The S&P 500 Index ($SPX) (SPY) today is up +0.79%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.02%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +1.54%. March E-mini S&P futures (ESH25) are up +0.82%, and March E-mini Nasdaq futures (NQH25) are up +1.46%.
Stock indexes today are moderately higher, recovering some of the sharp losses seen over the past two sessions. A slower-than-expected pace of inflation is boosting stocks today after the US Feb CPI rose less than expected. Strength in the Magnificent Seven stocks and a rally in chip stocks today support gains in the broader market. Verizon Communications is down more than -4% and is weighing on the Dow Jones Industrials.
Stocks also garnered some support after President Trump scrapped plans late Tuesday to double tariffs to 50% on Canadian steel and aluminum. However, the European Union today 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.
US Feb CPI rose +0.2% m/m and +2.8% y/y, weaker than expectations of +0.3% /m and +2.9% y/y. Feb CPI ex-food and energy rose +0.2% m/m and +3.1% y/y, weaker than expectations of +0.3% m/m and +3.2% y/y, with the +3.1% y/y gain the smallest year-on-year increase in 3-3/4 years.
US MBA mortgage applications rose +11.2% in the week ended March 7, with mortgage purchase applications up +7.0% and mortgage refinancing applications up +16.2%. The average 30-year fixed rate mortgage fell -6 bp to a 3-month low of 6.67% from 6.73% in the prior week.
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%. However, Mr. Trump granted US automakers a one-month tariff exemption and exempted tariffs for one month on Canada and Mexico for all goods and services compliant with the United States-Mexico-Canada Agreement (USMCA). However, Mr. Trump reiterated that he would impose reciprocal tariffs on foreign nations on April 2, as planned.
Market attention this week will focus on US trade policies, with 25% tariffs on US imports of steel and aluminum scheduled to take effect today. On Thursday, the Feb final-demand PPI is expected to ease to +3.2% y/y from +3.5% y/y in Jan. On Friday, the University of Michigan’s March consumer sentiment index is expected to fall -1.2 to 63.5. Finally, the markets will also see if Congress can approve a spending bill to avert a government shutdown ahead of a March 15 deadline.
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 on today are mixed. The Euro Stoxx 50 is up +1.28%. China’s Shanghai Composite Index fell from a 2-1/4 month high and closed down -0.23%. Japan’s Nikkei Stock 225 closed up +0.07%.
Interest Rates
June 10-year T-notes (ZNM25) today are down -7 ticks. The 10-year T-note yield is up +3.6 bp to 4.316%. June T-notes today are under pressure on negative carryover from a slide in 10-year German bunds to a 16-month low. Also, today’s sharp stock rebound has reduced safe-haven demand for T-notes. In addition, supply pressures are weighing on T-notes as the Treasury will auction $39 billion 10-year T-notes later today as part of this week’s $119 billion T-notes and T-bonds auction package. T-notes briefly pushed higher today after the US Feb CPI rose less than expected, a dovish factor for Fed policy.
European bond yields today are moving higher. The 10-year German bund yield climbed to a 16-month high of 2.940% and is up +1.4 bp to 2.911%. The 10-year UK gilt yield is up +4.8 bp to 4.723%.
ECB President Lagarde said that abrupt shifts in global trade and higher Eurozone defense spending will make it harder to keep inflation stable.
ECB Governing Council member Centeno said the ECB shouldn’t wait to lower interest rates and, “I would prefer to move sooner rather than later.”
Swaps are discounting the chances at 43% 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 provide support to the overall market. Tesla (TSLA) is up more than +7% and Nvidia (NVDA) is up more than +6% to lead gainers in the Dow Jones Industrials. Also, Meta Platforms (META) is up more than +4%, Amazon.com (AMZN) and Alphabet (GOOGL) are up more than +1%, and Microsoft (MSFT) is up +0.41%.
Intel (INTC) is up more than +4% after Reuters reported that Taiwan Semiconductor Manufacturing Co has pitched Nvidia, Advanced Micro Devices, and Broadcom about taking a stake in a joint venture that would operate Intel’s factories.
Chip stocks are rallying today. Micron Technology (MU) is up more than +6%, and ARM Holdings Plc (ARM) is up more than +5%. Also, Broadcom (AVGO), Marvell Technology (MRVL), and Lam Research (LRCX) are up more than +4%. In addition, Advanced Micro Devices (AMD), Applied Materials (AMAT), and KLA Corp (KLAC) are up more than +2%.
Groupon (GRPN) is up more than +29% after forecasting full-year revenue of $493 million-$500 million, above the consensus of $491.3 million.
Talen Energy (TLN) is up more than +8% after Morgan Stanley initiated coverage of the stock with a recommendation of overweight and a price target of $243.
Myriad Genetics (MYGN) is up more than +10% after Piper Sandler upgraded the stock to overweight from neutral with a price target of $12.50.
Crox Inc (CROX) is up more than +2% after Loop Capital Markets upgraded the stock to buy from hold with a price target of $110.
Airline stocks are sliding today, led by a -4% fall in United Airlines Holdings (UAL) after TD Cowen cut its price target on the stock to $150 from $165. Also, American Airlines Group (AAL) is down more than -3%, and Delta Airlines (DAL) and Southwest Airlines (LUV) are down more than -2%.
iRobot (IRBT) is down more than -37% after reporting Q4 revenue of $172 million, weaker than the consensus of $181 million.
Verizon Communications (VZ) is down more than -4% to lead losers in the Dow Jones Industrials and is leading telecommunication stocks lower after Wolfe Research downgraded the stock to peer perform from outperform. Also, Charter Communications (CHTR) is down more than -4%, and AT&T (T) is down more than -3%.
Stellantis NV (STLA) is down more than -3% after Pekao Investment Banking double-downgraded the stock to sell from buy with a price target of $11.47.
PepsiCo (PEP) is down more than -2% after Jeffries downgraded the stock to hold from buy, saying the stock’s current price offers “limited upside.”
Earnings Reports (3/12/2025)
Adobe Inc (ADBE), Crown Castle Inc (CCI), SentinelOne Inc (S), UiPath Inc (PATH).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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