing speculation that he could limit the initial scope of the tariffs.  The tariff worries have fueled risk-off sentiment in asset markets and sparked safe-haven buying of government debt and gold, which climbed to a new record high today. 

Stocks have some underlying support as the 10-year T-note yield today fell to a 1-week low.  Better-than-expected economic news from China also supported stocks after the China March manufacturing PMI rose +0.3 to 50.5, better than expectations of 50.4 and the strongest report in a year.  In addition, The China March non-manufacturing PMI rose +0.4 to 50.8, stronger than expectations of 50.6.

Stocks have been under pressure over the past four weeks due to fears that US tariffs will weaken economic growth and corporate earnings. On March 4, President Trump imposed 25% tariffs on Canadian and Mexican goods and doubled the tariff on Chinese goods to 20% from 10%.  On March 8, Mr. Trump reiterated that he would impose reciprocal tariffs and additional sector-specific tariffs on foreign nations on April 2.  Last Wednesday, President Trump signed a proclamation to implement a 25% tariff on US auto imports, effective April 3.  The tariffs will initially target vehicles fully assembled outside the US and, by May 3, will expand to include automobile parts made outside the US.  Mr. Trump said the tariffs were “permanent,” and he was not interested in negotiating any exceptions.

Market attention this week will include Tuesday’s US March ISM manufacturing index (expected -0.8 to 49.5).  On Wednesday, the March ADP employment change is expected to climb by +120,000.  On Thursday, the Mar ISM services index is expected to fall -0.5 to 53.0, and on Friday, March nonfarm payrolls are expected to increase by +138,000, and the March unemployment rate is expected unchanged at 4.1%.  Also, March average hourly earnings are expected +0.3% m/m and +4.0% y/y, unchanged from February.  Finally, on Friday, Fed Chair Powell is expected to speak to the Society for Advancing Business Editing and Writing Conference on the economic outlook.

The markets are discounting the chances at 21% for a -25 bp rate cut after the May 6-7 FOMC meeting.

Overseas stock markets today are lower.  The Euro Stoxx 50 fell to a 1-3/4 month low and is down -1.61%.  China’s Shanghai Composite Index slid to a 3-1/2 week low and closed down -0.46%.  Japan’s Nikkei Stock 225 dropped to a 6-1/2 month low and closed down sharply by -4.05%.

Interest Rates

June 10-year T-notes (ZNM25) today are up +10 ticks.  The 10-year T-note yield is down -4.4 bp to 4.205%.  June T-notes today climbed to a 2-1/2 week high, and the 10-year T-note yield fell to a 1-week low of 4.182%.  T-notes are rallying today on ideas that US tariffs might drive the economy into recession, prompting the Fed to continue cutting interest rates. Also, today’s slide in global equity markets has sparked safe-haven buying of T-notes. 

European bond yields today are moving lower.  The 10-year German bund yield fell to a 3-1/2 week low of 2.659% and is down -2.4 bp to 2.703%.  The 10-year UK gilt yield fell to a 1-week low of 4.641% and is down -3.4 bp to 4.661%.

German Mar CPI (EU harmonized) eased to +2.3% y/y from 2.6% y/y in Feb, weaker than expectations of +2.4% y/y and the slowest pace of increase in 6 months.

German Feb retail sales rose +0.8% m/m, stronger than expectations of unchanged m/m and the biggest increase in 5 months.

Swaps are discounting the chances at 86% for a -25 bp rate cut by the ECB at the April 17 policy meeting.

US Stock Movers

The Magnificent Seven stocks are falling today, a bearish factor for the overall market.  Tesla (TSLA) is down more than -5%, and Nvidia (NVDA) is down more than -4% to lead losers in the Dow Jones Industrials.  Also, Amazon.com (AMZN) is down more than -3%, and  Microsoft (MSFT) and Meta Platforms (META) are down more than -2%.  Alphabet (GOOGL) is down more than -1%, and Apple (AAPL) is down -0.36%.

Chip makers are retreating today and are weighing on the broader market.  ARM Holdings Plc (ARM) is down more than -5%.  Also,  Advanced Micro Devices (AMD), Micron Technology (MU), Broadcom (AVGO), Intel (INTC), and Marvell Technology (MRVL) are down more than -3%.  In addition, NXP Semiconductors NV (NXPI), GlobalFoundries (GFS), Lam Research (LRCX), Applied Materials (AMAT), and Qualcomm (QCOM) are down more than -2%.

Cryptocurrency-exposed stocks are under pressure today, with the price of Bitcoin down more than -2% to a 1-1/2 week low.  As a result, Coinbase Global (COIN), MicroStrategy (MSTR), MARA Holdings (MARA), and Riot Platforms (RIOT) are down more than -2%.

Airline stocks are slumping today after the CEO of Virgin Atlantic Airways warned of weakening US demand for travel to the UK as ticket sales on flights originating from the US have begun to flag in recent weeks.  As a result, United Airlines Holdings (UAL) is down more than -7%, and Delta Air Lines (DAL) is down more than -6%.  Also, American Airlines Group (AAL) is down more than -3%, and Southwest Airlines (LUV) is down more than -1%.

Moderna (MRNA) is down more than -10% today to lead losers in the S&P 500 and vaccine makers lower after Peter Marks, a top FDA regulator overseeing approvals and vaccines and biological drugs, resigned.

Innovative Industrial Properties (IIPR) is down more than -20% after Compass Point Research & Trading LLC downgraded the stock to sell from neutral with a price target of $50.

Sarepta Therapeutics (SRPT) is down more than -8% after RBC Capital Markets downgraded the stock to sector perform from outperform and cut its price target on the stock to $87 from $161.

Mr Cooper Group (COOP) is up more than +17% after Rocket Companies acquired the company in an all-stock transaction valued at $9.4 billion.

Defensive utility stocks are climbing today with the slump in the broader market.  As a result, Exelon Corp (EXC) is up more than +3% to lead gainers in the Nasdaq 100.  Also, American Electric Power (AEP), Duke Energy (EXC), Xcel Energy (XEL), and Consolidated Edison (EIX) are up more than +2%.

Defensive food producers and beverage stocks are moving higher today with weakness in the overall market.  General Mills (GIS) and JM Smucker (SJM) are up more than +2%.  Also, Coca-Cola (KO), Tyson Foods (TSN), Hormel Foods (HRL), PepsiCo (PEP), Hershey (HSY), Conagra Brands (CAG), and Kraft Heinz (KHC) are up more than +1%.

Celsius Holdings (CELH) is up more than +6% after Truist Securities upgraded the stock to buy from hold with a price target of $45. 

AngloGold Ashanti Plc (AU) is up more than +0.75% to lead gold mining stocks higher as the price of gold climbed to a new record high. 

Earnings Reports (3/31/2025)

Caledonia Mining Corp PLC (CMCL), Celcuity Inc (CELC), i-80 Gold Corp (IAU), LanzaTech Global Inc (LNZA), Loar Holdings Inc (LOAR), Maze Therapeutics Inc (MAZE), Nano-X Imaging Ltd (NNOX), Omeros Corp (OMER), Open Lending Corp (LPRO), Progress Software Corp (PRGS), PVH Corp (PVH), Rekor Systems Inc (REKR), Spire Global Inc (SPIR), TechTarget Inc (TTGT).