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There is a bid in the equity futures market stemming from the Trump administration's announcement late Friday that smartphones, laptops, semiconductors, solar cells, and other electronic items will be excluded from the 10% global reciprocal tariff rate. This news has resonated because the order also includes the 125% reciprocal rate on imports from China; however, it was stated explicitly by the president that these products are still subject to China's 20% fentanyl-related tariff rate.
Apple (AAPL) is up 6.4% and NVIDIA (NVDA) is up 3.4% in pre-market trading, as both companies are viewed as prime beneficiaries of this reprieve, although Commerce Secretary Lutnick said the aforementioned products will be subject to separate tariffs in "a month or two."
There is still some uncertainty about what comes next then, but ahead of today's open the market is acting as if it is captivated only by what comes now. Accordingly, it is riding the mega-cap strength to early gains.
Currently, the S&P 500 futures are up 87 points and are trading 1.5% above fair value, the Nasdaq 100 futures are up 372 points and are trading 1.9% above fair value, and the Dow Jones Industrial Average futures are up 441 points and are trading 1.0% above fair value.
Better-than-expected earnings results from Goldman Sachs (GS), which were fortified by a 27% year-over-year increase in its equities trading business, have also helped the pre-open cause. Shares of GS are indicated 3.3% higher.
This week will feature a pickup in Q1 earnings reporting, the March Retail Sales Report (Wednesday), and the ECB policy meeting (Thursday), so a lot of important information is yet to come on some key fronts. Separately, it was reported by China that its March exports surged 12.4% year-over-year, with the strength attributed ostensibly to new orders frontrunning the higher tariff rates, meaning this export strength isn't expected to last.
Other focal points promise to be the behavior of the Treasury market and the dollar and the potential linkages between the two. Simultaneous weakness in both, which was on display last week, will continue to foment concerns about waning interest in U.S. assets on the part of foreign investors.
At the moment, the 10-yr note yield is down seven basis points to 4.42%, and the U.S. Dollar Index is down 0.5% to 99.63 after scraping 99.21 in the overnight trade. Both are certain to be responsive to the 11:00 a.m. ET release of the New York Fed's Survey of Consumer Expectations, which will also contain inflation expectations for the 1-yr, 3-yr, and 5-yr horizons.
