Here is Schwab's early look at the markets for Tuesday, April 1:
Fresh job openings data later this morning kick off a week packed with reports focused on employment. . All this week's data will be closely watched for any signs of splintering in what's been a solid climate for job seekers, as recent business and consumer confidence measures raised questions whether companies can continue hiring.
Turning to tariffs, hopes built that tomorrow's "Liberation Day" tariff announcement by the White House could provide some relief on Wall Street, but there hasn't been much evidence lately of investors stepping in to buy dips.
Instead, the market continues to grind slowly lower, with U.S. stocks posting their worst quarter versus the rest of the world's indexes since the 1980's. The broader market trades just above levels that would signal a formal "correction," or a 10% drop from recent highs. While yesterday featured a minor rebound for the S&P 500 index, tech stocks kept pressure on the Nasdaq Composite most of the session, with Amazon (AMZN), Nvidia (NVDA), and Tesla (TSLA) all finishing down more than 1%.
Tomorrow is when the scale of President Trump's tariff plans is likely to be unveiled, though the twists and turns aren't likely to end with that. The announcement isn't necessarily the same as implementation, which could be delayed by legal proceedings and possible challenges by the World Trade Organization (WTO). Still, tomorrow's Rose Garden event could provide a clearer sense of the tariff picture, and a sense of how U.S. trade partners react. Generally, markets appreciate certainty, which is why waiting for news can sometimes be the toughest part.
Historically, trade wars haven't helped the U.S. economy. The latest Atlanta Fed GDPNow model for first quarter gross domestic product (GDP) growth is -2.8%. There will still be updates to that, and the first official government estimate is due later this month. Most analysts still expect positive first quarter GDP, but at lower levels than last year. Growth was 2.3% in the fourth quarter.
The Job Openings and Labor Turnover Survey (JOLTS) for February is due at 10 a.m. ET, while manufacturing numbers from today's ISM Manufacturing PMI due at the same time will also be closely watched. Recent "soft" data like confidence and sentiment hasn't been matched yet by any signs of cracks in the jobs market, as jobless claims have remained in their long-term range at relatively low levels. If that changes, it could mean another leg up for the Treasury market and weakness in equities. Goldman Sachs (GS) raised its U.S. recession risk substantially over the weekend.
Analysts expect JOLTS of 7.68 million, roughly unchanged from 7.74 million in January and still a healthy figure. A big drop in openings or the quit rate, or both, might indicate tariff issues starting to become more deeply rooted in the jobs market, but remember this is from February when there was less uncertainty. Also, weekly jobless claims data haven't indicated many cracks yet in the jobs market. Remember to also check the JOLTS "quit" rate, which can help shed light on how easy or difficult it is to get a new job for those leaving current positions.
For ISM Manufacturing, the average analyst estimate is 49.8, down from 50.3 in February. Any number below 50 indicates contraction. ISM manufacturing spent many months in contraction last year before clawing back into positive territory earlier this year. ISM Services data, which includes a much broader sector of the economy, is due Thursday. Both these reports could be stronger than expected as businesses "front run" their activity to get ahead of the April 2 tariff announcement.
On Monday, major indexes bounced back late in what appeared to reflect end-of-quarter trading where some investors cashed out of short positions following a very difficult month and quarter for the market. News was thin, which made other explanations for the rebound difficult to find. Defensive sectors continued to lead, though volatility and Treasury prices fell from early levels that reflected "risk-off" trading. Info tech continued its struggles.
The Monday afternoon gains followed a morning plunge to the lowest levels for major indexes since early September. tariff-related selling spilled over from Friday. The S&P 500 index, at its low for the day, traded below 5,500, back in correction territory down more than 10% from its February 19 all-time peak.
The Nasdaq Composite ($COMP) was in correction territory already heading into the day and trades at lows last seen in early September. The weakness followed Friday's 2% losses and news reports that President Trump wants to impose a 20% universal tariff on imports from all countries.
As of late Monday, there was only a 16% chance of rates being lowered at the May FOMC meeting, according to the CME FedWatch tool. That rises to 75% for June. Both of those percentages were down from Monday morning. There's concern that if tariffs cause inflation, it could tie the Fed's hands even as the economy slows due to those same tariffs. Several Fed governors and vice chairs speak over the next few days, culminating with remarks by Fed Chairman Jerome Powell on Friday.
The S&P 500 fell 5% in the first quarter, while the Nasdaq Composite dropped more than 10%. That broke a five-quarter winning streak for the S&P 500. The weakness in major indexes doesn't only reflect tariff and economic growth concerns. Average S&P 500 earnings growth estimates for 2025 have been edging lower for weeks.
The SPX added 30.91 points (0.55%) to; 5,611.85; The Dow Jones Industrial Average® ($DJI) climbed 417.86 points (+1.00%) to 42,001.76; the Nasdaq Composite® ($COMP) fell 23.70 points (-0.14%) to 17,299.29.
