Market Overview: Trade War Fears, Sector Performance, and Key Financial Updates

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Index Update

US stock futures fell by about 0.5% at the start of the second quarter, following their largest quarterly losses since 2022, amid concerns over President Trump’s upcoming tariff plan. Investors are also focused on the ISM Manufacturing PMI and JOLTS report for insights into the US economy. Megacap stocks, including Apple, Microsoft, Amazon, Meta, and Alphabet, mostly declined, while Nvidia and Tesla saw gains. Johnson & Johnson shares dropped 3.7% after a bankruptcy judge rejected its $10 billion settlement proposal.

Market Movers

On Monday, the top gainers were QuantaSing Group Limited (+9.06%), followed by Trump Media & Technology Group Corp. (+8.65%). On the contrary Open Lending Corporation (-17.39%) and Alumis Inc (-4.23%) declined the most the same day.

Commodities Update

Gold hit a record high of around $3,130 per ounce on Tuesday, driven by investor demand for safe-haven assets amid concerns over President Trump's upcoming tariffs, which could spark a global trade war. The rally was also fueled by expectations of rate cuts, central bank purchases, and strong ETF demand. Investors are closely watching key labor market reports for insights into the Federal Reserve's rate-cut plans.

WTI crude oil futures dropped to around $71.2 per barrel on Tuesday due to concerns that President Trump's escalating trade war could reduce energy demand. Trump’s upcoming tariffs will target all countries, not just those with large trade imbalances with the U.S. However, potential supply risks, including Trump’s threats against Russia and Iran, may limit the oil price decline. Trump also vowed to impose secondary tariffs on Russian oil buyers and threatened Iran with military action unless it agrees to a nuclear deal.

Macro Update

The US 10-year Treasury yield remained around 4.2% on Tuesday after declining for two sessions, as concerns over President Trump's trade escalations increased demand for safe-haven assets. Trump plans to impose reciprocal tariffs on all countries, raising fears of retaliatory actions and global economic repercussions. On the monetary policy front, New York Fed President John Williams stated that interest rates may remain steady for a while as policymakers assess data. Traders are also closely watching key labor market reports, including job openings, the ADP employment report, and the monthly payrolls report, for clues on the Fed’s rate-cut plans.

Futures Update

U.S. stock index futures were mostly steady on Tuesday after a sharp decline in the first quarter, as investors assessed recession risks ahead of President Trump’s tariff announcements on April 2. Dow Jones Futures fell 0.1%, S&P 500 Futures were flat, and Nasdaq 100 Futures gained 0.1%. The S&P 500 dropped nearly 5% in Q1, Nasdaq fell over 10%, and the Dow lost nearly 2%. Investor positioning has turned neutral for U.S. large-cap stocks, while small-cap stocks saw a slight increase in positioning.

On Tuesday, April 1st, Bitcoin traded at $84,120, up by $1,561 (1.89%) from the previous session. Over the past four weeks, Bitcoin has gained 10.74%, and over the last 12 months, its price has risen by 28.12%.

After experiencing a sharp downturn early in the session, stocks staged a significant recovery throughout the trading day on Monday. The major indices ended the day mixed, with the Dow rising by 417.86 points, or 1 percent, to close at 42,001.76, and the S&P 500 gaining 30.89 points, or 0.55 percent, to reach 5,611.84. The S&P 500 has demonstrated solid support at crucial levels and has been trending upward, suggesting the possibility for further gains, with support identified around 5,504 and resistance at 5,712. Moreover, the 14-period RSI is starting to rebound from lower levels, adding to the positive outlook.