Markets Turn Positive Late, a Day Ahead of Tariffs

Tuesday, April 1, 2025

Markets started off in the red today, and after some deep vacillations ended on an up-trend. Such goes the first calendar trading day of Q2. The Dow didn’t quite make it back to breakeven at the closing bell, -0.03%, while the S&P 500 and Nasdaq closed +0.38% and +0.87%, respectively. The small-cap Russell 2000 crossed the finish line +0.02% today.
 

Tariff Countdown: T-24 Hours

As of the closing bell Wednesday, we’ll get an important announcement from the White House: to what extent, and how deep, reciprocal tariffs with be levied on U.S. trading partners. Currently, analysts have been guided toward +25% tariffs on most goods coming from Canada, though “just” +10% on Canadian energy products. Also, +25% on all imported goods from Mexico appears to be in the cards, and +20% on Chinese imports.

Among the questions market participants still look for answers to include whether blanket tariffs like those cited above would bring, or whether custom carve-out rates for certain goods from certain countries and perhaps multi-tiered tariff rates will be the way forward. 

Senior counselor to President Trump on trade and manufacturing, Peter Navarro, claimed the U.S. tariff plan will bring in $600 billion per year over the next 10 years. This would suggest that tariffs are seen by the administration not as negotiating tools for trade, but a way to generate revenues over the long term, presumably to help fund the permanent tax cuts President Trump seeks.
 

Econ Data Wrap-Up: JOLTS, Manufacturing, Spending

The Job Openings and Labor Turnover Survey (JOLTS) for February came in a smidge light of expectations: 7.6 million from 7.7 million expected and reported in the prior month. Job openings are still somewhat prevalent, but -4.5 million from the record high +12.1 million reported back in March of ’22.

ISM Manufacturing, meanwhile, missed estimates and came in at +49.0% on its March report today — back below the +50.3% threshold this metric had attained the previous month. S&P final U.S, Manufacturing, on the other hand, swung above this threshold to 50.2 for March. Tariff procedures will directly impact input costs, so these numbers will be interesting to track over the next few months.

Construction Spending ballooned up in February, to +0.7% from 0.3% expected. The prior month was revised lower, from -0.2% originally to -0.5% in today’s report, for a +120 basis-point swing over the course of a month. Likely much of this increase was pulling forward materials ahead of the tariff realities.

Auto Sales for March also saw some pull-forward prior to tariffs being slapped on auto imports (Trump has said he wants +25% tariffs on these auto imports). General Motors GM cruised ahead +17% for the month, while Toyota TM was up +1%. Ford F still managed to slip -1.3% for the period.
 

What to Expect from the Stock Market Tomorrow: Tariffs, etc.

Private-sector payrolls from Automatic Data Processing ADP will be announced a little more than an hour from tomorrow’s open. Expectations are for an improvement to 120K jobs filled last month, up from the 77K reported for February. Keep in mind ADP data does not include levels of government hires, so the tens of thousands of jobs being cut at the federal government level are not in play for these figures.

After the opening bell, Factory Orders for February are expected to dwindle to +0.6% from +1.7% reported the previous month. Again, we may look for a whisper number a bit higher than this, for the same reason: to pull forward future business to be on this side of the pending tariff policy.

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