| Name | Daily Close | Daily Change | Daily Change (%) |
|---|---|---|---|
| Dow | 42,677.24 | -114.83 | -0.27% |
| S&P 500 | 5,940.46 | -23.14 | -0.39% |
| Nasdaq | 19,142.71 | -72.75 | -0.38% |
| VIX | 18.09 | -0.05 | -0.28% |
| Gold | 3,294.30 | 9.7 | 0.30% |
| Oil | 62.62 | -0.07 | -0.11% |
US MARKET
Wall Street’s rally took a breather on Tuesday, with stocks falling as traders awaited fresh catalysts after a six-day run that put the S&P 500 up almost 20% from its April lows. The US equity benchmark lost steam following an $8.6 trillion surge to around “overbought” levels. Big tech weighed on trading, with Alphabet Inc. down about 1.5% during the company’s developer conference. Tesla Inc. was the only megacap gaining as Elon Musk said he’s committed to leading the electric-vehicle giant five years from now. The S&P 500 fell 0.5%. The Nasdaq 100 slid 0.6%. The Dow Jones Industrial Average lost 0.4%.
A common view amongst Wall Street commentators is that there is little question that the momentum in the equity market is quite strong. That said, the market is getting overbought near-term, so it could see a breather at any time. However, unless that breather turns out to be a serious reversal, a retest of those all-time highs soon is very possible. But the fact remains that risks such as tariff uncertainty, softening economic data and fiscal headwinds challenge the sustainability of the recent equity rebound.
In Yesterday’s post, we noted how the recent rally has been overwhelmingly driven by retail investors. As we know, Trump’s tariffs announcement on April 2 devastated financial assets, wiping out some $6 trillion in market value from US stocks in just two trading days. Wall Street’s “smart money” — hedge funds and other professional investors — dumped equities, and strategists urged clients to flee. But the so-called dumb money, embodied by retail traders, didn’t see things that way. To them, the stock market was suddenly on sale, meaning it was time to buy, not hide. And it turns out they were right, as Trump reversed himself a week later and paused most of his levies on April 9, sending the S&P 500 Index soaring 18% since then. Retail investors bought stocks at a record pace during the market downturn, earning a roughly 15% return since April 8, and plowing a net $50 billion into US stocks.
Corporations across the US, Europe, and China are pulling their forecasts for the year or providing grim outlooks, citing rising costs, weak consumer sentiment, and a lack of business confidence due to President Donald Trump’s worldwide trade offensive. One thing is clear as the first-quarter earnings season draws to a close: The uncertain outlook for the global economy is superseding better-than-feared results even as stocks rally on signs of easing trade tensions. Corporations across the US, Europe and China are pulling their forecasts for the year or providing grim outlooks, citing rising costs, weak consumer sentiment and a lack of business confidence as a result of President Donald Trump’s worldwide trade offensive. The recent earnings season wasn’t about the numbers, it was about the narrative. Nobody cared what you did in the first quarter other than to determine the jumping off place for the new tariff economy.
Meanwhile in Europe, analysts’ expectations for 2025 earnings growth has slowed by the sharpest since the Covid pandemic, BI found, even as MSCI Europe constituents posted a 5% earnings increase, beating an expected 1.5% decline. And in China, earnings projections for the benchmark CSI 300 Index have fallen 1.7% from a peak around the end of March, data compiled by Bloomberg show. Investors were in for a rude awakening as they were expecting outlooks to turn around in the first quarter, but Trump’s tariff blitz complicated the nascent recovery in corporate profits.
OVERVIEW OF AUSTRALIAN MARKET
The sharemarket extended gains after the Reserve Bank of Australia followed through with a 25 basis point interest rate cuts that had been widely expected by economists. The S&P/ASX 200 rose around 0.2 percentage points after the RBA’s rate call, taking its total end-of-day gain to 0.2%. All 11 sectors were in the green.
Technology and financial stocks, which are typically sensitive to interest rates, advanced. Commonwealth Bank lifted 0.4%, tempering an early advance that saw it push past $173. National Australia Bank jumped 1.0% and Macquarie rose 2.3%. ANZ up 1.5% and pared Monday’s loss. TechnologyOne leapt 10.8% after the software giant lifted its interim dividend 30% and reported strong revenue growth in the first half. WiseTech climbed 2.9%.
Profit-taking hit typically defensive utilities stocks ahead of the rate decision with power company Mercury NZ retreating 3.1%. Gold stocks were also heavily sold, with Newmont down 2.1%. Gold edged lower as the haven demand from Moody’s Ratings’ downgrade of the US faded, and attention turned back to the easing of trade tensions between the two largest economies.
