Tariff relief fading already? 25/03/2025

HOT stories for today

 

US market wrap:
 

• The U.S. stock market gained traction Monday, opening in positive territory and steadily climbing as the session progressed. The Dow Jones Industrial Average rose approximately 1.4%, the S&P 500 advanced nearly 1.8%, and the tech-focused Nasdaq Composite surged 2.3%. Heavily discounted stocks rallied alongside major tech names, fueled by reports that President Trump’s tariffs may be less harsh than initially expected.
• Optimism grew during the session on speculation that the White House could scale back the scope of upcoming tariffs. However, Wall Street stayed cautious, with concerns lingering about rising inflation and decelerating economic growth ahead of the reciprocal tariff rollout expected on April 2. Traders remained active, hunting for opportunities to capitalize on the renewed momentum. Later in the day, President Trump suggested he might offer exemptions to several countries, though he confirmed that levies on sectors like pharmaceuticals and automobiles remain on the horizon. That could sparkle more trade confudion.

Tariff relief fading already?
 

• Any sense of relief over a potential scaling back of U.S. tariff plans may be short-lived, as President Donald Trump on Monday signaled more duties are on the way—this time targeting key sectors like automobiles, pharmaceuticals, lumber, and semiconductors. “We’ll be announcing cars very shortly,” Trump said during a Cabinet meeting, adding that tariffs on pharmaceuticals would follow “in the very near future.” Later, he expanded the list to include lumber and semiconductors, though he suggested those could come “down the road.”
• Despite the broadening scope, Trump also said he “may give a lot of countries breaks” on the reciprocal tariffs scheduled for April 2. When asked if industry-specific tariffs would launch the same day, he first said “everything” would, then clarified that “not all tariffs are included that day.” The Wall Street Journal reported Sunday that the White House may exclude sector-specific tariffs from the April 2 rollout, a shift from previous suggestions that both types would begin simultaneously.

 
Stocks on the move: 
 

• Tesla (TSLA) — Shares of the electric vehicle giant surged nearly 12%, topping the S&P 500 leaderboard. The tech-heavy stock, popular among retail traders, rebounded sharply after suffering nine consecutive weeks of losses — its longest weekly losing streak on record
• Visa (V) — The payments giant climbed 2.5% following news from Coinbase that World Network, a crypto startup led by OpenAI CEO Sam Altman, is in discussions with Visa to launch a stablecoin wallet
• Pinterest (PINS) — The image-sharing and social media company advanced 5% after analysts at Guggenheim upgraded the stock to buy from neutral, citing a more favorable outlook
• Boeing (BA) — Shares of the aerospace manufacturer gained over 1.5% after Melius Research raised its rating to buy from neutral, pointing to improved sentiment around the stock
• FedEx (FDX) — The logistics and delivery firm rallied more than 5% after Jefferies upgraded it to buy from hold, highlighting what it called an “overlooked cost transformation” that could drive future performance
   

Today’s action

• Asia-Pacific markets were mixed Tuesday as investors weighed U.S. President Donald Trump’s escalating tariff rhetoric. Hong Kong’s Hang Seng Index dropped 1.79%, with the Hang Seng Tech Index tumbling 2.91%. Mainland China’s CSI 300 trimmed earlier losses to trade flat. In Japan, the Nikkei 225 advanced 0.54% late in the session, while the broader Topix index rose 0.30%. European markets are expected to open lower amid continued uncertainty around Trump’s trade agenda.
• In the U.S., stock futures dipped slightly Tuesday morning following Monday’s rally, which was driven by optimism that Trump may soften his approach to tariffs. S&P 500 futures (ES=F) slipped 0.15%, Nasdaq 100 futures (NQ=F) declined 0.18%, and Dow Jones Industrial Average futures (YM=F) fell by 70 points, or 0.16%. Traders are now turning their attention to several key data releases, including March consumer confidence, February new home sales, and the Richmond Fed’s manufacturing index. Markets will also be listening for remarks from Fed officials Adriana Kugler and John Williams later in the day.

Watchlist: NVDA, SMCI, TSLA, BA, LUNR, KBH, MKC, CNM

Bitcoin

• Bitcoin (BTCUSD) hovered around $86,811 on Monday, circling the $85,000 level into the March 23 weekly close as momentum built around a potential trend shift. Standard Chartered says the cryptocurrency is acting more like a tech stock than a safe-haven asset, with its correlation to the Nasdaq around 0.5—far higher than its fading connection to gold, now just above 0.2. “Bitcoin could be included in a tech stock basket, attracting more institutional interest,” said Geoff Kendrick, the bank’s head of digital asset research.
• The bank’s custom “Mag 7B” index, which replaces Tesla (TSLA) with bitcoin in the Magnificent 7, has outperformed the original group in five of the past seven years. Despite recent tariff-driven volatility, bitcoin may regain strength in Q2, supported by its positive link to M2 money supply and negative correlation with the U.S. dollar index (DXY).
  Watchlist: Bitcoin: 78 000-100 000, Ethereum:1900-2600, Solana: 100-176
   

Forex

• The Japanese Yen (JPY) bounced back Tuesday after touching a three-week low against the U.S. Dollar (USD), snapping a three-day losing streak. The recovery was fueled by hawkish minutes from the Bank of Japan’s January meeting, where policymakers discussed the possibility of further rate hikes. This stands in contrast to the Federal Reserve’s outlook, which includes two rate cuts in 2025, limiting USD upside and keeping USD/JPY capped below the 151.00 level.
• However, reduced safe-haven demand may temper further gains for the yen in the near term. Meanwhile, EUR/USD edged higher during the Asian session, rebounding from a two-week low near 1.0770 reached Monday. The pair reclaimed the 1.0800 level as the USD softened, but the move remains shallow. The technical setup still favors the bears, with a firm break above recent highs needed to shift the near-term outlook.
  Watchlist: EUR/USD: 1.0700-1.0950, USD/JPY: 148-151
   

Basic Materials

• Gold (XAU/USD) edged higher during Tuesday’s Asian session, breaking a three-day losing streak as the U.S. dollar retreated from recent highs. A softer greenback and growing expectations that the Federal Reserve may soon resume rate cuts—amid fears of a tariff-induced slowdown—helped attract dip buyers to the metal.
• Markets now turn to Tuesday’s U.S. macroeconomic data and comments from Fed officials for fresh direction.Meanwhile, West Texas Intermediate (WTI) crude climbed toward $69.00, hitting a three-week high after President Donald Trump announced a 25% tariff on countries purchasing oil or gas from Venezuela, effective April 2. New tariffs directly targeting Venezuela are also planned. However, hopes for a ceasefire in Ukraine could limit further upside in oil prices.
  Watchlist: GOLD 2600-3050, US Oil: 65.00-79.00
   

Key Economic Events Today:

EST time

08:40 am: USD FOMC Member Kugler Speaks
09:00 am: USD S&P/CS Composite -20 HPI
09:05 am: USD FOMC Member Williams Speaks
10:00 am: USD Consumer Confidence
10:00 am: USD New Home Sales
10:00 am: USD Richmond Manufacturing Index

Earnings

BMO (Before the US Market opens)
MKC        McCormick & Company
CNM        Core & Main Inc.
SFD         Smithfield Foods
PONY      Pony AI
RUM        Rumble Inc.
AMC (After the US Market closes): GME, WOR


The TEFS Analyst team wishes you a successful day!