Stock Market Update

[BRIEFING.COM] Today's trade featured a positive bias through the entire session, reflecting an ongoing buy-the-dip mentality after the S&P 500 entered correction territory last week. Losses in the mega cap space limited index performance in the early going, but market breadth reflected more buying interest under the index surface. Advancers had a 4-to-1 lead over decliners at the NYSE and a 5-to-2 lead at the Nasdaq.

Buying increased in many areas of the market in the afternoon trade, sending the major indices to session highs. This followed a Bloomberg report indicating that the newly confirmed U.S. Trade Representative Greer aims for a more orderly rollout of reciprocal tariffs on April 2.

The afternoon rebound was also helped by recovery action in a few mega cap names. Apple (AAPL 214.00, +0.51, +0.2%), which traded down as much as 1.6% at its low of the day, and Microsoft (MSFT 388.70, +0.14, +0.04%), which traded down as much as 0.8% at its worst level of the day, were influential winners in that respect. The two stocks combined comprise 13% of the S&P 500 in terms of market-cap.

Market participants were largely unbothered by this morning's economic releases. U.S. retail sales and retail sales, excluding autos, were weaker than expected in February, yet control group sales (excluding auto, gasoline station, building materials, and food services sales) were up a solid 1.0%. The New York Fed's Empire Manufacturing Survey for March showed a contraction in business activity and a pickup in prices paid and prices received.

Ten of the 11 S&P 500 logged gains, led by energy (+1.7%) amid rising oil prices ($67.58/bbl, +0.39, +0.6%).  The move in oil was related to increased geopolitical tensions in the Middle East after President Trump warned Iran after Houthi attacks on US vessels that any further attacks by Houthi rebels will be looked upon as "a shot fired from the weapons and leadership of Iran." Uncertainty in the Middle East translates to higher prices in oil on concerns about supply disruptions.

Elsewhere, selling increased in Treasuries as buying picked up in equities following the pleasing tariff-related headline. The 10-yr yield settled the session unchanged from Friday at 4.31% and the 2-yr yield settled three basis points higher at 4.05%.

• Dow Jones Industrial Average: -1.7% YTD
• S&P 500: -3.5% YTD
• S&P Midcap 400: -4.8% YTD
• Nasdaq Composite: -7.8%
• Russell 2000: -7.3% YTD

Reviewing today's economic data:

• Retail sales increased 0.2% month-over-month in February (Briefing.com consensus 0.7%) following a downwardly revised 1.2% decline (from -0.9%) in January. Excluding autos, retail sales were up 0.3% month-over-month (Briefing.com consensus 0.4%) following a 0.6% decline (from -0.4%) in January.
  • The key takeaway from the report is that control group retail sales, which exclude auto, gasoline station, building materials, and food services sales, jumped 1.0% month-over-month following a downwardly revised 1.0% decline (from -0.8%) in January.
• The New York Fed's Empire Manufacturing Survey for March showed the General Business Conditions Index declining to -20.0 in March from 5.7 in February. A number below 0.0 denotes a contraction in business activity in the New York Fed region. The Prices Paid Index rose five points to 44.9, its highest level in more than two years, while the Prices Received Index jumped three points to 22.4, hitting its highest level since May 2023.
  • The key takeaway from the report is that it plays into some of the stagflation worries that have infiltrated the market.
• January Business Inventories increased 0.3%, as expected, following a 0.2% decline in December.
• The March NAHB Housing Market Index dropped to 39 (Briefing.com consensus 43) from 42 in February.

• 8:30 ET: February Housing Starts (Briefing.com consensus 1.385 mln; prior 1.366 mln), Building Permits (Briefing.com consensus 1.450 mln; prior 1.483 mln), February Import Prices (prior 0.3%), Import Prices ex-oil (prior 0.1%), Export Prices (prior 1.3%), and Export Prices ex-agriculture (prior 1.5%)
• 9:15 ET: February Industrial Production (Briefing.com consensus 0.2%; prior 0.5%) and Capacity Utilization (Briefing.com consensus 77.7%; prior 77.8%)