Markets Mellow as Talks About Trade Talks Commence

Monday, April 7, 2025

Despite a wildly volatile opening for today’s trading session — where we saw a 2500-point move from negative to positive on the Dow in the first hour of trading — we had a relatively tame session, especially compared to the hair-on-fire selloff in the latter part of last week. The Dow shed another -349 points, -0.91% and the S&P 500 was -11 points, -0.23%. The Nasdaq narrowly closed in the green: +15 points, +0.10%, while the small-cap Russell finished -16 points, -0.92%.

Market participants began to see some dialogue on the tariff beat, with certain countries willing to state publicly they are ready to negotiate trade levels with the U.S. But for President Trump’s part, he expressed no willingness to bring down his tariff policy — in fact, he threatened China with another +50% tariff if they do not take off their retaliatory +34% tariff announced late last week. 

Meanwhile, Goldman Sachs’ GS note earlier today was called “Countdown to Recession” — with a base case scenario of a U.S. recession as long as tariff policies remain intact. BlackRock BLK CEO Larry Fink struck a more bullish tone this morning, suggesting it might be a good time to look for buying opportunities. That said, he told investors to prepare for the Fed perhaps not cutting interest rates at all this year, and that many of his contemporaries believe we are already in a re cession right now.

Basically, if tariffs lead to higher unit prices and trade destabilization leads to shuttering companies and plants, which brings unemployment levels out of healthy-labor-market territory they’ve been in for the past several years, this could lead to “stagflation,” which is in some ways the worst of both worlds. Bond yields rose roughly 20 basis points (bps) through the course of the day, with the 10-year now back above +4.2% and the 2-year around +3.92%.

What to Expect from the Market Tomorrow

Early Tuesday morning, a new NFIB optimism index for March comes out. Essentially, we’re still looking backwards at this data, but the prior month spent its fourth-straight month above 100 (100.7), even though each of the last two months was subsequently lower that the prior month. Even if this survey does dip below 100, we don’t expect it to reach October’s low 93.7 — that’s more likely an April ’25 number.

Q1 earnings season isn’t really recognized as putting out Q1 data until Delta DAL reports Wednesday and the big Wall Street banks like JPMorgan JPM release numbers Friday morning, but tomorrow CalMaine Foods CALM — a major supplier of shell eggs — reports results after the closing bell. Currently, CalMaine is a Zacks Rank #1 (Strong Buy) and was names today’s Bull of the Day.

Check out the updated Zacks Earnings Calendar here.

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