Closing Recap

U.S. stocks rallied broadly on easing trade war fears, while oil prices jumped on potential tariffs related to Venezuela and OPEC+ output plans. Gold slipped, and both the U.S. dollar and Treasury yields rose on the prospect of less aggressive trade actions and positive economic data.

Key Takeaways

• Trade War De-escalation: Reports of a more targeted approach to tariffs by President Trump fueled a significant rally in equities.
• Tech Leads: Technology and Consumer Discretionary sectors were top performers, with Tesla experiencing a notable rebound.
• Oil Surges: WTI crude rose on news of potential U.S. tariffs on countries trading with Venezuela and OPEC+ production plans.
• Dollar and Yields Up: The U.S. dollar and Treasury yields climbed, reflecting optimism about the economy and a potential shift in trade policy.
• Gold Retreats: Gold prices declined as risk appetite returned to the market.
• Strong PMI Data: U.S. S&P Global March flash PMIs (both manufacturing and services) showed expansion, although manufacturing slipped below 50.

Market Overview

Markets responded positively to indications that the Trump administration might be softening its stance on trade tariffs. Initial fears of a broad-based trade war gave way to optimism that any actions would be more narrowly focused. This shift in sentiment triggered a broad-based rally in U.S. equities, with the S&P 500 moving back above its 200-day moving average. The Nasdaq Composite saw particularly strong gains, led by the technology sector. 

President Trump confirmed that tariffs on autos, aluminum, and pharmaceuticals were coming “in the very near future,” but the overall tone was less confrontational than previous announcements. This fueled a “risk-on” environment, boosting stocks and pushing the dollar and Treasury yields higher. The economic data released during the day generally supported the positive market sentiment. The S&P Global March flash composite PMI showed continued expansion, as did the services PMI. However, the manufacturing PMI dipped below 50, indicating a slight contraction in that sector. The CBOE Volatility Index (VIX), a measure of market fear, dropped significantly, reflecting the increased investor confidence.

Index	Up/Down	% Change	Last
DJ Industrials	597.97	0.0142	42583
S&P 500	100.01	0.0176	5767
Nasdaq	404.54	0.0227	18188
Russell 2000	52.39	0.0255	2109

Economic Data 

The economic data released presented a mixed, but generally positive, picture, with two out of three indicators showing expansion. This contributed to the overall risk-on sentiment in the market:

• S&P Global Flash PMIs: The U.S. S&P Global March flash composite PMI came in at 53.5 (vs 51.6 in February).
• The U.S. S&P Global March flash services PMI was reported at 54.3 (vs 51.0 in February).
• However, the S&P Global March flash manufacturing PMI dipped to 49.8 (vs 52.7 in February), slipping below the expansionary threshold.

Commodities, Currencies, and Treasuries

Oil prices rose significantly, with WTI crude gaining 1.22% on the prospect of U.S. tariffs related to Venezuelan oil and OPEC+ continuing its planned output increases. Gold prices retreated as investors moved away from safe-haven assets. The U.S. dollar and Treasury yields increased, driven by the potential for less disruptive trade policies and stronger-than-expected economic data. The 10-year Treasury yield rose 7 basis points, and the 2-year yield increased by 8 basis points.

Asset	Up/Down	Last
WTI Crude	0.83	69.11
Brent	0.84	73
Gold	-5.8	3015.6
EUR/USD	-0.0017	1.0797
USD/JPY	1.26	150.57

Looking Ahead 

The market’s focus will shift to upcoming inflation data (PCE) and GDP data, as well as further developments on the trade front. The strong performance of risk assets suggests a degree of optimism, but the situation remains fluid, and any renewed trade tensions could quickly reverse the gains. The market will also continue to digest the implications of the recent PMI data, particularly the dip in manufacturing.