Wall Street kicked off the second quarter with a cautious rebound, navigating choppy intraday swings as traders awaited a pivotal trade policy announcement from the White House. The S&P 500 finished modestly higher, lifted by gains in consumer discretionary stocks, even as weak job and manufacturing data stirred fresh concerns about the economy’s trajectory. Volatility remained elevated as investors reacted to mixed signals and the looming threat of broad-based tariffs. With markets still digesting last quarter’s declines, expectations are building around Wednesday’s expected tariff rollout.

Key Takeaways:

  • S&P 500 Rises Despite Wild Swings: The S&P 500 climbed 0.38% to close at 5,633.07, shaking off early losses in a session marked by sharp volatility. The index traded in nearly a 2% range intraday. Consumer discretionary stocks led gains, with Tesla up 3.6% and Nike adding 2%, helping lift sentiment.
  • Dow Finishes Flat Amid Market Caution: The Dow Jones Industrial Average dipped 11.80 points, or 0.03%, to settle at 41,989.96 as traders held back ahead of the White House’s expected tariff announcement. With the index down 1.3% for the first quarter, investors appear wary of broad-based levies that could disrupt trade flows and corporate profits.
  • Nasdaq Outperforms on Tech Recovery: The Nasdaq Composite advanced 0.87% to 17,449.89, rebounding from recent lows thanks to renewed strength in technology and growth stocks. The index has been under pressure after a 10% quarterly drop but found support as traders sought out beaten-down names ahead of the tariff policy decision.
  • Economic Data Points to Slowing Momentum: US Job openings fell more than expected in February, declining to 7.57 million, while the ISM manufacturing index dipped to 49, signalling contraction. More concerning, the survey’s prices-paid index surged to 69.4, its highest since mid-2022, suggesting inflationary pressures remain. These data points added to fears that the economy is cooling while cost pressures persist, increasing market sensitivity to policy shifts.
  • European Markets Rally as Inflation Cools and Tariff Fears Loom: European equities rallied broadly on Tuesday, with the pan-European Stoxx 600 rising 1.07% as traders shrugged off tariff fears for the moment and focused on easing inflation. Germany’s DAX surged 1.70%, Italy’s FTSE MIB gained 1.33%, and France’s CAC 40 jumped 1.1%, ending a four-session losing streak. The UK’s FTSE 100 climbed 0.61% as energy and financial stocks led gains. Fresh Eurostat data showed annual euro zone inflation eased to 2.2% in March from 2.3% in February. Lower inflation prints from Germany, Spain, and France added to speculation that the ECB may pause or delay further hikes. 
  • Asia-Pacific Markets Rebound as Central Banks and Data Offer Reprieve: Asian markets recovered sharply on Tuesday following Monday’s steep losses, lifted by central bank policy steadiness and upbeat data from China. South Korea’s Kospi led gains with a 1.62% advance, while the small-cap Kosdaq surged 2.76%. Australia’s ASX 200 rose 1.04% after the Reserve Bank of Australia held rates at 4.1%, aligning with expectations and reducing policy uncertainty ahead of the May 3 elections. In China, the Caixin PMI ticked up to 51.2 for March, slightly above estimates and signalling modest manufacturing expansion. Hong Kong’s Hang Seng Index rose 0.38%, while Japan’s Nikkei 225 finished flat after paring early gains. India diverged from the region, with the Nifty 50 and Sensex falling sharply by 1.59% and 1.84%, respectively.
  • Oil Pulls Back from Multi-Week Highs on Tariff Risk: Crude prices slipped after Monday’s rally, as traders weighed the risk that imminent US tariffs could dampen global demand. Brent fell 0.5% to $74.38 a barrel, while WTI declined to $71.10. Still, tensions over Russian energy and potential strikes on Iranian infrastructure kept losses limited. OPEC+ is set to meet Friday, with expectations for a modest production increase in May.
  • Treasury Yields Fall on Growth Concerns and Policy Uncertainty: The 10-year Treasury yield dropped 7.8 basis points to 4.167%, while the 2-year yield fell 4.1 basis points to 3.871%, as investors reacted to weak economic data and braced for Wednesday’s trade announcement. The disappointing job openings report and contractionary ISM manufacturing print fuelled fears that economic momentum may be faltering. 

