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 22:10
  • theglobeandmail.com
  • Keywords: High Tariffs, Geopolitical Risks

US stocks surged as markets reacted positively to news that upcoming US tariffs would be more targeted, with some countries exempted. President Trump’s announcement of "Liberation Day" tariffs aimed at specific sectors rather than globally calmed fears about trade impacts, driving the S&P 500, Dow Jones, and Nasdaq to two-week highs.

SMCI ServicesJHXsentiment_satisfied
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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

Analysis: Business Insights and Market Implications

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 Gainers:

  • Magnificent Seven stocks (Alphabet, Apple, Amazon, Meta, Microsoft, Netflix, Tesla) led gains.
  • Chip stocks (Nvidia, AMD, NXP Semiconductors) surged.
  • Cryptocurrency-exposed stocks (Coinbase Global, MicroStrategy) rose over +6%.

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 $4.1 billion.

Trade Policy Developments

  • President Trump’s "Liberation Day" tariff announcement on April 2 will focus on:
    • More targeted reciprocal tariffs.
    • Possible exemptions or reductions for some countries.
    • Non-cumulative tariffs on steel and other metals.

Market Impact:

  • Stocks rallied due to reduced fears of global trade disruption.
  • Tariffs on Canadian, Mexican, and Chinese goods remain at 25%, but narrower than initially feared.

Economic Indicators

Positive Signs:

  • US Feb Chicago Fed national activity index rose +0.26 to 0.18 (vs. expected decline).
  • Mar S&P Global services PMI rose +3.3 to 54.3 (vs. expected no change).

Negative Signs:

  • Mar S&P Global manufacturing PMI fell -2.9 to 49.8 (weaker than expected).

Geopolitical Risks

  • Middle East tensions:
    • Israel-Hamas conflict escalated with airstrikes.
    • US strikes on Yemen’s Houthi rebels continued.

Market Impact:

  • Heightened geopolitical risks weighed on sentiment but had limited direct impact on stocks.

Corporate Earnings and Mergers

Stock Movers:

  • Magnificent Seven and chip stocks boosted the market.
  • Tesla led gains with +11% rise, followed by Nvidia (+7%) and Amazon (+3%).

M&A Highlights:

  • James Hardie Industries-Azek Co deal valued at $8.75 billion.
  • Clearlake Capital Group-Dun & Bradstreet Holdings deal valued at $4.1 billion.

Interest Rates and Bond Markets

US Treasuries:

  • 10-year T-note yield rose +8.3 bp to 4.329%.
  • Hawkish comments from Atlanta Fed President Bostic:
    • Sees only one 25 bp rate cut this year.
    • Cited "bumpy" inflation and uncertainty around Fed’s 2% target.

Global Bond Markets:

  • German Bund yield rose +0.6 bp to 2.771%.
  • UK gilt yield remained unchanged at 4.713%.

Cryptocurrency Impact

  • Bitcoin surged +4%, driving gains in cryptocurrency-exposed stocks:
    • Coinbase Global, MicroStrategy, MARA Holdings, and Riot Platforms rose over +6%.

Long-Term Implications

  • Targeted trade policies may reduce global supply chain disruptions.
  • Geopolitical risks remain a wildcard for market stability. -hawkish Fed stance and inflation expectations could influence bond yields and equity markets.

Key Takeaways

  • Stock rally reflects easing fears over US trade policy and targeted tariffs.
  • M&A activity and strong PMI data support market optimism.
  • Geopolitical tensions and hawkish Fed comments pose risks to short-term gains.