US stocks traded mixed this Tuesday afternoon as investors remained on edge ahead of President Trump’s much-anticipated "Liberation Day" announcement, which is expected to introduce sweeping reciprocal tariffs.
The S&P 500 (GSPC) climbed 0.3%, recovering from session lows, while the Dow Jones Industrial Average (DJI) hovered around the flat line. The tech-heavy Nasdaq Composite (IXIC) rose 0.7%.
Despite Monday’s rebound, the S&P 500 remains near its lowest levels of the year following a rough March, marking its worst first-quarter performance in three years. Market uncertainty surrounding trade policies and broader economic risks continues to weigh on sentiment.
Market Movers:
- Johnson & Johnson (JNJ) – Down 5%: Shares of Johnson & Johnson fell 5% after a US bankruptcy court judge rejected the company’s third attempt to resolve its $10 billion talc litigation case. With over 60,000 plaintiffs claiming J&J's talc-based products caused cancer, investors are concerned about the financial impact of prolonged legal battles. The company, however, has vowed to continue fighting the case.
- Newsmax (NMAX) – Up 60%: After skyrocketing more than 120% earlier in the session, Newsmax shares settled with a 60% gain, extending its meteoric rise since its IPO. The conservative media outlet has now surged over 735% since its debut, pushing its market cap past $10 billion. Analysts caution that its rapid ascent may face volatility in the coming weeks.
- Microsoft (MSFT) – Rated Top Pick by RBC: RBC Capital Markets analyst Rishi Jaluria named Microsoft a top pick, citing the company's robust AI expansion and strong cloud business. The rating boosted investor confidence, helping MSFT shares climb in afternoon trading.
Stagflation Fears Grow Amid Economic Uncertainty
Concerns over stagflation—slowing growth and persistent inflation—are growing as fresh economic data paints a grim picture. The ISM’s manufacturing index slipped into contraction territory for the first time this year, signaling a slowdown in industrial activity. Simultaneously, input costs surged, hitting their highest levels since June 2022, as companies struggle with rising expenses fueled by Trump’s evolving tariff strategy.
Economists warn that new trade policies' uncertainty could hurt corporate spending and supply chain stability. Ed Yardeni of Yardeni Research raised his probability estimate for a stagflation scenario to 45%, up from 35%, citing increased inflationary pressures and weaker manufacturing data.
Labor Market Signals Further Weakness
The latest Job Openings and Labor Turnover Survey (JOLTS) revealed a dip in job openings to 7.57 million in February, the lowest level in four years. Hiring remains sluggish, while the quits rate—a key indicator of worker confidence—dropped to 2%, signaling growing employee concerns about job security.
With job market softness emerging and economic growth appearing more fragile, investors are closely watching upcoming employment reports to gauge the Federal Reserve’s potential response.
Looking Ahead
All eyes are on President Trump’s "Liberation Day" tariff announcement, set for Wednesday, which could introduce the highest effective US tariff rate since the 1940s. Investors are bracing for potential market volatility, as the scope and scale of the tariffs remain uncertain. Additionally, key economic reports, including the March employment data and Fed minutes, will provide further insight into the state of the economy and potential policy responses in the coming weeks.