FX Today:

  • EUR/USD Struggles Near Resistance Amid Slowing Momentum: The euro slipped 0.27% to 1.0786, failing to sustain its rebound after multiple rejections near the 1.0850–1.0900 zone. While the pair continues to hold above its 200-day SMA at 1.0730, upward momentum is fading without a firm catalyst. A close above 1.0900 would be needed to extend the rally toward 1.1000, while a drop below 1.0730 could expose the 1.0650–1.0700 support band. Euro zone inflation eased in March, offering limited support for the single currency as the ECB remains cautious on future tightening.
  • GBP/USD Consolidates Below 1.3000 After March Rally: Sterling settled nearly flat at 1.2914, pausing after a strong climb from 1.2300 in early March. The pair remains above key moving averages, including the 200-day at 1.2808, but momentum has stalled below the 1.3000 barrier. The 50-day SMA is now trending higher, supporting the bullish structure, yet a daily close above 1.3000 is required to unlock further gains toward 1.3100–1.3200. Failure to hold above 1.2800 could signal a reversal toward 1.2700, making the current range a key battleground for direction.
  • AUD/USD Attempts Recovery but Faces Overhead Resistance: The Australian dollar rose 0.43% to 0.6274, continuing its attempt to recover from recent lows near 0.6200. Despite the bounce, the pair remains in a broader downtrend, trading below all major SMAs — with the 100-day currently acting as strong resistance at 0.6321. The RBA’s decision to hold interest rates at 4.1% provided some support, but risk sentiment remains fragile. A break above 0.6330 would be needed to challenge the bearish narrative, while downside support lies near 0.6200, followed by the February low at 0.6100.
  • USD/CAD Holds Firm Above Key Support After Pullback: The US dollar declined 0.49% to 1.4315 but maintained its footing above the 100-day SMA at 1.4272. The pair remains in a long-term uptrend, consolidating between 1.4200 and 1.4450 since February. With the 50-day and 200-day SMAs also sloping upward, the technical bias remains bullish as long as 1.4270 holds. A breakout above 1.4450 could resume the prior rally and target 1.4600, while a break below current support may open the door to a deeper correction toward 1.4200 or lower.
  • USD/JPY Retreats as Bulls Fail at Major Moving Averages: The dollar fell 0.23% to 149.61 against the yen, reversing after a failed attempt to break above the 100-day SMA at 152.93. The pair has struggled to clear resistance near a tightly packed cluster of major moving averages, suggesting upside exhaustion. A continued failure to reclaim 150.50 could lead to a test of 148.00, with further downside risk toward 146.50. Only a clean breakout above 152.00 would restore bullish momentum, but for now, the pair remains locked in a technical stalemate with a bearish tilt.
  • Gold Pulls Back but Remains Above Key Support Zone: Gold declined 0.20% to $3,116.72 after reaching a session high of $3,149.03, with traders locking in profits ahead of Trump’s tariff rollout. The metal remains in a firm uptrend, supported by higher lows and rising SMAs, including the 50-day at $2,917.69. Key support is now seen near the $3,100–$3,080 zone, while a breakout above $3,150 could trigger a new leg higher toward $3,200. Investors continue to favour gold as a hedge against trade uncertainty and economic weakness, keeping the broader bias firmly positive.

Market Movers:

  • Johnson & Johnson Drops After Talc Ruling: Shares fell 8% following a US judge’s rejection of the company’s proposed $10 billion talc lawsuit settlement. The judge cited lack of sufficient support from affected plaintiffs.
  • Roblox Pops on Google Ad Partnership: Shares of Roblox jumped 5% after announcing a new collaboration with Google to expand immersive advertising. The deal includes rewarded video ads that grant in-game benefits, giving brands new tools to reach users through Google’s ad platform.
  • PVH Surges on Strong Earnings Beat: PVH shares soared 18% after the apparel group behind Calvin Klein and Tommy Hilfiger beat both earnings and revenue forecasts. The company posted adjusted EPS of $3.27 on $2.37 billion in revenue, topping analyst estimates across the board.
  • Progress Software Rallies on Forecast Raise: The stock rose 12% after the firm posted adjusted Q1 earnings of $1.31 per share, beating estimates of $1.06. Revenue also exceeded forecasts, and Progress issued full-year guidance above consensus.
  • Newsmax Skyrockets on Second Trading Day: Shares soared another 179% after Monday’s 700% surge on its NYSE debut. The conservative media outlet’s stock closed at $83.51 after opening at $14, driven by high retail interest.

Tuesday’s gains masked an undercurrent of market tension, as investors balanced weak US data against anticipation of sweeping new trade measures from the Trump administration. Treasury yields declined and oil prices pulled back, reflecting rising caution ahead of Wednesday’s tariff rollout. Meanwhile, European markets rallied on signs of easing inflation, with euro zone CPI dipping to 2.2%, a development that may influence the ECB’s next steps. As traders brace for fresh policy moves on both sides of the Atlantic, sentiment remains fragile and direction uncertain.