Linea Mercati Interview 3/12/25
March 13, 2025
A relief rally or consumers walking off a cliff?
March 14, 2025Washington (awp/afp) – The New York Stock Exchange traded lower on Thursday, held back by new developments in the trade war launched by Donald Trump, despite inflation data that were better than analysts expected.
Around 1:55 PM GMT, the Dow Jones Industrial Average was down 0.54%, the Nasdaq index was down 1.42%, and the broader S&P 500 index was down 0.81%.
“The market remains stuck on certain sticking points,” including uncertainties surrounding tariffs and the US economic outlook, wrote Patrick O’Hare of Briefing.com in a note.
Before Wall Street opened, investors welcomed the release of the US Producer Price Index (PPI), which measures inflation on the producer side.
Over one month, the index showed no increase, after rising 0.6% in January, according to this publication from the US Department of Labor.
Analysts expected it not to stop, but to slow down to 0.3%, according to the consensus published by MarketWatch.
On an annual basis, the index slowed to 3.2% from 3.7% in January.
This follows the release of consumer price index (CPI) inflation data on Wednesday, which was also better than expected.
“So this is good news in terms of inflation, but the problem is that the trade war is intensifying and the market isn’t really paying attention to inflation news” because it is based on February data and “doesn’t reflect the tariffs at all,” Peter Cardillo of Spartan Capital Securities told AFP.
“We won’t know the effects of the tariffs until they fully take effect, so it’s a little too early for these data to reflect them,” the analyst added.
Donald Trump threatened France and the European Union (EU) on Thursday with 200% tariffs on their champagne, wines, and other spirits if the EU’s upcoming 50% tariff on American whiskey is not withdrawn.
The EU announced tariffs on a range of American products, including bourbon, motorcycles, and boats, on Wednesday in retaliation for the 25% US tariffs on steel and aluminum that came into effect the same day.
They are expected to take effect on April 1, one day before the so-called “reciprocal” tariffs sought by Donald Trump.
Against this backdrop, on the bond market, the yield on 10-year US government bonds rose to 4.33%, compared to 4.31% the previous day at the close.
In terms of indicators, new weekly unemployment claims were slightly down compared to last week (-2,000), below expectations.
On the stock market, semiconductor giant Intel surged (+15.50%) after the appointment of Lip-Bu Tan as its new CEO.
Struggled by its lagging position in artificial intelligence (AI), the Santa Clara, California-based company launched a redundancy plan last year to lay off 15% of its staff, lost its place in the famous Dow Jones index (replaced by its competitor Nvidia), and fired Pat Gelsinger, the CEO who had launched a major reorganization in 2021.
Professional creative software maker Adobe declined sharply (-11.19%), despite better-than-expected results for the first quarter of its staggered fiscal year. Investors viewed the forecast for the current quarter as disappointing.
The discount chain Dollar General was in demand (+4.88%) after publishing results that met expectations, including revenue of $10.3 billion.
Clothing brand American Eagle Outfitters declined (-1.97%) after publishing its forecasts for the first quarter and the current year, with the brand expecting a decline in sales, contrary to analysts’ expectations.
