Stocks Sharply Higher on Hopes for US Trade Deals
The S&P 500 Index ($SPX) (SPY) today is up +3.05%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +3.01%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +3.39%. June E-mini S&P futures (ESM25) are up +3.04%, and June E-mini Nasdaq futures (NQM25) are up +3.16%.
Stock indexes today are sharply higher, recovering some of the enormous losses over the past three sessions that sent the S&P 500 falling nearly 15% from last Wednesday's close. Hopes of a tariff deal with Japan have sparked short covering in stocks after a call between President Trump and Prime Minister Ishiba late Monday spurred optimism that Japan might strike a trade deal with the US to reduce or avert a 24% levy on imports, set to come into effect Wednesday.
However, tariff concerns continue after President Trump rejected a European Union (EU) proposal to drop tariffs on all bilateral trade in industrial goods with the US, meaning the 20% tariff on all EU imports is set to kick in on Wednesday. Also, China has pledged to retaliate against President Trump's latest tariff threat, which is to add 50% tariffs on all Chinese goods if it refuses to remove its 34% tariff on US goods by Wednesday. China's Ministry of Commerce said today, "The US threat to escalate tariffs on China is a mistake on top of a mistake, and if the US insists on its own way, China will fight to the end."
Late Monday, Chicago Fed President Goolsbee said some business leaders expressed anxiety about the possibility that tariffs could send the economy back to the conditions of 2021 and 2022 when inflation was "raging out of control."
Equity markets worldwide sank on Monday because of concern that a trade war will push the global economy into recession. The carnage in equity markets began last Wednesday when President Trump announced reciprocal tariffs that were worse than feared, raising concerns that US trade policies will push the US economy and perhaps the global economy into recession. Stock losses deepened last Friday when China retaliated against US tariffs by imposing a 34% tariff on all imports from the US starting April 10. On Monday, President Trump said, "We're not looking at a tariff pause," and "If China does not withdraw its 34% increase on tariffs to US goods by Tuesday, the US will impose additional tariffs on China of 50%, effective April 9."
Last Wednesday, President Trump said the US will impose at least a 10% tariff on virtually all countries, with higher reciprocal rates on some 60 nations. The new tariffs were implemented on imports from almost all countries on Saturday, with the higher rates implemented on April 9. Specific industries, including steel and automobiles, are exempt from the new rates, and Canada and Mexico are also exempt from the new tariffs and will be subject to the previously announced 25% tariffs. However, China will be charged a 34% reciprocal tariff rate, bringing total tariffs on China up to 67%. The EU will be charged a 20% reciprocal tariff, bringing total tariffs on the EU up to 39%. Meanwhile, Japan will be charged a 24% reciprocal tariff, bringing total tariffs on Japan up to 46%.
Stocks have been under pressure over the past month due to fears that US tariffs will weaken economic growth and corporate earnings. On March 4, President Trump imposed 25% tariffs on Canadian and Mexican goods and doubled the tariff on Chinese goods to 20% from 10%. Last Wednesday, President Trump signed a proclamation to implement a 25% tariff on US auto imports, effective Thursday. The tariffs will initially target vehicles fully assembled outside the US and, by May 3, will expand to include automobile parts made outside the US. Mr. Trump said the tariffs were "permanent," and he was not interested in negotiating any exceptions.
The markets are discounting the chances at 27% for a -25 bp rate cut after the May 6-7 FOMC meeting, down from 30% last week.
Market attention this week will focus on US trade policies and whether other nations retaliate against US tariffs. On Wednesday, the March 18-19 FOMC meeting minutes will be released. On Thursday, the March CPI is expected to ease to +2.6% y/y from 2.8% y/y in Feb, and the March CPI ex-food and energy is expected to ease to +3.0% y/y from +3.1% y/y in Feb. On Friday, the March final-demand PPI expected to climb to +3.3% y/y from +3.2% y/y in Feb, and the March PPI ex-food and energy is expected to rise to +3.6% y/y from +3.4% y/y in Feb. Finally, the University of Michigan Apr US consumer sentiment index is expected to fall to 54.0 from 57.0 in March.
Q1 earnings reporting season will begin on Friday when big US banks report their results. According to data compiled by Bloomberg Intelligence, the market consensus is for Q1 year-over-year earnings growth of +6.7% for the S&P 500, down from expectations of +11.1% in early November. Full-year 2025 corporate profits for the S&P 500 are seen rising +9.4%, down from the forecast of +12.5% in early January.
Overseas stock markets today are higher. The Euro Stoxx 50 is up +3.14%. China's Shanghai Composite Index closed up +1.58%. Japan's Nikkei Stock 225 closed up sharply by +6.03%.
