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Stock Market Pops Higher as Investors Get Optimistic on Tariffs

Stock Market Pops Higher as Investors Get Optimistic on Tariffs

Published: by Omor IE

Key Points

  • The stock market climbed today as investors expect softer reciprocal tariffs on April 2.

  • PMI data comes in mixed as manufacturing falls but is offset by hotter services data.

  • The market is waiting for further clarity from the Fed.

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Most stock market indexes opened significantly higher today, even though the April 2 deadline has gotten closer. This is due to news that this round of U.S. tariffs will not be indiscriminate but will instead be targeted.

Moreover, the stock market has also recovered from a sharp correction earlier, and many are buying the dip before tariff fears possibly wane. This recovery could slow down as PMI data comes in. Plus, the Fed’s Raphael Bostic and Michael Barr are both expected to speak later today.

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

  • The S&P 500 is up 83.65 points, or 1.48%.
  • The Nasdaq Composite is up 332.4 points, or 1.86%.
  • Dow Jones Industrial Average is up 500.5 points, or 1.19%.

Investors More Optimistic Regarding Tariffs

Tariff-related fears have been the key factor behind the recent correction. The market could recover sharply without tariffs, as a trade war will likely slow down the market significantly and cause inflation. In turn, this could lead to stagflation as interest rates are still moderately high.

The market has ticked up regardless due to a recent Bloomberg report that suggests President Trump’s next tariff round may be more targeted and less aggressive than previously anticipated.

He previously said that he was unwavering, but that does not seem to be the case as reciprocal tariffs will go into effect for a narrower set of countries (e.g., the so-called “dirty 15” with unfavorable trade balances) and potentially sparing key sectors like autos and semiconductors. The administration hinted earlier that this was going to be a blanket tariff on all countries, so the market is breathing a sigh of relief.

The E.U. is also delaying its retaliatory tariffs until mid-April.

U.S. S&P Global Flash PMI

  • U.S. S&P Composite PMI Flash came in hotter than expected at 53.5. It was forecasted to be 50.9 and was 51.6 previously.
  • U.S. S&P Services PMI Flash also came in hot at 54.3 vs. 51 expected. It was at 51 previously.

The headline composite PMI signals an acceleration in economic growth. The services PMI had the largest gain this year due to stronger demand and better weather.

Flash Manufacturing PMI did slip to 49.8 from 52.7 in February as new orders slowed and employment fell. Manufacturing output index also fell to a 3-month low at 48.8 as fewer firms reported tariff-related pre-buying.

Input price inflation has accelerated sharply in manufacturing to almost a two-year high due to tariffs.

Other Assets

  • Gold has consolidated over $3,000 and is up slightly today.
  • Bitcoin is up 2.31% to over $88,000.
  • Natural gas and crude oil are both almost unchanged so far today.

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

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