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Stocks Tiptoe Higher, but Tariff Tensions Loom
Stocks staged a modest bounce today — but, given the week’s initial bruising, it felt about as convincing as a magician’s rabbit emerging unharmed after two nights trapped under a steamroller.
After dipping its toes into correction waters, the S&P 500 found a reason for at least a partial smile: oversold conditions. With over 60% of constituents floundering beneath their 200-day averages, bottom-fishers and bargain hunters gave each other a knowing nod.
Level Change 3/12/25 (%)
– – – – – – – – – – – – – – –
-0.2 Dow
+1.2 Nasdaq
+1.1 Nasdaq 100
+0.5 S&P 500
-0.1 S&P 400
-0.5 S&P 600
What sparked the glimmer of optimism?
A milder inflation reading: February’s CPI came in cooler than expected, rising 0.2% month-over-month versus a 0.3% forecast, and down to 2.8% year-over-year. Core CPI behaved similarly, easing slightly but stubbornly clinging above 3%. Though modestly reassuring, the inflation ghost is still rattling chains through the corridors of the Fed. (For background, see this morning’s report.)
Par for the administration’s course, trade tensions flared anew. Trump’s metal tariffs — 25% on imported steel and aluminum — went into effect overnight, causing no shortage of angst from America’s former friends across the pond. The EU retaliated immediately with promised counterpunches aimed at $26B worth of American goods, while Canada parried with reciprocal tariffs on $20B. The White House has copper queued up next, according to Commerce Secretary Howard Lutnick, who declared these tariffs unstoppable.
Walmart executives were summoned by Beijing bureaucrats to explain their supposedly villainous attempts to pass tariff costs onto Chinese suppliers. The mandarins were not amused, calling such maneuvers “irresponsible” and hinting ominously about disrupted market order. These words sound less like diplomacy and more like a scene from an offer-you-can’t-refuse gangster flick. Such an approach is all the rage these days.
Finally, semiconductors and Tesla provided some relief from the gloom. Taiwan Semiconductor reportedly approached Nvidia, AMD, and Broadcom about a joint venture to revive beleaguered heavyweight Intel’s foundries, boosting chip stocks. Shares of Tesla surged nearly 8%, shrugging off Evercore’s dour forecast about slowing vehicle deliveries on the antics of the company’s voluble CEO.
Airlines found no such respite, battered yet again as travel demand weakens amid economic uncertainty. Shares of Delta Air Lines pushed the joystick forward, diving 3%, while United Airlines and American Airlines both spiraled nearly 5%.
Thus goes the market these days: bouncing a bit, stumbling quite a bit more, and waiting nervously for the next shoe — or tariff, or peace talk, or inflation print — to drop.
— Jason Kelly
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