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The S&P 500 Index ($SPX) (SPY) today is up +0.14%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.20%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.07%.  June E-mini S&P futures (ESM25) are up +0.11%, and June E-mini Nasdaq futures (NQM25) are up +0.04%. 

Stock indexes today recovered from early losses and are slightly higher as better-than-expected US economic news sparked short covering in equities.  The US labor market showed hiring picked up last month after the Mar ADP employment change rose +155,000, stronger than expectations of +120,000.  Also, Feb factory orders rose +0.6% m/m, stronger than expectations of +0.5% m/m.

Stocks today initially opened lower as the markets await President Trump's tariffs announcement.   President Trump will announce the details of the reciprocal tariffs late today after the markets close at 4 pm EST, and they will take immediate effect, according to a White House spokesperson.  Several proposals are said to be under consideration, including a tired tariff system with a set of flat rates for countries, as well as a more customized reciprocal plan.

US MBA mortgage applications fell -1.6% in the week ended March 28, with the purchase mortgage sub-index up +1.5% and the refinancing mortgage sub-index down -5.6%.  The average 30-year fixed rate mortgage fell -1 bp to 6.70% from 6.71% in the prior week.

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%.  On March 8, Mr. Trump reiterated that he would impose reciprocal tariffs and additional sector-specific tariffs on foreign nations on April 2.  Last Wednesday, President Trump signed a proclamation to implement a 25% tariff on US auto imports, effective April 3.  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.

Market attention this week will include Thursday's March ISM services index (expected to fall -0.5 to 53.0), and on Friday, March nonfarm payrolls are expected to increase by +138,000, and the March unemployment rate is expected unchanged at 4.1%.  Also, March average hourly earnings are expected +0.3% m/m and +4.0% y/y, unchanged from February.  Finally, on Friday, Fed Chair Powell is scheduled to speak to the Society for Advancing Business Editing and Writing Conference on the economic outlook.

The markets are discounting the chances at 16% for a -25 bp rate cut after the May 6-7 FOMC meeting.

Overseas stock markets today are mixed.  The Euro Stoxx 50 is down -0.95%.  China's Shanghai Composite Index closed up +0.05%.  Japan's Nikkei Stock 225 recovered from a 6-1/2 month low and closed up +0.28%.

Interest Rates

June 10-year T-notes (ZNM25) today is up +2 ticks.  The 10-year T-note yield is down -1.2 bp to 4.157%.  June T-notes today rallied to a 4-week high, and the 10-year T-note yield dropped to a new 4-week low of 4.108%.   T-notes are rallying on the idea that US tariffs might drive the economy into recession, prompting the Fed to continue cutting interest rates.  Falling inflation expectations are also bullish for T-notes after the 10-year breakeven inflation rate today fell to a 1-1/2 week low of 2.321%.  T-notes fell back from their best levels after the US Mar ADP employment change, and Feb factory orders rose more than expected, a hawkish factor for Fed policy.  Also, today's stock recovery curbed safe-haven demand for T-notes.

European bond yields today are mixed.  The 10-year German bund yield rebounded from a fall to a 4-week low of 2.654% and is up +1.8 bp to 2.705%.  The 10-year UK gilt yield fell to a 1-1/2 week low of 4.591% and is down -0.2 bp to 4.632%.

ECB Governing Council member Holzmann said he's against an ECB interest rate cut at this month's policy meeting, "as we are neutral and inflation is converging to target, there is no reason to become accommodative."

Swaps are discounting the chances at 77% for a -25 bp rate cut by the ECB at the April 17 policy meeting.

US Stock Movers

DoorDash (DASH) is up more than +3% to lead gainers in the Nasdaq 100 after Domino's Pizza said it will begin accepting orders through the company.

Caesars Entertainment (CZR) is up more than +3% to lead gainers in the S&P 500 after Raymond James added the stock to its "Favorite" list.

Rocket Cos (RKT) is up more than +13% after Deutsche Bank upgraded the stock to buy from hold with a price target of $16.

GE Vernova (GEV) is up more than +2% after Susquehanna Financial initiated coverage on the stock with a positive rating and a price target of $370.  

Citizens Financial Group (CFG) is up more than +1% after Autonomous initiated coverage on the stock with a recommendation of outperform and a price target of $50.

Fiserv (FI) is up more than +1% after Goldman Sachs upgraded the stock to buy from neutral with a price target of $260.

Chip makers are under pressure today and are weighing on the broader market.  Micron Technology (MU), ON Semiconductor (ON), and Microchip Technology (MCHP) are down more than -1%.  Also, Texas Instruments (TXN), Lam Research (LRCX), Intel (INTC), Analog Devices (ADI), and Qualcomm (QCOM) are down more than -0.60%. 

nCino (NCNO) is down more than -25% after reporting Q4 adjusted EPS of 12 cents, weaker than the consensus of 17 cents, and forecast 2026 adjusted EPS of 66 cents to 69 cents, well below the consensus of 86 cents. 

Deere & Co (DE) is down more than -1% after Jeffries said Deere's second-half outlook is clouded by US trade policy and counter-tariffs on US exports to Europe would affect the company.

Earnings Reports (4/2/2025)

AngioDynamics Inc (ANGO), Franklin Covey Co (FC), Penguin Solutions Inc (PENG), Resources Connection Inc (RGP), RH (RH), UniFirst Corp/MA (UNF).