Lingering Fears Have Wall Street on Edge Today. Here’s What the Fed Says

The stock market opened slightly higher today, but this is a cool-off from yesterday’s rally. Most big-cap stocks popped yesterday, and Tesla (NASDAQ: TSLA) went on to have one of its best days. That stock opened down sharply, and the rest of the market is also turning red after yesterday’s tariff-related recovery.

President Donald Trump said twice that his reciprocal tariffs would have exceptions and wouldn’t be blanket tariffs. This news of “softer” tariffs was priced yesterday, and the rally seems to be short-lived. Right now, investors are waiting for important macro data to come in before they make their next moves.

Here’s a market update as of 10:00 A.M (ET) today.

• The S&P 500 is up 5.74 points, or 0.1%.
• The Nasdaq Composite is up 41.5 points, or 0.22%.
• Dow Jones Industrial Average is down 21.75 points, or 0.05%.

Comments From the Federal Reserve Yesterday

Members of the Federal Reserve went on air yesterday and commented on the economy. In short, inflation concerns seem to be returning and the Fed itself seems to be in limbo on where it should move next. It is likely awaiting more data before it cuts more, and many now say that only one interest rate cut will take place this year.

Here’s what Fed’s Kugler said:

• “Progress on bringing inflation to target has slowed since last summer.”
• “Return of positive goods inflation is ‘unhelpful’ as it had helped keep a lid on total inflation and inflation expectations.”
• “We are paying close attention to acceleration of price increases and higher inflation expectations.”
• “Surveys show consumers expecting further [price] increases in the near term, with uncertainty tied to trade policy.”
• “Labor market appears to be stable through February; [the] unemployment rate is low.”
• “Latest economic data for early this year have shown some signs of softness.”

As for the one rate cut this year, that’s what Atlanta Fed’s Bostic sees. This isn’t good news as it contrasts with previous expectations of two rate cuts of 250bps this year. If rate cuts don’t happen as fast, this likely means bond yields stay higher, and so does lingering pain for stocks.

Tariff Update

Tariffs started slipping out of the headlines as the market priced in the bearishness, but positive news about the administration not being as aggressive with tariffs triggered a rally yesterday. More eyes are now on tariff-related news due to the April 2 deadline approaching closer.

Trump is now considering a two-step tariff regime on April 2nd and is looking into a tool to apply up to 50% tariffs on partners. Some countries seem to be open to a deal. India is open to tariff cuts to zero from a range of 5-30% on 55% of the U.S. imports, and this country is widely considered to be one of the most consequential in the “Dirty 15” group of countries.

Important Macro Data Today

Housing market data came in soft across the broad.

• U.S. CB Consumer Confidence data came in soft at 92.9. It was forecasted to be 94, and it was previously at 98.
• New home sales in the U.S. also came in slightly soft at 0.676 million, vs the 0.68 million forecast. Previously, this was at 0.657, so it grew month-over-month, though a bit slower than Wall Street would have liked.
• S&P CoreLogic Case-Shiller 20-City Composite Home Price NSA Index came in at 4.67% for January. This data tracks the value of single-family housing, which came in lower than the forecast of 4.8%. Again, this still grew since it was previously at 4.5%, but the pace of growth is much slower.
• U.S. new home sales change was at just 1.8% month-over-month vs. the 3.5% forecast.
• The house price index also missed and came in at 0.2% month-over-month vs. the 0.3% forecast.
• U.S. Redbook (sales-weighted of year-over-year same-store sales growth) came in at 5.6%, up from 5.2%.

Other Assets

• Gold: Higher today by 0.64%.
• Crude Oil: Also higher, albeit slightly.
• Natural Gas: Almost unch.
• Copper Futures: Up significantly, by 1.9%. It rose due to tariffs.

The image featured at the top of this post is ©Chaay_Tee / iStock via Getty Images.