Interest Rates
June 10-year T-notes (ZNM2 5) today are down -22 ticks. The 10-year T-note yield is up +6.5 to 4.249%. June T-notes today are moderately lower, and the 10-year T-note yield rose to a 1-week high of 4.258% as a recovery in global equity markets reduced safe-haven demand for government debt. Also, comments from Chicago Fed President Goolsbee weighed on T-notes when he said some business leaders expressed anxiety about the possibility that tariffs could send inflation "raging out of control." In addition, supply pressures are weighing on T-notes as the Treasury will auction $119 billion of T-notes and T-bonds this week, beginning with today's $58 billion auction of 3-year T-notes.
European bond yields today are moving higher. The 10-year German bund yield is up +6.1 bp to 2.674%. The 10-year UK gilt yield is up +3.2 bp to 4.647%.
ECB Governing Council member Simkus said, "I still think the ECB should cut rates this month, and then, with a lot more information in June, including more clarity on tariffs and other things, we can think about whether we should wait and see or cut again."
Swaps are discounting the chances at 90% for a -25 bp rate cut by the ECB at the April 17 policy meeting.
US Stock Movers
The Magnificent Seven stocks today are sharply higher, a bullish factor for the broader market. Nvidia (NVDA) is up more than +7%, and Meta Platforms (META) and Tesla (TSLA) are up more than +4%. Also, Apple (AAPL), Microsoft (MSFT), Amazon.com (AMZN), and Alphabet (GOOGL) are up more than +3%.
Health insurance stocks are soaring today after the Centers for Medicare & Medicaid Services finalized a 5.06% average increase in payments to Medicare Advantage plans from 2025 to 2026, higher than an earlier projection. As a result, Humana (HUM) is up more than +13% to lead gainers in the S&P 500, and Alignment Healthcare (ALHC) is up more than +10%. Also, UnitedHealth Group (UNH) is up more than +8% to lead gainers in the S&P 500 and Dow Jones Industrials. In addition, CVS Health Corp (CVS) is up more than +8%, and Centene (CNC) is up more than +5%.
Chip makers are climbing today to boost the overall market. ARM Holdings Plc (ARM) is up more than -7%, and Micron Technology (MU), Advanced Micro Devices (AMD), and KLA Corp (KLAC) are up more than +5%. Also, Applied Materials (AMAT) and Lam Research (LRCX) are up more than +4%, and Intel (INTC), Analog Devices (ADI), and Qualcomm (QCOM) are up more than +2%.
Marvell Technology (MRVL) is up more than +8% to lead gainers in the Nasdaq 100 after selling its automotive networking business to Infineon for $2.5 billion.
Broadcom (AVGO) is up more than +7% after authorizing a new stock buyback program of up to $10 billion.
Eli Lilly & Co (LLY) is up more than +3% after Goldman Sachs upgraded the stock to buy from neutral with a price target of $888.
Teradata Corp (TDC) is up more than +3% after Morgan Stanley upgraded the stock to overweight from equal weight with a price target of $26.
Range Resources (RRC) is up more than +2% after Roth Capital Partners upgraded the stock to buy from neutral with a price target of $42.
Levi Strauss & Co (LEVI) is up more than +2% after reporting Q1 net revenue of $1.53 billion, up +3.2% y/y, and maintaining its full-year outlook, excluding the impact of recent tariffs.
Walgreens Boots Alliance (WBA) is up more than +1% after reporting Q2 sales of $38.60 billion, better than the consensus of $38.03 billion.
RPM International (RPM) is down more than -5% after reporting Q3 net sales of $1.48 billion, weaker than the consensus of $1.51 billion.
AT&T (T) is down more than -1% after Citigroup cut the stock from its Focus List, citing valuation due to its recent outperformance.
Virtu Financial (VIRT) is down more than -1% after Morgan Stanley downgraded the stock to underweight from equal weight with a price target of $26.
Earnings Reports (4/8/2025)
Aehr Test Systems (AEHR), Cal-Maine Foods Inc (CALM), Dakota Gold Corp (DC), Kura Sushi USA Inc (KRUS), Mama's Creations Inc (MAMA), PACS Group Inc (PACS), RPM International Inc (RPM), Walgreens Boots Alliance Inc (WBA), WD-40 Co (WDFC).
