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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 22:13
  • theglobeandmail.com
  • Keywords: Stock Market Rally, Tariff Policy

US stocks rose sharply as markets reacted positively to news of more targeted US trade policies, with President Trump suggesting possible tariff exemptions, leading to gains across major indices.

SMCI ServicesSPGIsentiment_satisfiedJHXsentiment_satisfied

Estimated market influence

S&P Global

S&P Global

Positivesentiment_satisfied
Analyst rating: Strong buy

The company's services PMI and manufacturing PMI data influenced market sentiment.

James Hardie Industries

James Hardie Industries

Positivesentiment_satisfied
Analyst rating: Buy

Announced acquisition of Azek Co for $8.75 billion, boosting stock prices.

Clearlake Capital Group

Positivesentiment_satisfied
Analyst rating: N/A

Agreed to acquire Dun & Bradstreet Holdings for about $4.1 billion, supporting market activity.

Context

Business Insights and Market Implications

Stock 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 of Market Rally

  • US Trade Policies: Stocks surged on reports that upcoming US tariffs would be more targeted, with some countries exempt and existing tariffs possibly not being cumulative.
  • Geopolitical Risks: Despite heightened risks in the Middle East, markets were less impacted due to expectations of targeted 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.

Economic Indicators

  • Feb Chicago Fed National Activity Index: Rose +0.26 to 0.18, stronger than expected (-0.17).
  • Mar S&P Global Services PMI: Rose +3.3 to 54.3, beating expectations of no change (51.0).
  • Mar S&P Global Manufacturing PMI: Fell -2.9 to 49.8, weaker than expected (51.7).

Interest Rates and Inflation

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

Geopolitical Risks

  • Middle East: Israel-Hamas conflict and US strikes in Yemen increased geopolitical tensions but had limited impact on markets.

Market Sentiment and Expectations

  • Market Discounting: 16% chance of a -25 bp rate cut after the May FOMC meeting.
  • Consumer Confidence: Mar Conference Board index expected to fall to 93.6 from 98.3 (down -4.7).

Industry Performance

Magnificent Seven Stocks

  • Tesla: +11%
  • Nvidia, Amazon.com, Meta Platforms: +3% each
  • Alphabet, Apple, Microsoft: +1%, +0.47% respectively

Chip Stocks

  • Advanced Micro Devices: +7%
  • NXP Semiconductors NV: +5%
  • ARM Holdings Plc, ON Semiconductor, Microchip Technology: +4% each
  • Analog Devices, Marvell Technology, KLA Corp, Texas Instruments: +3% each

Cryptocurrency-Exposed Stocks

  • Coinbase Global, MicroStrategy, MARA Holdings, Riot Platforms: +6% each

Defensive Sectors Under Pressure

  • Hormel Foods, Brown-Forman, Kraft Heinz: Declined due to market rally.

Earnings Reports (3/25/2025)

  • Core & Main Inc, Crown Holdings Inc, GameStop Corp, McCormick & Co Inc: Upcoming earnings reports.