March 24th Market Overview

Happy Monday.

Markets finally caught a break today. After weeks of sweating over Trump's tariff threats, we got some good news - it looks like he's not going to swing the hammer quite as hard as everyone thought. Stocks jumped across the board. Tesla snapped its losing streak with a 10% jump, and the tariff news also lifted chip stocks like AMD and Nvidia.

Nothing's certain until April 2nd when Trump actually announces the plan, but for now, I’m just happy to see some green on their screens.

Let's dig in...

Executive Summary

• Markets open the week strong with all major indices posting strong gains after weeks of pressure
  

• Nasdaq led the advance as tech stocks bounced back from their recent sell-off
  

• Semiconductor stocks surged after reports that Trump will delay tariffs on chips
  

• Bitcoin climbed above $87,000, reaching levels not seen since early March
  

• Small-cap stocks outperformed large-caps with the Russell 2000 out-pacing tech
  

Market Overview

Key Market Drivers

1. Tariff Strategy Shift: President Trump confirmed sector-specific tariffs on pharmaceuticals and automobiles would come in the "near future," not in early April. Reports suggest focus narrowed to the "dirty 15" countries with unfavorable trade balances.

2. Mixed Economic Data: S&P Global's flash services index reached 54.3, beating expectations of 51.5 and February's 51.0. Manufacturing fell to 49.8, down from February's 52.7 and below the 51.5 forecast.

3. Venezuela Oil Policy: Trump announced 25% tariffs on countries purchasing Venezuelan oil, effective April 2. The Treasury Department extended Chevron's license to produce oil in Venezuela until May 27 following CEO lobbying efforts.
   

Stock Spotlight

Tesla $TSLA ( ▲ 0.7% ) ended a nine-week losing streak. The company plans to activate Full Self-Driving in China pending regulatory approval.

Advanced Micro Devices $AMD ( ▲ 0.84% ) rose after Jack Ma's Ant Group used AMD chips to train cheaper AI models, strengthening AMD's position in the AI market.

23andMe $ME ( ▼ 1.58% ) fell after filing Chapter 11 bankruptcy. CEO Anne Wojcicki resigned following failed takeover bids as the company seeks a buyer.

AZEK $AZEK ( ▼ 1.25% ) rose on James Hardie Industries' $9 billion acquisition offer. The deal values AZEK at $56.88 per share, a 37.4% premium to Friday's close.

Big Name Updates

Meta $META ( ▼ 1.87% ) advanced after South Korean AI startup FuriosaAI reportedly rejected the company's $800 million acquisition offer.

Nvidia $NVDA ( ▲ 1.35% ) gained on news that Ant Group trained AI models using alternative chips. CEO Jensen Huang previously noted this trend signals increased AI computing demand.

Lockheed Martin $LMT ( ▼ 1.21% ) declined after losing the Pentagon's fighter jet contract. Bank of America downgraded shares to neutral, cutting its price target from $685 to $485.

Boeing $BA ( ▼ 2.36% ) rose after winning the F-47 fighter jet contract. Melius Research upgraded shares to buy from hold.

Other Notable Company News

Chevron $CVX ( ▼ 0.58% ) saw its Venezuela oil production license extended to May 27 following CEO Mike Wirth's lobbying efforts with Trump officials.

Viasat $VSAT ( ▲ 1.73% ) rose after Deutsche Bank upgraded the satellite company to buy from hold.

D-Wave Quantum $QBTS ( ▼ 1.43% ) and Rigetti Computing $RGTI ( ▼ 2.71% ) gained as investor interest in quantum computing increased, despite tech leaders' skepticism about practical applications.

Freddie Mac $FMCC ( ▲ 4.22% ) and Fannie Mae $FNMA ( ▲ 4.16% ) jumped on speculation of privatization through a new U.S. sovereign wealth fund.

Small-cap Russell 2000 index $IWM ( ▲ 0.12% ) , outperforming the S&P 500. The index remains in correction territory, 15% below its November 2024 high.

Sector Watch

Bond Market

• The 10-year Treasury yield rose four basis points to 4.29%

• Investors shifted from safe-haven assets toward riskier investments

• Move reflects growing confidence that trade war concerns may be overstated

• Return of risk appetite suggests markets see potentially limited economic impact from tariffs

Policy Watch

• President Trump called for the Federal Reserve to lower interest rates during Monday's cabinet meeting, his second such call in five days

• Treasury Secretary Scott Bessent supported this view, noting that reducing government sector employment would "lead to disinflation"

• The White House appears to be narrowing its April 2 tariff implementation to target roughly 15% of countries with unfavorable U.S. trade balances (more news incoming on this for sure)

• Trump announced 25% tariffs on any country purchasing Venezuelan oil or gas, aimed at pressuring both Venezuela's Maduro government and China

What to Watch Out For

1. PCE Inflation Data on Friday: The Federal Reserve's preferred inflation gauge will be released, with economists expecting annual "core" PCE to have clocked in at 2.7% in February, up from the 2.6% seen in January.

   • This report could provide critical insights into the Fed's rate cut timeline

   • Any significant deviation from expectations might impact market sentiment immediately
     

2. Upcoming Earnings Reports: Results from Lululemon $LULU ( ▼ 1.59% ) , GameStop $GME ( ▼ 1.04% ) , and Dollar Tree $DLTR ( ▼ 2.59% ) will headline this week's slate of corporate reports.

   • Lululemon's guidance will be closely watched for consumer spending trends

   • GameStop's earnings might trigger volatility due to its status as a popular retail trading stock
     

3. April 2 Tariff Announcement: Markets will remain sensitive to any additional comments from the Trump administration regarding the scope and implementation of the upcoming tariffs.

   • Watch for official White House statements clarifying targeted sectors

   • Policy shifts could create significant opportunities across multiple sectors

P.S. 

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Thanks for reading 🙂

- John