Stock Market Update

[BRIEFING.COM] The stock market continued its downtrend today after yesterday's brief reprieve for the S&P 500 (-1.4%) and Nasdaq Composite (-2.0%). The indices gave up yesterday's gains and then some, leading the S&P 500 to close in correction territory (i.e. 10% below its all-time high on February 19). The Nasdaq Composite moved further into correction territory.

There were positive-looking economic reports this morning, but stocks didn't respond in kind. The February Producer Price Index contained some lower-than-expected headline prints and weekly jobless claims remained relatively low. The understanding that US trade policy may negatively impact inflation in the future overshadowed the positive reports.

President Donald Trump announced a potential 200% tariff on European beverage imports, including wines and spirits. This move was in response to the European Union's recent tariffs on American whiskey, intensifying fears of a prolonged trade war that could hinder global economic growth.

The negative disposition in equities was also related to some corporate news. The relatively disappointing in-line guidance from Adobe (ADBE 377.84, -60.76, -13.9%), along with disappointing guidance from SentinelOne (S 18.23, -1.07, -5.5%) and UiPath (PATH 9.97, -1.86, -15.7%) weighed on growth stocks. The Russell 3000 Growth Index declined 2.2%.

Treasuries settled with gains in response to this morning's data. The 10-yr yield settled four basis points lower at 4.27% and the 2-yr yield settled four basis points lower at 3.95%. On a related note, the U.S. Treasury completed this week's mediocre note and bond auction slate with a weak 30-yr bond reopening.

• Dow Jones Industrial Average: -4.1% YTD
• S&P 500: -6.1% YTD
• S&P Midcap 400: -8.4% YTD
• Nasdaq Composite: -10.4%
• Russell 2000: -10.6% YTD

Reviewing today's economic data:

• February PPI 0.0% (Briefing.com consensus 0.3%); Prior was revised to 0.6% from 0.4%, February Core PPI -0.1% (Briefing.com consensus 0.3%); Prior was revised to 0.5% from 0.3%
  • The key takeaway from the report is comparable to the key takeaway from the CPI report: inflation at the wholesale level, while improving, is still too high, and with the tariff battles heating up, there is concern that the disinflation isn't going to persist.
• Weekly Initial Claims 220K (Briefing.com consensus 228K); Prior was revised to 222K from 221K, Weekly Continuing Claims 1.870 mln; Prior 1.897 mln
  • The key takeaway from the report is that initial jobless claims -- a leading indicator -- held steady at relatively low levels that are consistent with an otherwise sound labor market.

Friday's economic data includes:

• 10:00 ET: Preliminary March University of Michigan Consumer Sentiment (Briefing.com consensus 65.6; prior 64.7)