April 8, 2025
S&P futures up 1.5%, rebounding after Monday’s volatile session where the index recovered nearly 5% intraday to close down just 0.2%. VIX below 45. Asia rallied overnight (Japan +6% on trade optimism), while Europe is up over 1%. Treasuries firmer after Monday’s sharp yield spike (30Y +21 bp). Dollar flat, gold +1.3%, Bitcoin flat, WTI crude +0.1%.
The bounce appears driven by oversold technicals and signs the Trump administration may pivot toward a more negotiable tariff tone. Politico noted Treasury Secretary Bessent pushing for a more conciliatory stance, with Trump reportedly telling allies the “tariff end game” may arrive sooner than expected. Still, mixed messaging on trade policy continues to create uncertainty for growth, earnings, and the Fed’s ability to ease further.
NFIB small business sentiment fell to 97.4 in March, below the 51-year average, with firms citing policy uncertainty. USTR Greer testifies today before the Senate Finance Committee. Fed’s Daly speaks at 14:00 ET. Treasury auctions kick off with $58B in 3-year notes.
Notable Corporate Headlines:
- AVGO: Authorized $10B share buyback.
- HUM, UNH, CVS: Boosted by larger-than-expected Medicare reimbursement increase for 2026.
- MRVL: Selling automotive ethernet business to Infineon (IFX.DE) for $2.5B cash.
- LEVI: Rallies on EPS beat, driven by margin expansion and cost control; maintained FY25 guidance.
- PLAY: Q4 sales light, but company flagged improving trends in March and April.
Markets remained volatile Monday following last week’s steep selloff, with equities bouncing off early lows but still ending mostly lower. The S&P 500 is down 17% from February highs and coming off its worst two-day drop since March 2020. Concerns around global trade tensions continued to dominate, with mixed messaging from the Trump administration driving intraday swings. After an early rally on reports of a potential 90-day tariff pause, stocks reversed lower following White House denials and Trump’s threat of an additional 50% tariff on China.
Trump and key advisors (Navarro, Bessent, Lutnick) reaffirmed their hawkish stance, despite outreach from global trade partners. Markets remain on edge over the lack of clarity around negotiations, retaliation risks, and inflation implications. Fed Governor Kugler warned that tariffs are already showing signs of pushing up prices, reinforcing Powell’s recent comments about the risk of persistent inflation. The Fed has priced in ~100 bp of cuts by year-end, but growing recession fears and sticky inflation complicate the path forward.
No major data was released Monday. The week ahead includes CPI (Thursday), PPI and Michigan sentiment (Friday), and several Fed speakers. Treasuries sold off with the curve steepening; yields up 11-22 bp. The dollar gained 0.2%, gold dropped 2.0%, Bitcoin fell 2.3%, and crude settled down 2.1% at $60.70, the lowest since April 2021.
Sector Highlights
Information Technology (+0.32%)
Consumer Discretionary (−0.54%)
- GM (−1.5%): Downgraded to Underperform at Bernstein on FCF and 2026 earnings risk from tariffs.
- DLTR (+7.8%): Upgraded to Buy at Citi, citing pricing power and strong value proposition in tariff environment.
- FIVE (+7.2%): Upgraded to Neutral at JPM, with potential comp upside and tariff mitigation efforts noted.
- TSLA (−2.6%): Wedbush cut price target by 43%, citing brand damage and political fallout.
- SBUX (−2.6%): Slowing India expansion amid foot traffic declines; downgraded at Baird.
- RH rebounded off last week’s tariff-driven slide after clarification on reciprocal tariff impacts.
Healthcare (−0.60%)
- QGEN (+5.4%): Preannounced strong Q1 results, raised FY guidance, citing robust demand for latent TB testing.
Industrials (−0.44%)
- CAT (−2.8%): Downgraded to Sell at UBS; macro deterioration in freight, mining, construction cited; limited pricing power under tariffs.
- HWM declared force majeure due to tariff-related supply chain issues.
- CSGP (+4.3%): Rose after entering board refreshment agreements with DE Shaw and Third Point.
Real Estate (−2.40%)
No notable stock-specific updates.
Materials (−1.65%)
- Auto complex, chemicals, and paper/packaging among key underperformers amid tariff-related margin concerns.
Financials (+0.15%)
- Volatility-sensitive names and banks, credit cards, and asset managers bounced modestly.
- FT reported that APO, BX, CG, and KKR are facing investor interest in PE stake sales amid downturn.
Communication Services (+1.03%)
- META launched its Llama 4 AI models amid increasing competition from Chinese offerings.
- WBD gained on strong opening weekend for Minecraft movie (~$150M+).
Energy (−0.94%)
- Crude down another 2.1%, pressuring oil services and integrated names.
Consumer Staples (−1.18%)
- Defensive underperformance tied to rate sensitivity and inflation outlook.
Utilities (−1.53%)
- Under pressure amid rising Treasury yields and inflation expectations.
Eco Data Releases | Tuesday April 8th, 2025
S&P 500 Constituent Earnings Announcements | Tuesday April 8th, 2025
No constituents report today
Data sourced from FactSet Research Systems Inc.
