Stock Market Update

The S&P 500 futures are down 90 points and are trading 1.6% below fair value, the Nasdaq 100 futures are down 367 points and are trading 1.9% below fair value, and the Dow Jones Industrial Average futures are down 502 points and are trading 1.2% below fair value.

Contracts linked to the S&P 500, the Nasdaq 100, and the Dow industrials are lower due in part to pre-open losses in mega cap stocks. 

Uncertainty about trade policy and potential impacts on global growth remains top of mind. The 125% duty on imports from China is still in effect and the higher, country-specific rates go into effect July 9 unless countries can make a deal with the U.S.

Director of the National Economic Council Kevin Hassett said in a CNBC interview that the 10% global tariff that is still in place will be the baseline and it will take an "extraordinary deal" for President Trump to lower that. CNBC interview

There's also a market-moving event on the horizon in the form of the March Consumer Price Index at 8:30 ET. 

Treasury yields are lower after a significant move up in recent days. The 10-yr yield is down ten basis points to 4.30% and the 2-yr yield is down nine basis points to 3.86%. 

In corporate news:

• Amazon.com (AMZN 186.83, -4.27, -2.2%): Chinese sellers prepare to increase prices, according to Reuters
• CarMax (KMX 73.69, -6.37, -8.0%): misses by $0.08, reports revs in-line
• Taiwan Semiconductor Manufacturing (TSM 156.87, -1.88, -1.2%): reports March revs increased 46.5% yr/yr to ~NT$285.96 bln
• U.S. Steel (X 40.65, -4.49, -10.0%): Trump says he does not want to see it owned by Japan, according to Reuters
• Constellation Brands (STZ 179.00, -4.40, -2.4%): beats by $0.35, beats on revs; guides FY26 EPS below consensus, provides outlook for FY27-FY28, Announces new 3-year, $4.0 bln share repurchase authorization; signs agreement with The Wine Group to divest mainstream wine brands; Also is undergoing a review of its organizational structuring

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region had a strong showing on Thursday while India's Sensex was closed for a holiday. Japan's Nikkei: +9.1%, Hong Kong's Hang Seng: +2.1%, China's Shanghai Composite: +1.2%, India's Sensex: HOLIDAY, South Korea's Kospi: +6.6%, Australia's ASX All Ordinaries: +4.7%.
  • In economic data:
    • China's March CPI -0.4% m/m (expected -0.2%; last -0.2%); -0.1% yr/yr (expected 0.0%; last -0.7%). March PPI -2.5% yr/yr (expected -2.3%; last -2.2%)
    • Japan's March Bank Lending 2.8% yr/yr (expected 3.1%; last 3.0%). March PPI 0.4% m/m (expected 0.2%: last 0.2%); 4.2% yr/yr (expected 3.9%; last 4.1%)
  • In news:
    • China Securities Daily called on the People's Bank of China to lower interest rates and the reserve requirement ratio.
    • The World Trade Organization forecast that merchandise trade between China and the U.S. could decrease by up to 80%.
    • Meanwhile, Vietnam confirmed the start of official talks while Japan dispatched an initial delegation to Washington that will set the ground for a visit from Economy Minister Akazawa.
    • New Zealand's Finance Minister Willis said that the Reserve Bank of New Zealand has plenty of room to cut rates if necessary.
• Major European indices trade on a firmly higher note. STOXX Europe 600: +5.6%, Germany's DAX: +5.7%, U.K.'s FTSE 100: +4.6%, France's CAC 40: +5.7%, Italy's FTSE MIB: +7.0%, Spain's IBEX 35: +5.8%.
  • In economic data:
    • Italy's February Industrial Production -0.9% m/m, as expected (last 2.5%); -2.7% yr/yr (expected -1.9%; last -0.8%)
  • In news:
    • The EU announced that its tariff countermeasures will be suspended for 90 days to negotiate with the United States.
    • Despite this sign of goodwill, EU officials voted in favor of retaliating for the 25% U.S. tariff that was imposed on steel and aluminum imports in mid-March.
    • Still, the 90-day respite has reduced the market's expectations for an aggressive series of rate cuts from the European Central Bank.
    • Bank stocks, miners, and energy names have been among today's best performers. British food retailer Tesco warned about falling profits while Volkswagen affirmed its guidance for the year.