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Canada Standard
31 minutes ago
- Canada Standard
Australia stands firm on biosecurity in trade talks with US
SYDNEY, Australia: Australia will not ease its strict biosecurity rules during trade talks with the United States, Prime Minister Anthony Albanese said.. He spoke ahead of a possible meeting with U.S. President Donald Trump at the G7 summit later this month. Since 2003, Australia has limited the entry of U.S. beef due to concerns about mad cow disease. However, Australia still exports about A$4 billion (US$2.6 billion) worth of beef each year to the U.S., its biggest market. "We will not change or compromise on biosecurity—period. It's simply not worth the risk," Albanese told ABC Radio. In April, Trump criticized Australian beef while announcing a 10 percent base tariff on all imports. While years of dry weather have reduced the number of cattle in the U.S. to the lowest since the 1950s, Australia has an abundant supply thanks to wet weather. This gives Australia an edge with lower prices, and leaner beef cuts that the U.S. lacks. A report in the Sydney Morning Herald on June 6 said that Australian officials were reviewing a U.S. request to allow beef from cattle raised in Mexico and Canada but processed in the U.S. Albanese firmly denied this, saying those products still pose risks to Australia's cattle industry. Australia is one of the few countries with which the U.S. usually has a trade surplus—a point Australian officials often raise when arguing against Trump's tariffs. In January, Australia posted a rare trade surplus with the U.S., driven by high gold exports amid global uncertainty. Albanese said he looked forward to meeting Trump in person, though no date was confirmed. "We've had three talks that were constructive, polite, and respectful. That's how I engage with people," he said. He added that Australia isn't the only one being treated unfairly and that U.S. trade policies affect many other countries.
Globe and Mail
an hour ago
- Globe and Mail
Prediction: This High-Yield Dividend Stock Will Crush the S&P 500's Returns Over the Next Decade
A high dividend yield often signals that a company's growth days are in the rearview mirror. In many cases, the high-yielding income stream makes up most, if not all, of the return the company delivers for investors. Given the lackluster returns of many high-yielding dividend stocks, investors seeking market-crushing returns will probably overlook Brookfield Renewable (NYSE: BEPC)(NYSE: BEP) because of its more than 5% yield. However, that could prove to be a big mistake. I predict this leading renewable energy dividend stock will crush the S&P 500 's returns over the next decade. Here's why. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » A strong base return A high-yielding dividend is sometimes a warning sign for investors. The company might have a weak financial profile or lackluster growth prospects. Neither of those is an issue for Brookfield Renewable. The opposite is true for this company. For starters, the company backs its lucrative dividend with a top-notch financial Renewable sells about 90% of the renewable energy it produces under long-term, fixed-rate power purchase agreements (PPAs). Those PPAs have an average remaining term of 14 years while indexing about 70% of the company's revenue to inflation. That means Brookfield can bank on generating very predictable and steadily growing cash flow. The company estimates that the inflation escalation clauses embedded within its existing PPAs will power 2% to 3% annual growth in its funds from operations (FFO) per share. Meanwhile, power rates have been growing faster than inflation in recent years. That trend seems likely to continue, given the expected surge in power demand driven by catalysts like AI data centers. Brookfield anticipates that margin enhancement activities such as securing higher market power rates as legacy PPAs expire will add another 2% to 4% to its FFO per share each year. On top of generating very stable and steadily rising cash flow, Brookfield has a strong investment-grade balance sheet. It funds its business with long-term, fixed-rate debt and keeps ample liquidity on hand, to the tune of $4.5 billion at the end of the first quarter. Brookfield also routinely recycles capital, selling mature assets to fund higher-returning new investments, which enables it to maintain its financial flexibility. The company's combination of stable cash flow and balance sheet strength puts its more than 5%-yielding dividend on a sustainable foundation. It should provide investors with very bankable dividend income. A powerful growth profile Brookfield Renewable can grow its FFO per share at a 4% to 7% annual rate without investing any additional capital. That would be a solid growth rate for a high-yielding dividend stock. However, the company has the financial flexibility to invest heavily in growing its platform. It's currently targeting to deploy $8 billion to $9 billion or more into new growth opportunities over the next five years. Some of that capital will go into its massive backlog of renewable energy development projects. Brookfield currently has 74 gigawatts (GW) in its advanced-stage pipeline. That's nearly double its current operational capacity (43.3 GW). The company is ramping up its development capabilities to reach an annual commissioning run rate of 10 GW per year, which it expects to achieve by 2027. That's up from 8 GW this year. Development projects will add another 4% to 6% to its FFO per share each year. On top of that, the company plans to continue making accretive acquisitions, largely funded through capital recycling, to further accelerate its FFO growth rate. Brookfield recently closed its acquisition of European renewable power developer Neoen. Meanwhile, it agreed to buy National Grid 's U.S. onshore power platform, National Grid Renewables. Add it all up, and Brookfield believes it can grow its FFO per share at a more than 10% annual rate through 2034. The company's growth is highly visible and secured through 2029 and increasingly visible and secured over the subsequent five-year period. That easily supports its plan to increase its dividend by 5% to 9% annually. Brookfield has grown its payout at a 6% compound annual rate since 2001. It all adds up to the potential for producing market-crushing returns Brookfield Renewable pays a more than 5% yielding dividend, which provides investors with a strong base return. On top of that, the company expects to grow its earnings per share at a rate of more than 10% annually for the next several years. That should easily support its plan to increase its already high-yielding payout by 5% to 9% per year. Put it all together, and Brookfield could produce total annual returns in the mid-teens, which should crush the S&P 500's return over the next 10 years. That makes it a great stock to buy and hold right now. Should you invest $1,000 in Brookfield Renewable right now? Before you buy stock in Brookfield Renewable, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Brookfield Renewable wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $868,615!