Schwab Market Update
Equity Futures Soar on Targeted Tariff News
Published as of: March 24, 2025, 9:07 a.m. ET
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| The markets | Last price | Change | % change |
|---|---|---|---|
| S&P 500® index |
5,667.56 |
+4.67 |
+0.08% |
| Dow Jones Industrial Average® |
41,985.35 |
+32.03 |
+0.08% |
| Nasdaq Composite® |
17,784.05 |
+92.42 |
+0.52% |
| 10-year Treasury yield |
4.3% |
+0.05 |
+1.29% |
| U.S. Dollar Index |
104.09 |
UNCH |
-- |
| Cboe Volatility Index® |
18.86 |
-0.42 |
-2.18% |
| WTI Crude Oil |
$68.69 |
+$0.41 |
+0.59% |
| Bitcoin |
$87,500 |
+$3,525 |
+4.20% |
(Monday market open) Equity futures were up 1.11% ahead of the opening bell as the bulls took another run at the 5,735 resistance level. Investors welcomed reports that President Trump may tone down his "Liberation Day" round of tariffs by trying to be more targeted toward the countries that have an unfavorable trade imbalance with the U.S.
The March S&P Global Composite PMI reports after Monday's opening bell. The last report was 51.6 which was higher than the preliminary estimate of 50.4. A reading above 50 denotes economic expansion. In January, the PMI was 52.7, which makes the expansion's pace the slowest since April of 2024.
In the week ahead, the economic data to watch will be the Personal Consumption Expenditures (PCE) figures. Those are expected to show core inflation at 2.8% up from 2.7% last month. Even though it's a small move, the direction of travel over the past few months has been higher—which makes it difficult for the Fed to cut rates.
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Three things to watch
- Thousand cuts: The Fed was just one of the five central banks that met last week. However, only the Swiss National Bank (SNB) cut their key rate, while the Bank of Japan (BoJ) was the only one to raise. However, the trend has been to cut. Including last week, the SNB has cut its key rate five times over the last year. Of the largest developed countries, the Bank of Canada (BoC) has cut seven times. The European Central Bank (ECB) has cut six times since June. The Reserve Bank of New Zealand (RBNZ) has cut four times. The Fed, Bank of England (BoE), and the Reserve Bank of Australia (RBA) have all had a least one rate cut. Some may see cutting rates as a negative economic sign, but Cooper Howard, director, fixed income strategy at the Schwab Center for Financial Research, said that the recent rate cuts are a sign of post-pandemic normalization more than slowing economic growth. He warned that the broader risk to global economic growth lies with the trade war.
- Bond buffeting: Last week, some investors took a run at the bond market driving yields lower, just to see them bounce back. "Overall, the bond market is still being buffeted by the conflicting policy consequences of the administration," according to Kathy Jones, managing director and chief fixed income strategist at the Schwab Center for Financial Research. "Some of the proposed policies are expected to slow growth such as tariffs and limits on immigration, while tax cuts and deregulation could boost growth. Similarly, some policies are likely to raise inflation pressures while slower growth could reduce them. With the Fed on hold amid the policy 'uncertainty,' the market is stuck in a range."
- Street streaks: The stock market ended a four-week losing streak last week despite a volatile week. The S&P 500 index (SPX), Dow Jones Industrial Average ($DJI), and the Nasdaq Composite ($COMP) ended the week 0.51%, 1.2%, and 0.17% higher on the week, respectively. Additionally, all sectors were positive for the week led by energy (6.09%), financial (4.23%), and information technology (2.96%). Consumer staples barely eked out a positive return at 3.03%.
On the move
- Korean chip maker FuriosaAI rejected an $800 million offer from Meta (META) electing to remain independent according to Bloomberg. Meta was 2.42% higher in premarket trading.
- Copper futures (/HG) climbed to a new 52-week high ahead of the opening bell. Last month, President Trump signed an executive order to investigate copper imports and investors fear that 25% tariff on copper would tighten copper supplies according to Trading Economics.
- Bitcoin futures (/BTC) rallied 4.20% in pre-market action taking the cryptocurrency up 13% from its March low. However, the short-term tight range could be seen by some technical analysts as a rising wedge pattern that is often seen as a bearish price pattern.
More insights from Schwab
Last week, the Fed lowered its economic growth outlook while increasing their inflation projections hinting at stagflation. Schwab Chief Investment Officer Liz Ann Sonders and Schwab's Jones break down these projections in their latest podcast "Considering the Risk of Stagflation & Uncertainty."
" id="body_disclosure--media_disclosure--273206" >Last week, the Fed lowered its economic growth outlook while increasing their inflation projections hinting at stagflation. Schwab Chief Investment Officer Liz Ann Sonders and Schwab's Jones break down these projections in their latest podcast "Considering the Risk of Stagflation & Uncertainty."
Chart of the day
Data sources: ICE Data Indices. Chart source: thinkorswim® platform.
Past performance is no guarantee of future results.
For illustrative purposes only.
One commonly used risk-on/risk-off indicator is the ICE BofA US High Yield Index. It calculates the spread between "risk free” Treasury yield and risker below investment grade bond yields. In the upper graph, the index has climbed from 2.6 to as high as 3.4, suggesting that investors are moving out of "risk on" mode to "risk off" mode. But zooming out to the last 10 years in the lower graph, the index has been as high as 10 in 2020. While the recent upswing is a trend to keep an eye on, the index isn't flashing any warning lights yet.
The week ahead
