Opening Comment — Thursday, March 27, 2025
DJIA: 42,454.79, down 132.71
S&P 500: 5,712.20, down 64.45
NASDAQ: 17,899.02, down 372.84
Stocks mixed ahead of GDP data
Stock futures are mixed Thursday morning as President Donald Trump introduced a 25% tariff on auto imports to support U.S. manufacturing, set to begin April 3 for completed vehicles. President Trump also indicated the possibility of additional tariffs on the European Union and Canada if they acted jointly in an adverse manner against the U.S. Investors are also looking forward to today’s economic releases, including the third reading of fourth-quarter gross domestic product (GDP) and inflation, along with the latest unemployment claims data. As of 7:16 AM ET, the Dow is rising 0.1%, while the S&P 500 is down 0.1%. The Nasdaq 100 is falling 0.2% relative to fair value on the GLOBEX.
U.S. equities were lower on Wednesday as the preliminary reading of durable goods orders for February unexpectedly showed a pickup in activity. The Dow was down 0.3%, while the tech-heavy Nasdaq Composite fell 2.0%. The S&P 500 decreased 1.1% with six of 11 sectors finishing in negative territory. The Consumer Staples sector was the top performer, rising 1.4%, while the Information Technology sector was the bottom performer, falling 2.5%.
On the data front, the third readings of fourth-quarter GDP, GDP Price Index, core Personal Consumption Expenditures Price Index, and personal consumption are expected to come in at annualized growth rates of 2.3%, 2.4%, 2.7% and 4.2%, respectively, all unchanged from the prior readings. The preliminary February reading of wholesale inventories is expected to show an increase of 0.7% month-over-month (MOM) versus the prior month’s increase of 0.8%, while retail inventories are forecasted to have risen 0.6% MOM in February versus the prior month’s decrease of 0.1%. Initial jobless claims for the week ending March 22 are expected to rise to 225,000 from the prior week’s 223,000, while continuing claims for the week ending March 15 are expected to slightly decrease to 1.886 million from prior week’s 1.892 million. Pending home sales for February are expected to have increased 1.0% MOM and declined 3.5% year-over-year (YOY), versus the prior month’s declines of 4.6% and 5.2%, respectively. The Federal Reserve (Fed) Bank of Kansas City will release their manufacturing survey for March, with the Composite Index expected to come in at negative 5, similar to prior month’s reading.
Across the pond, European stocks are lower in mid-day trading following the most recent tariff news sparking rising concerns over an escalating trade war.
Overnight in Asia, stocks were mixed as China’s year-to-date YOY industrial profits showed a decrease of 0.3% in February. Meanwhile, Japan’s leading index rose slightly.
In FOREX trading, the dollar is slightly lower ahead of today’s third look at U.S. fourth-quarter GDP and inflation data.
Over in the commodity pits, West Texas Intermediate (WTI) crude oil is 0.2% lower at $69.54/barrel despite an unexpected decline in reported crude oil inventories.
In the metals complex, gold is 1.4% higher at $3,063.20/ounce following a weakening dollar.