Here is Schwab's early look at the markets for Thursday, March 27:
Stocks hope to rekindle some of Monday’s fire after Wednesday’s selloff. Stocks fell on Wednesday on the news that President Trump was set to announce new automotive tariffs after the market close.
St. Louis Fed President Alberto Musalem said that the Federal Reserve may wait on rate cuts because there’s a higher risk that inflation could stall above the Fed’s 2% target or even move higher. He noted that rising tariffs could add to inflation risks.
Tariffs continue to be a dark cloud over the markets, but the sky may clear up next week when the tariffs finally go into effect on April 2 because there should be clarity on who and what is getting targeted. “The White House has been sending mixed signals,” observed Michael Townsend, managing director of legislative and regulatory affairs with Schwab, “first saying that they would be imposed on all countries, then more recently saying they will initially focus on 10-15 countries with which the US has big trade deficits. The plan also was to announce tariffs on automobiles, pharmaceuticals and semiconductors next week, but those reportedly will be delayed. The uncertainty is driving companies and investors crazy.”
“Optimism over increased stimulus is likely to support more gains for European stocks even as declines in companies with a high share of US sales leaves them on course for a monthly decline,” said Jeffrey Kleintop, Chief Global Investment Strategist at the Schwab Center for Financial Research. The Stoxx 600 has outperformed the S&P 500, despite underperforming luxury and autos groups. Earnings downgrades on autos are unlikely to reverse until there’s more clarity on US import tariffs—it isn’t just Europe, automakers are also the worst performing industry group in the S&P 500 this year. “The prospect of German stimulus can return as a key driver in the longer term,” continued Kleintop, “especially as economic data continue to show improvement.”
Bitcoin futures (/BTC) topped out around the first of the year and fell more than 26% by March 10. Recently, BTC has moved upward creating what many technical analysts would call a rising wedge. The rising wedge price pattern is usually considered to be bearish. If the pattern plays out, the downtrend in Bitcoin could continue.
The SPX fell 64.45 points (-1.12%) to 5,712.20; The Dow Jones Industrial Average® ($DJI) tumbled 132.71 points (-0.31%) to 42,454.79; Finally, the Nasdaq Composite® ($COMP) dropped 372.84 points (-2.04%) to 17,899.01.