* Now, it's worth noting Stock Advisor 's total average return is792% — a market-crushing outperformance compared to173%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 9, 2025
Winnipeg Free Press
an hour ago
- Winnipeg Free Press
Trump vows to 'HIT' any protester who spits on police. He pardoned those who did far worse on Jan. 6
In one of his first acts of his second term as president, Donald Trumppardoned hundreds of people who attacked the U.S. Capitol on Jan. 6, 2021, to try to keep him in office, including those who beat police officers. On Monday, Trump posted a warning on social media to those demonstrating in Los Angeles against his immigration crackdown and confronting police and members of the National Guard he had deployed: 'IF THEY SPIT, WE WILL HIT, and I promise you they will be hit harder than they have ever been hit before. Such disrespect will not be tolerated!' The discrepancy of Trump's response to the two disturbances — pardoning rioters who beat police on Jan. 6, which he called 'a beautiful day,' while condemning violence against law enforcement in Los Angeles — illustrates how the president expects his enemies to be held to different standards than his supporters. 'Trump's behavior makes clear that he only values the rule of law and the people who enforce it when it's to his political advantage,' said Brendan Nyhan, a political scientist at Dartmouth College. Trump pardoned more than 1,000 people who tried to halt the transfer of power on that day in 2021, when about 140 officers were injured. The former U.S. attorney for the District of Columbia, Matthew Graves, called it 'likely the largest single day mass assault of law enforcement ' in American history. Trump's pardon covered people convicted of attacking police with flagpoles, a hockey stick and a crutch. Many of the assaults were captured on surveillance or body camera footage that showed rioters engaging in hand-to-hand combat with police as officers desperately fought to beat back the angry crowd. While some who were pardoned were convicted of nonviolent crimes, Trump pardoned at least 276 defendants who were convicted of assault charges, according to an Associated Press review of court records. Nearly 300 others had their pending charges dismissed as a result of Trump's sweeping act of clemency. Roughly 180 of the defendants were charged with assaulting, resisting or impeding law enforcement or obstructing officers during a civil disorder. 'They were extremely violent, and they have been treated as if their crimes were nothing, and now the president is trying to use the perception of violence by some protesters as an excuse to crack some heads,' said Mike Romano, who was a deputy chief of the section of the U.S. Attorney's office that prosecuted those involved in the Capitol siege. A White House spokesman, Harrison Fields, defended the president's response: 'President Trump was elected to secure the border, equip federal officials with the tools to execute this plan, and restore law and order.' Trump has long planned to use civil unrest as an opportunity to invoke broad presidential powers, and he seemed poised to do just that on Monday as he activated a battalion of U.S. Marines to support the presence of the National Guard. He mobilized the Guard on Saturday over the opposition of California's governor, Gavin Newsom, and Los Angeles Mayor Karen Bass, both Democrats. The Guard was last sent to Los Angeles by a president during the Rodney King riots in 1992, when President George H.W. Bush invoked the Insurrection Act. Those riots were significantly more violent and widespread than the current protests in Los Angeles, which were largely confined to a stretch of downtown, a relatively small patch in a city of 469 square miles and nearly 4 million people. The current demonstrations were sparked by a confrontation Saturday in the city of Paramount, southeast of downtown Los Angeles, where federal agents were staging at a Department of Homeland Security office. California officials, who are largely Democrats, argued that Trump is trying to create more chaos to expand his power. Newsom, whom Trump suggested should be arrested, called the president's acts 'authoritarian.' But even Rick Caruso, a prominent Los Angeles Republican and former mayoral candidate, posted on the social media site X that the president should not have called in the National Guard. Protests escalated after the Guard arrived, with demonstrators blockading a downtown freeway. Some some set multiple self-driving cars on fire and pelted Los Angeles police with debris and fireworks. Romano said he worried that Trump's double standard on how demonstrators should treat law enforcement will weaken the position of police in American society. He recalled that, during the Capitol attack, many rioters thought police should let them into the building because they had supported law enforcement's crackdown on anti-police demonstrations after George Floyd was murdered in 2020. That sort of 'transactional' approach Trump advocates is toxic, Romano said. 'We need to expect law enforcement are doing their jobs properly,' he said. Believing they just cater to the president 'is going to undermine public trust in law enforcement.' ___ Associated Press writers Michael Kunzleman and Alanna Durkin Richer in Washington contributed to this report.
