U.S. stocks pared earlier losses on Monday, with the Dow Jones Industrial Average (DJI) reversing into positive territory, while the S&P 500 (GSPC) and Nasdaq Composite (IXIC) remained in the red. The Nasdaq, heavily weighted in tech stocks, led the declines with a 1% drop. The S&P 500 initially fell to its lowest level since September before trimming losses to 0.2%, and the Dow gained 0.4% as investors shifted into defensive sectors.
Market Movers:
- Nvidia (NVDA) -4%: The AI chip giant's shares tumbled as investors rotated out of high-growth technology stocks. Concerns over potential trade restrictions and the broader macroeconomic climate weighed on sentiment.
- Tesla (TSLA) -6%: Tesla shares plunged amid growing worries over President Trump's planned 25% tariffs on foreign autos and auto parts. Despite being less exposed than other automakers, CEO Elon Musk acknowledged the impact would still be "significant" and could force price increases.
- Mr. Cooper (COOP) +17%: Shares of the mortgage lender surged following news that Rocket Companies (RKT) is acquiring it in a $9.4 billion all-stock deal. The merger will create a powerhouse in the mortgage servicing industry, managing a $2.1 trillion loan portfolio.
- Rocket Companies (RKT) -10%
Rocket stock dropped sharply after announcing the Mr. Cooper acquisition, as investors weighed the dilution effects of the all-stock transaction and the long-term impact on profitability. - AMD (AMD) +1.5%: The chipmaker's CEO, Lisa Su, reassured investors about the ongoing "immense" demand for AI infrastructure. The company also completed its $4.9 billion acquisition of ZT Systems, strengthening its foothold in hyper-scale computing.
Tariff Worries Shake Investor Confidence
With President Trump set to unveil a broad set of tariffs on April 2, market sentiment remains fragile. The latest reports indicate that the administration is prepared to levy "reciprocal" tariffs on all countries, fueling global trade war fears. A recent Washington Post article suggests Trump is pushing for an even more aggressive approach than previously expected, further unsettling markets. Investors are wary that these measures could dampen corporate earnings and slow economic growth.
Gold Soars as Safe-Haven Demand Increases
Gold prices surged to record highs, surpassing $3,100 an ounce for the first time. The precious metal's rally comes as investors seek refuge from market volatility and inflation concerns. Futures for June delivery traded around $3,147 an ounce, with analysts at Goldman Sachs and Bank of America raising their price targets in anticipation of continued demand. If inflation remains sticky, gold could continue its upward trajectory.
Wall Street Lowers Stock Market Forecasts
Amid rising uncertainty, major Wall Street firms have begun revising their market outlook downward. Goldman Sachs recently cut its S&P 500 year-end target from 6,200 to 5,700, citing weaker economic growth and heightened recession risks. Yardeni Research also slashed its forecast, now expecting the index to reach 6,100 instead of 6,400. These adjustments reflect growing concerns that trade disruptions and inflationary pressures will weigh on corporate earnings and valuations.
Looking Ahead
Investors are bracing for a volatile week as several key economic reports loom. The March jobs report, set for release on Friday, will provide crucial insights into the labor market's health. Additionally, updates on private payrolls and job openings will be closely monitored. With uncertainty surrounding Trump's tariff policies and broader economic headwinds, market participants will be watching for any signs of stability or further turbulence in the coming days.