Source: Sharecast
US retail sales rose by just 0.2% in February, according to data from the Census Bureau, while January's decline was revised down to 1.2% (from -0.9% initially) – the biggest decline in more than two years. This was well below the 0.7% gain expected by a consensus of analysts.
Meanwhile, the New York Fed's Empire State manufacturing survey slumped 26 points to -20 this month, down from +5.7 in February and the lowest level since January 2024. The consensus forecast was for a small contraction, with a figure closer to -1.9.
The Dow was trading around 0.5% higher while the S&P 500 gained 0.3%; the Nasdaq, however, fell 0.1%. Market confidence was still fragile following a mass sell-off over recent weeks on the back of tariff-related uncertainty, with the three equity benchmarks having each fallen 5% or more since the start of March.
Geopolitics and data take centre stage
In the latest back-and-forth newsflow regarding Washington's trade policies, Donald Trump said he would go ahead with reciprocal and additional sector-specific tariffs on April 2 with no exemptions for the steel and aluminium sectors. Speaking to reporters aboard the presidential aircraft Air Force One, Trump said “in certain cases” both types of levies would be placed on imports to the US.
In a research note at the weekend, Deutsche Bank analysts said the equity sell-off has further to run before the tariffs officially kick in. Chief strategist Binky Chadha said "we expect positioning to continue to unwind", which could see the S&P 500 hit 5,250 – representing another 6.9% drop from Friday's close.
In other news, the OECD cut its growth projections for the world economy for 2025 and 2026 as policy uncertainty hits investment and household consumption. After growing by 3.2% in 2024, global GDP is expected to rise by 3.1% this year and 3.0% next year, the OECD said in its Interim Economic Outlook report, compared with earlier forecasts of 3.3% growth in both years.
Later in the week, markets will be looking out for central bank meetings at the Bank of England, Bank of Japan, the Swiss National Bank and the Federal Reserve. For the Fed specifically, policymakers are expected to maintain interest rates for the second straight meeting, with further rate moves likely to be delayed until the summer amid significant economic volatility.
"With traders increasingly speculating that Trump could be engineering a recession in a bit to drive down boring costs, all eyes will be on Jeremy Powell as he lays out the Fed’s stance in the face of potential economic weakness," said Joshua Mahony, chief market analyst at Scope Markets.
Market movers
Intel's share price surged on reports that its incoming chief executive Lip-Bu Tan has considered significant changes to the company’s chip manufacturing methods and artificial intelligence strategies ahead of his return to the company.
Reuters cited two people familiar with Tan's thinking as saying that the new trajectory includes restructuring the company's approach to AI and staff cuts to address what Tan views as a slow-moving and bloated middle management layer.
Netflix was trading higher after MoffettNathanson raised its rating on the streaming group from 'neutral' to 'buy', while cruise liner Norwegian was bolstered by a JPMorgan upgrade from 'neutral' to 'overweight'.
