Daily market snapshot

Published April 10, 2025
 Woman on couch looking at laptop

Thursday, 04/10/2025 p.m.

  • Stocks pull back following historic rally yesterday – Equity markets closed lower today, as energy and technology stocks led to the downside. President Trump has announced a pause on the new tariffs for 90 days to allow for negotiations to potentially reduce tariffs and other trade barriers. Tariff rates for nearly all countries will move lower to 10%, except for China, for which they will rise to 145%.* Sectoral duties of 25% on steel, aluminum and autos remain in effect as well. In international markets, Asia rose sharply, led by Japan's Nikkei, which was up 9.1%. Europe was up 3% - 4% as well, as the European Union announced it will also pause its countermeasures to U.S. tariffs for 90 days.* Bond yields were up modestly, with the 10-year Treasury yield at 4.40%, but remain below yesterday's peak of 4.5%. The U.S. dollar declined against major international currencies. In commodity markets, WTI oil traded lower on demand concerns, as trade tensions between the U.S. and China remain high*.
     
  • CPI inflation falls more than expected – Consumer price index (CPI) inflation fell to 2.4% annualized in March, below forecasts calling for 2.6%*. The energy component was down 3.3%** from a year ago, as lower crude oil prices flow through to gasoline and other energy commodities. Core CPI, which excludes more-volatile food and energy prices, dropped to 2.8%, compared with estimates for 3.0%. Shelter inflation slowed to a 4.0% pace, down from 5.6% a year earlier, providing a key driver in moderating inflation.* These readings, though likely not meaningfully impacted by tariffs, indicate that inflation continues to moderate. We expect tariffs to put some upward pressure on inflation, as higher import costs are at least partially passed along to consumers. However, most of this impact should be near-term price hikes that aren't an ongoing driver of inflation, in our view. Bond markets are pricing in inflation of about 2.27% over the next 10 years, indicating that long-term inflation expectations remain well anchored.***
     
  • Jobless claims edge higher – Weekly jobless claims rose to 223,000 this past week, slightly below estimates calling for 225,000*. Jobless claims have averaged about 223,000 over the past four weeks, which is about in line with the average for 2024*. While federal government layoffs will likely drive jobless claims higher in the months ahead, we believe these readings, combined with other recent data, indicate that the labor market remains healthy. The unemployment rate is still low at 4.2%, and 7.6 million job openings exceed unemployment of 7.1 million. Wage gains should remain above inflation, providing positive real wages to support consumer spending and the economy, in our view.

Brian Therien, CFA
Investment Strategy

Source: *FactSet **U.S. Bureau of Labor Statistics ***Federal Reserve Bank of St. Louis

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