Stock Market Update

[BRIEFING.COM] The stock market exhibited extreme turbulence on the first session of the week on above-average volume. The S&P 500 (-0.2%), which traded in bear market territory (i.e., 20% below its recent peak) near its worst level of the session, swung more than 400 points between its intraday high and low. The index was down 4.7% shortly after the open and surged 3.4% at its high. 

The Nasdaq Composite, down more than 800 points at its low, closed 0.1% higher thanks to rebound action in mega caps and chipmakers.

The initial bounce off session lows coincided with an erroneous report that NEC Director Kevin Hassett said President Trump is considering a 90-day pause on the tariffs, except for China. The White House called the report fake news, and President Trump later indicated that the U.S. will impose an additional 50% tariff on imports from China, starting Wednesday, if China does not withdraw its 34% tariff on U.S. imports. 

Selling increased in response, but major indices remained well above their worst levels of the session. One factor keeping equity indices elevated relative to session lows was the reversal in the Treasury market.

Market rates have been sinking on safe-haven interest of late, but the 10-yr yield jumped 17 basis points today to 4.16% and the 2-yr yield rose six basis points to 3.73%. 

• Dow Jones Industrial Average: -10.8% YTD
• S&P 500: -13.9% YTD
• S&P Midcap 400: -16.1% YTD
• Russell 2000: -18.8% YTD
• Nasdaq Composite: -19.2% YTD

Today's economic data was limited to consumer credit, which decreased by $0.8 billion in February (Briefing.com consensus $15.1 billion) after increasing by a downwardly revised $8.9 billion (from $18.1 billion) in January.

• The key takeaway from the report is that February marked the third contraction in consumer credit in the last four months.