MARKET WRAPS
Watch For:
No major economic or corporate trading updates expected
Opening Call:
European stock futures point to a lower open as global markets brace for details of Trump’s sweeping tariff plans. Asian stock benchmarks edged higher amid a cautious mood; the dollar fell slightly; Treasury yields rose; while oil steadied and gold futures rose.
Equities:
Stock futures fell early Wednesday as markets await President Trump’s tariff announcement later in the day. What Trump will announce remains unknown.
Trump’s so-called “Liberation Day” is likely just one of many steps in the ongoing trade war. It’s unlikely to bring clarity around the policy that investors, businesses and households are hankering for, said Ethan Harris, former head of economic research at BofA.
Even if the trade war ends, the U.S. economy will still weaken because of policies elsewhere, such as cuts to government spending and employment, he said.
“Whatever the president announces [Wednesday] can easily be undone the next morning,” said Don Calcagni, chief investment officer at Mercer Advisors. “As a professional investor, I want permanence. I don’t want the rules to keep changing.”
Forex:
“Should tariffs be watered down enough, appetite for risk could rebound, ” said Matt Simpson, market analyst at Forex.com and City Index.
“But if they are as severe as feared, Wall Street indices could be facing another leg lower,” Simpson said. This leaves “headline risk on the table, and CAD, MXN, Nasdaq and S&P 500 in the limelight alongside bond yields over the next 24 hours at a minimum, and potentially into the weekend and beyond,” Simpson added.
Bonds:
Markets remain in risk-off mode, seeking the safety of U.S. Treasurys ahead of Trump’s big tariffs announcement. Uncertainty is the keyword.
“It’s tough to lay out a tariff playbook for investors right now, so our advice is to wait and see,” LPL Financial economists said. The tariff announcement is expected in the afternoon. Before that, ADP is forecast to report an increase in private sector jobs last month to 120,000 from 77,000, according to a WSJ survey.
Energy:
Oil prices are in a comfortable range around $70 per barrel, but investors clearly aren’t at ease. The policy uncertainty is causing them to step back: It has “weighed on broad participation in the oil space,” said RBC Capital Markets strategist Brian Leisen.
Energy products are the U.S.’s biggest exports and among its biggest imports, putting them in the front lines of a potential trade war.
Metals:
“Buying activity by Chinese gold ETFs continues to pick up steam,” TD Securities’ Daniel Ghali said. Chinese gold ETFs have added 233,000 ounces of notional gold over the last week, he said.
Sentiment in China for the precious metal may have also been bolstered by Chinese life insurance companies’ membership being granted by the Shanghai Gold Exchange, which officially allows them to buy gold, Ghali said. “We see little scope for downside in gold,” he added.
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Iron ore rises amid positive demand. Demand seen at terminals continues to rebound, and demand for the ferrous metal in the manufacturing industry persists at a high level, China Galaxy Futures said.
However, analysts caution over the macro disruptions expected in April. Investors await Trump’s tariff announcements as well as China’s Politburo meeting in late April for more details about consumption-boosting policies.
TODAY’S TOP HEADLINES
Investors Bet Clarity on Tariffs Will Bring Stability to Markets
Stocks’ calm this week shows investors continue to bet that clarity on trade will bring stability to markets.
Major indexes have retreated since President Trump began hiking duties on the country’s largest trading partners, but not nearly as much as would be expected if investors thought that the economy was barreling toward a recession. As of Tuesday afternoon, the S&P 500 was down around 8% from its all-time high reached in February. But it has ticked up over the past two days, extending a rebound off its lows from a few weeks ago.
Wilbur Ross Has Thoughts on Trump’s Tariffs
Consumers, business owners, and even the stock market are worried President Donald Trump’s tariffs will cause a recession. Wilbur Ross, his former commerce secretary, disagrees.
The stock market has been surprised that Trump made tariffs his first order of business (they’d been hoping for tax cuts and deregulation). The potential impact on both growth and inflation is the likeliest reason the S&P 500 has dropped 9% from the record close reached in late February.
EU Competition Chief Goes to Washington, With Tech Rulings Looming
Europe’s top antitrust enforcer travels to Washington, D.C., to meet her U.S. counterparts this week, timing that throws the tension between them into sharp relief, with President Trump set to announce planned tariffs on Wednesday.
Teresa Ribera’s trip-which combines a gathering of antitrust lawyers with a meeting with Federal Trade Commission Chair Andrew N. Ferguson and top officials from Mexico and Canada-also comes as her department wraps up investigations into Apple and Meta under the Digital Markets Act, the European Union’s digital antitrust law.
EU Fines Car Makers $495.3 Million Over Vehicle-Recycling Cartel
The European Commission fined more than a dozen automakers and the trade group ACEA 458 million euros ($495.3 million) in an antitrust probe over their role in a end-of-life vehicle-recycling cartel.
The commission said Tuesday that 16 major car manufacturers and the ACEA entered into what the commission called anticompetitive agreements, which involved end-of-life vehicle recycling, for almost 15 years. It said these included agreements not to pay car dismantlers for processing and not to promote how much of an old vehicle can be recycled, recovered and reused.
Rio Tinto Braces for Investor Vote on Review of London Listing
First BHP Group ended its primary listing in London. Then Glencore said it is studying a move elsewhere. Now, Rio Tinto shareholders will decide whether to step up pressure on the mining giant to junk its decades-old dual listing in London and Sydney.
Thursday’s vote in London at Rio Tinto’s annual shareholder meeting will test support for a change that has been championed by Palliser Capital, an activist investor. Palliser argues the status quo drags on Rio Tinto’s value by restricting the miner’s ability to pursue stock-based deals and fully utilize its Australian tax credits, which the miner denies.
Trump to Review Preliminary TikTok Deal As Deadline Approaches
President Trump will be briefed Wednesday on the contours of a proposal to keep TikTok operational ahead of a pending U.S. deadline to sell or shut it down, according to people familiar with the matter.
Under the framework the president is expected to review, cloud computing company Oracle, along with several others, would join with existing U.S. investors to make an offer to TikTok-owner ByteDance, some of the people said. Blackstone is among the investors in talks to potentially participate in a deal, the people said.
Meta’s Head of AI Research to Resign Amid Computing Push
Meta Platforms’ head of artificial intelligence research is leaving the company in May, a senior departure from the unit overseeing research core to the social media giant’s future.
Joelle Pineau said Tuesday she will step down as Meta’s head of AI research, effective May 30, after overseeing the division for nearly eight years. The unit is home to Meta’s open-source large language model, called Llama, which powers Meta’s AI chatbot, and has worked on technologies from voice translation to image recognition.
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Expected Major Events for Wednesday
06:00/ROM: Feb PPI
07:00/TUR: Mar Turkey Manufacturing PMI
07:00/SPN: Mar Unemployment
08:30/UK: Mar Narrow money (Notes & Coin) and reserve balances
09:00/CYP: Feb Retail trade
10:00/IRL: Mar Monthly Unemployment
15:00/DEN: Mar Foreign Exchange & Liquidity
16:59/POL: Polish interest rate decision
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
04-02-25 0017ET
