The futures markets are trading slightly lower this morning ahead of a few key economic releases and following a weak day of trading yesterday. News broke late yesterday that the White House will declare new 25% tariffs will be applied to foreign-made automobiles. The levies would be in addition to other duties placed on a broad array of goods that are slated to be enacted on April 2nd. However, these remain subject to change given that past policy declarations have been delayed. Several automakers, such as General Motors (GM), Stellantis (STLA), and Ford (F), fell on the news. Meantime, the Bureau of Economic Analysis revised U.S. GDP estimates higher by .1% for the fourth quarter of 2024 to an annualized growth rate of 2.4%. A significant portion of this growth was attributable to the real estate markets, as well as professional, scientific, and technology services. Overall, the markets took this news in stride and moved toward breakeven levels, suggesting an uneven start to the trading day.
The markets had a wobbly start yesterday, moving little in the early stages of the trading session. Then sentiment quickly shifted, and stocks began to sell off. The major market indices then trended downward throughout the day. Overall, the S&P 500 fell 64 points (down 1.12%), the NASDAQ finished off 373 points (down 2.04%), and the Dow Jones Industrial Average declined 133 points (down 0.31%). Moreover, market breadth was quite negative, with decliners outpacing advancers by a 1.8-to-1.0 ratio. Consumer staples were amongst the best performers of the day, while technology issues were amongst the weakest.
In commodity news, crude oil prices fell considerably alongside the broader market as fears of oversupply in the marketplace took hold. Elsewhere, U.S. Treasury bond yields were mixed, with short-term yields moving little, while long-term interest rates rose. The Chicago Board Options Exchange Volatility Index, or VIX, commonly known as the fear index, rose rapidly yesterday, as traders demanded more options protection.
Several economic indicators will be released tomorrow. These include the Personal Consumption Expenditures (PCE) Price Index, the final University of Michigan Consumer Sentiment Index for March, and personal spending and income. Elsewhere, few companies are slated to report quarterly results tomorrow, and those on the docket are mostly smaller in size. Overall, we think that most eyes will be looking ahead to April 2nd, which is the day that President Trump has stated he plans to enact a wide array of tariffs on goods from other countries. -John E. Seibert III
At the time of this article’s writing, the author held positions in one or more of the companies mentioned.
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