Stock Market Update

The S&P 500 futures are down 190 points and are trading 3.4% below fair value, the Nasdaq 100 futures are down 730 points and are trading 3.9% below fair value, and the Dow Jones Industrial Average futures are down 1,216 points and are trading 2.9% below fair value.

Contracts linked to the S&P 500, Nasdaq 100, and Dow industrials are significantly lower after President Trump's tariff announcements. 

The administration imposed a 10% baseline tariff on global imports, and higher rates for 60 other countries including China at 34% (bringing the total tariff rate to 54%), the EU at 20%, and India at 26%. The 10% baseline tariffs go into effect April 5 and the higher rates on individual countries go into effect April 9.

Pre-open declines in large-cap tech names, which are responding to the tariff news, have contributed to this morning's strong negative bias.

Treasury yields are sharply lower in a safe-haven bid. The 10-yr yield is down 13 basis points to 4.07% and the 2-yr yield is down 11 basis points to 3.79%.

In corporate news:

• Apple (AAPL 206.61, -17.28, -7.7%): sliding ahead of the open after tariff news; Executives file notice of proposed sale of common stock pursuant to rule 144
• Tesla (TSLA 266.02, -16.71, -5.9%): sliding ahead of the open after tariff news; CEO Elon Musk denies report that he will soon leave role in government
• Microsoft (MSFT 372.01, -10.13, -2.7%): sliding ahead of the open after tariff news; Microsoft is pulling back on some data center projects, according to Bloomberg
• RH (RH 175.15, -74.20, -29.8%): misses by $0.34, misses on revs; guides Q1 revs below consensus; guides FY26 revs below consensus

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region had a poor showing on Thursday as participants responded to yesterday's tariff announcement from the White House. Japan's Nikkei: -2.8%, Hong Kong's Hang Seng: -1.5%, China's Shanghai Composite: -0.2%, India's Sensex: -0.4%, South Korea's Kospi: -0.8%, Australia's ASX All Ordinaries: -1.0%.
  • In economic data:
    • China's March Caixin PMI 51.9 (expected 51.5; last 51.4)
    • Japan's March Services PMI 50.0 (expected 49.5; last 53.7)
    • Hong Kong's March Manufacturing PMI 48.3 (last 49.0)
    • Australia's March Services PMI 51.6 (expected 51.2; last 50.8). February trade surplus AUD2.97 bln (expected surplus of AUD5.38 bln; last surplus of AUD5.16 bln). February Imports 1.6% m/m (last -0.4%) and Exports -3.6% m/m (last 0.8%)
  • In news:
    • A 34% tariff will be added on top of the current 20% tariff on imports from China while imports from Japan and Vietnam will be tariffed at 24% and 46%, respectively.
    • However, imports from Australia and New Zealand will only be subject to a 10% tariff.
    • China vowed to take "resolute" countermeasures in response while other countries are expected to push for negotiations with Washington.
• Major European indices trade in the red as the market reacts to yesterday's tariff news from President Trump while regional currencies are sharply higher against the dollar. STOXX Europe 60: -2.1%, Germany's DAX: -2.2%, U.K.'s FTSE 100: -1.5%, France's CAC 40: -2.7%, Italy's FTSE MIB: -2.3%, Spain's IBEX 35: -1.4%.
  • In economic data:
    • Eurozone's March Services PMI 51.0 (expected 50.4; last 50.6). February PPI 0.2% m/m (expected 0.3%; last 0.7%); 3.0% yr/yr (last 1.7%) o Germany's March Services PMI 51.3 (expected 50.2; last 51.1)
    • U.K.'s March Services PMI 52.5 (expected 53.2; last 51.0)
    • France's March Services PMI 47.9 (expected 46.6; last 45.3)
    • Italy's March Services PMI 52.0 (expected 52.6; last 53.0)
    • Spain's March Services PMI 54.7 (expected 55.6; last 56.2)
    • Swiss March CPI 0.0% m/m (expected 0.1%; last 0.6%); 0.3% yr/yr (expected 0.5%; last 0.3%)
  • In news:
    • Luxury goods producers are under pressure after it was announced that imports to the U.S. from the EU will face a 20% tariff.
    • European Central Bank President Lagarde underscored the unpredictability of the current climate while European Commission President von der Leyen said that U.S. tariffs will significantly harm the global economy.