Stocks Rally on Trade Hopes and Strong Earnings Despite Fed Uncertainty
Market News 23 apr
On Tuesday, the stock market staged a powerful rebound, fully recouping Monday’s losses and even surpassing them. Initially, the rally was purely technical—short-covering and contrarian buying amid prevailing bearish sentiment—but sentiment shifted mid-day. Bloomberg reported that Treasury Secretary Bessent expects the tariff standoff with China to de-escalate, sparking hopes of resolving the U.S.–China trade deadlock, even though formal negotiations have yet to begin.
Trade-deal optimism
U.S.–India negotiators claimed “significant progress” toward a bilateral trade agreement after talks between Vice President Vance and Prime Minister Modi, underpinning broader hopes for a thaw in U.S.–China trade tensions.
Strong corporate earnings
Equifax jumped over 13% on better-than-expected Q1 operating revenue.
3M Co. rallied more than 8% after reporting adjusted Q1 EPS and guidance above consensus.
Danaher climbed 3% on Q1 sales that beat estimates.
Currency and commodity moves
The U.S. dollar slumped to a three-year low amid talk of presidential interference in Fed independence and potential removal of Chair Powell. Gold, conversely, hit new highs as investors sought a safe haven.
Richmond Fed manufacturing index fell to −13 in April from −9 in March, marking a five-month low.
Fed officials’ views: Minneapolis Fed President Kashkari warned tariffs are likely inflationary; Richmond Fed President Barkin noted tariffs are forcing companies into defensive postures, delaying investments, and raising consumer-spending concerns.
IMF downgraded 2025 global GDP forecasts:
World: +2.8% (down from +3.3%)
U.S.: +1.8% (from +2.7%)
Eurozone: +0.8% (from +1.0%)
China: +4.0% (from +4.6%)
Japan: +0.6% (from +1.1%)
Bitcoin (^BTCUSD) surged over 4% to a six-week high, as dollar weakness and renewed concerns about Fed independence drove demand for alternatives to dollar-based assets.
Markets now assign just an 11% chance to a 25 bp rate cut at the May 6–7 FOMC meeting. Investors will watch:
Wednesday, April 23: March new-home sales (+0.7% MoM to 681,000) and the Fed’s Beige Book.
Thursday, April 24: March nondefense capital goods orders (ex-aircraft) (est. +0.1% MoM) and existing-home sales (est. −2.8% MoM to 4.14 mn).
Friday, April 25: Revised University of Michigan consumer-sentiment index for April (est. unchanged at 50.8).
Tariff-Policy Timeline
March 3: 25% on Canada/Mexico; 20% on China.
April 2: 25% on imported autos and parts.
April 4: Partial reprieve for consumer electronics; core 20% tariff on Chinese electronics remains.
April 9: 90-day pause for 56 countries on new tariffs.
China’s response: Raised U.S. tariffs to 125%; U.S. banned Nvidia chip exports to China.
Corporate Highlights
Tesla (TSLA): Q1 EPS $0.27 vs. $0.42 consensus; withdrew full-year guidance; auto revenue −20% to $13.97 bn (total revenue −9% to $19.34 bn); energy revenues +67%.
Intuitive Surgical (ISRG): Q1 non-GAAP EPS $1.81 vs. $1.73; revenue +19% to $2.25 bn; upbeat 2025 outlook on da Vinci growth.
RTX (RTX): −11% after forecasting $83–84 bn sales vs. $84.2 bn Wall Street consensus; tariffs may cut pre-tax profit by $850 mn.
Hims & Hers (HIMS): FDA warning on unapproved topical finasteride threatens product lineup.
Alphabet (GOOGL/GOOG): YouTube captured 12% of TV viewing time in March.
Warner Bros. Discovery (WBD): Introduced $7.99/mo “add-on member” feature to curb password sharing.
Northrop Grumman (NOC): Record $92.8 bn backlog; Q1 pre-tax loss $477 mn on B-21 program costs; confirmed full-year sales guidance.
Enphase Energy (ENPH): Q1 non-GAAP EPS $0.68 vs. $0.72; revenue +35% to $356 mn; cautious Q2 outlook amid tariffs.
Lockheed Martin (LMT): Q1 sales +4%; robust R&D and capex; affirmed guidance.
SAP SE (SAP): Q1 revenue +12% to €9.01 bn; cloud revenue +27%; maintained 2025 outlook.
Halliburton (HAL): Q1 revenue −6.6%; N.A. down 12%; tariffs and drilling slowdown weigh.
Tuesday’s strong rebound was fueled by technical positioning, a surge of trade-deal optimism, and better-than-expected corporate results. Yet significant risks remain—Fed independence, tariff headwinds, and a slowing global economy warned by the IMF.