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Stocks Soar on Signs US Trade Policies Will be More Targeted

Stocks Soar on Signs US Trade Policies Will be More Targeted

  • 24.03.2025 20:56
  • theglobeandmail.com
  • Keywords: High Tariffs

Stocks surged Monday after reports indicated US trade policies would be more targeted, easing concerns over global tariffs. The S&P 500, Dow Jones, and Nasdaq all closed at two-week highs, with gains driven by optimism about narrower tariff measures and potential exemptions for some countries.

SMCI ServicesJHXsentiment_satisfied

Estimated market influence

James Hardie Industries

James Hardie Industries

Positivesentiment_satisfied
Analyst rating: Buy

Acquired Azek Co for $8.75 billion in cash and stock.

Clearlake Capital Group

Positivesentiment_satisfied
Analyst rating: N/A

Agreed to acquire Dun & Bradstreet Holdings for about $4.1 billion.

Context

Business Insights and Market Implications Analysis

Stock Market Performance

  • S&P 500 Index closed up +1.76%
  • Dow Jones Industrials Index closed up +1.42%
  • Nasdaq 100 Index closed up +2.16%

Key Drivers:

  • Reports on more targeted US tariffs calmed market fears about global trade impacts.
  • President Trump’s announcement of potential exemptions for some countries reduced concerns over broad-based tariffs.

M&A Activity

  • James Hardie Industries agreed to acquire Azek Co for $8.75 billion in cash and stock.
  • Clearlake Capital Group agreed to acquire Dun & Bradstreet Holdings for about $4.1 billion.

Impact:

  • Supported overall market gains, particularly in sectors like industrials and technology.

Economic Indicators

Positive Data:

  • US Feb Chicago Fed national activity index rose +0.26 to 0.18 (vs expectation of -0.17).
  • US Mar S&P Global services PMI rose +3.3 to 54.3 (vs expectation of no change at 51.0).

Negative Data:

  • US Mar S&P Global manufacturing PMI fell -2.9 to 49.8 (vs expectation of 51.7).

Interest Rates and Inflation

  • 10-year T-note yield rose +8.3 bp to 4.329%.
  • 10-year breakeven inflation rate reached a 2-1/2 week high of 2.357%.

Implications:

  • Rising inflation expectations and hawkish Fed comments weighed on bond prices.

Geopolitical Risks

  • Heightened tensions in the Middle East (Israel-Gaza, US-Yemen) posed risks to global markets.

Sector Performance

Gainers:

  • Magnificent Seven stocks (Tesla, Nvidia, Amazon, Meta Platforms, Alphabet, Apple, Microsoft) led gains.
  • Chip stocks (Advanced Micro Devices, NXP Semiconductors NV, ARM Holdings Plc, ON Semiconductor, Microchip Technology, Analog Devices, Marvell Technology, KLA Corp, Texas Instruments) surged.
  • Cryptocurrency-exposed stocks (Coinbase Global, MicroStrategy, MARA Holdings, Riot Platforms) rose after Bitcoin gains.

Losers:

  • Defensive sectors (Hormel Foods, Brown-Forman, Kraft Heinz) underperformed due to market rally.

Upcoming Economic Reports

  • Feb new home sales expected +3.5% m/m to 680,000.
  • Conference Board’s US Mar consumer confidence index expected -4.7 to 93.6.
  • Q4 GDP unrevised at +2.3% q/q annualized.

Fed and ECB Policy Expectations

  • Markets discount chances of a -25 bp rate cut by the Fed at 16% (vs May meeting).
  • Swaps indicate 65% chance of a -25 bp rate cut by the ECB at April 17 policy meeting.

Stock Movers

Notable Gains:

  • Tesla closed up +11%, leading S&P 500 and Nasdaq 100.
  • FedEx closed up +5% after upgrade from Jeffries.

Notable Losses:

  • Lockheed Martin closed down -1% following Boeing win for next-gen fighter jet contract.

Earnings Reports (March 25, 2025)

  • Core & Main Inc (CNM), Crown Holdings Inc (CCK), GameStop Corp (GME), McCormick & Co Inc/MD (MKC).

Key Takeaways:

  • Targeted US trade policies and potential exemptions reduced global trade concerns.
  • Mixed economic data and hawkish Fed comments created volatility in fixed-income markets.
  • Geopolitical risks in the Middle East added pressure to stock markets.
  • M&A activity and sector-specific gains highlighted shifts in market sentiment.