"You are always a student, never a master. You have to keep moving forward." - Conrad Hall
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SUMMARY
· Equity markets closed higher in the U.S. on Tuesday.
· The S&P 500 logged its 6th straight day of positive returns.
· Lower tariff promises were made for U.S. auto makers.
· Job openings, which serve as a gauge for labor demand, were lower than expected.
· Yields fell lower. The 2-year Treasury yield fell 3.66% and the 10-year yield declined to 4.17%.
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De-escalating Trade Tensions are Paying Off
U.S. equity markets closed mostly higher on Monday, with stocks coming off a strong prior week that saw the S&P 500 gain 4.6% and the Nasdaq rise by 6.7%.
A rally since April 8th has left investors encouraged that the markets' woes may finally be over. The S&P 500 posted its sixth consecutive daily gain on Tuesday and has now rallied by roughly 12% from the April 8 year-to-date low. The S&P is now about 9% off the February 19 all-time after what was once the worst April since 1932.
Reports have surfaced that the U.S. may lower tariffs on China as well as negotiate with major trading partners. Automakers were also promised a relief on tariffs by the Trump administration while exempting them from existing steel and aluminum tariffs.
Trump signed an Executive Order paring back key parts of tariffs affecting automakers, and Commerce Secretary Howard Lutnick said that a trade deal with an unnamed country was "done, done, done, done."
Corporate earnings have also been solid so far for Q1. The S&P 500 earnings is on pace to grow 9.7% YOY.
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In the Spotlight: Consumer Confidence and Job Openings
Economic data poured in this week starting with the release of the JOLTS job openings for March as well as a read on consumer confidence for April.
US JOLTS job openings fell to 7.19 million in March vs. 7.5 million expected.
The number of job openings on the last business day of March stood at 7.19 million, the US Bureau of Labor Statistics (BLS) reported in the Job Openings and Labor Turnover Survey (JOLTS) on Tuesday. This reading followed 7.48 million openings (revised from 7.56 million) reported in February and came in below the market expectation of 7.5 million.
"Over the month, hires held at 5.4 million, and total separations changed little at 5.1 million," the BLS noted in its press release. "Within separations, quits (3.3 million) were unchanged and layoffs and discharges (1.6 million) edged down."
Investors can now anticipate the April employment report on Friday.
Consumer confidence for April was also lower than expected, falling to 86 versus expectations for a reading of 88.
In April 2025, consumer confidence plummeted, hitting its lowest level since the onset of the COVID-19 pandemic in 2020. The Conference Board Consumer Confidence Index® fell to 86.0, a drop of 7.9 points from the previous month. This marked the fifth consecutive month of declines and was below forecasts of 88. The decline was driven by negative sentiment about future income prospects, particularly among middle-income families, and concerns about the economy.
Key factors contributing to the decline:
Negative Income Prospects: Consumers' expectations about their future income turned negative for the first time in five years, indicating growing concerns about their personal financial situations.
Worry about the Economy: Consumers expressed anxieties about the overall economic outlook, including concerns about jobs, inflation, and potential recessions.
Tariff Fears: Uncertainty around trade policy, particularly tariffs, weighed heavily on consumer sentiment, with mentions of tariffs reaching an all-time high in survey responses.
Inflation Expectations: Average 12-month inflation expectations reached 7% in April, the highest level since November 2022.
Financial market volatility: High financial market volatility also contributed to a more pessimistic outlook on the stock market.
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Shipping News
Global logistics company Flexport reported late last week that tariffs have already had a "significant negative impact on shipping volumes from China to North America, with 50% cancellations."
The U.S. economy could take a $2 trillion hit if the current U.S. tariffs on China are maintained, according to the chief of tech-focused logistics firm Flexport.
In a series of posts on X, CEO Ryan Petersen warned tens of thousands of American businesses could fail, and millions of people could be laid off due to President Donald Trump's trade war with China.
Petersen noted that Chinese imports to the U.S. are about $400 billion, and those goods sell at retail for nearly $2 trillion.
"In the three weeks since the tariffs took effect, ocean container bookings from China to the United States are down over 60% industry-wide," Petersen said.
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Earnings Highlights
Coffee shop franchise Starbucks dropped as much as 6.7% in extended trading on Tuesday as the Q2 earnings report disappointed Wall Street.
Shares in server giant Super Micro Computer plummeted 15% in after-hours trading when the company released disappointing preliminary third quarter results, citing delayed customer platform decisions moving sales into the fourth quarter.
Seagate Technology stock jumped over 8.9% after the data storage provider released positive guidance for Q4, pointing towards revenue of $2.40 billion and adjusted earnings of $2.40 per share.
Tuesday Markets Snapshot
| Index | Tuesday Close | Point Change | Percentage Change |
| S&P 500 | 5,560.83 | +32.08 | +0.58% |
| Dow Jones Industrial Average | 40,527.62 | +300.03 | +0.75% |
| Nasdaq | 17,461.32 | +95.19 | +0.55% |
On the Move
- General Motors (GM) fell 2.3% as the company pulled its 2025 guidance due to the uncertain tariff outlook.
- Coca-Cola (KO) climbed 1% early today as quarterly revenue slipped slightly less year-over-year than analyst had expected.
- Foot Locker (FL) flattened in pre-market trading after rising more than 10% yesterday despite a lack of fresh news.
- UPS (UPS) jumped 1.6% in pre-market trading after the package firm beat earnings expectations and said it intends to cut 20,000 jobs this year and shut more than 70 facilities, Barron's reported. The company also withdrew guidance due to what it called the "current macro-economic uncertainty."
- Pfizer (PFE) moved a little higher after quarterly earnings beat expectations and the company reaffirmed guidance.
- Spotify (SPOT) dropped 5.8% in early trading as it expects active monthly users this quarter of 689 million, less than the 694 million analysts had expected, according to Bloomberg.
- Honeywell (HON) jumped nearly 4% today after beating analysts' earnings expectations and raising its full-year EPS guidance.
- Hims & Hers Health (HIMS) jumped 36% ahead of the open after announcing a partnership with Novo Nordisk (NVO) to sell weight-loss drug Wegovy on its platform, Reuters reported.
- Royal Caribbean climbed 5.4% after raising guidance on strong cruise demand.
What Else to Watch This Week
On Wednesday, Wall Street's attention will turn to earnings from two major tech giants. Microsoft will be reporting its earnings after-the-bell while Meta will report on its earnings and how tariffs could impact the business.
The release of US gross domestic product (GDP) for the first quarter will indicate where the economy stood prior to Trump's historic tariff hike.
A new reading of the Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, will similarly provide a snapshot as to where prices stood before the current trade war broke out.
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