US Markets: Pre-Market

April 23, 2025

Published 2 months ago

Highlights

  • U.S. stock futures rally sharply (Dow +444 pts, S&P 500 +1.7%) after Trump rules out firing Fed Chair Powell and signals softer tone on China tariffs; tech stocks lead, Tesla +5%.
  • Trump reiterates push for Fed rate cuts but confirms Powell will remain; markets relieved by continuity at the Fed.
  • IMF slashes global growth forecast to 2.8% and U.S. to 1.8% for 2025, citing U.S. tariff policy as a principal risk; U.S. recession odds raised to 40%.
  • U.S. dollar surges, then stabilizes on Fed and trade news; gold hits record $3,509.90 before pulling back, oil (Brent) rises to $68.09/bbl.
  • Bitcoin jumps to $93,000 amid equity volatility, with ETF inflows surging to highest since January; correlation with S&P 500 remains moderate.
  • Intel to cut 20% of workforce (~20,000 jobs) in major restructuring; shares +3.3% premarket.
  • Vertiv Holdings beats Q1 earnings, raises guidance on AI/data center demand; shares surge 20% premarket.
  • EU fines Apple (€500M) and Meta (€200M) under Digital Markets Act, escalating regulatory pressure on U.S. tech; both plan to appeal.
  • Tesla Q1 revenue misses (–9% YoY), automotive sales –20%, guidance pulled; cash position strong, new models on track for 2025.
  • U.S. auto groups urge delay to 25% parts tariff set for May 3, warning of job losses and supply chain disruption; Trump signals possible relief.
  • U.S. resumes collections on 5M defaulted student loans May 5, including wage garnishment; potential consumer headwind.
  • China warns South Korea to halt rare earth exports to U.S. defense firms, raising supply chain/geopolitical risks.

Market Commentary

Markets are staging a relief rally this morning, with U.S. equity futures rebounding on the back of President Trump’s assurance that Fed Chair Powell will remain in place and his softened rhetoric on China tariffs. The removal of immediate Fed leadership risk and hints at tariff de-escalation have eased investor anxiety, driving gains in risk assets—particularly tech, with Tesla and Intel both in focus. However, the IMF’s sharp downgrade of global and U.S. growth forecasts underscores that the macro backdrop remains fragile, with tariff policy still a major overhang.

The dollar’s initial surge and subsequent stabilization reflect shifting perceptions of U.S. policy risk and global capital flows. A record spike in gold, followed by a pullback, signals ongoing hedging against uncertainty despite improved sentiment. Oil’s move higher is supported by both risk-on flows and continued geopolitical tension, with the U.S. sanctioning Iranian energy networks and the EU accelerating moves to shift away from Russian gas, potentially boosting U.S. LNG demand.

In sector news, tech and AI remain bright spots: Vertiv’s blowout quarter and raised guidance highlight persistent demand for data center infrastructure, while Intel’s deep cost cuts are cheered by investors seeking margin improvement. Conversely, Tesla’s weak Q1 and withdrawn guidance reveal the operational headwinds facing EV makers amid tariff and demand uncertainty. Regulatory risk for U.S. tech is again in the spotlight after hefty EU fines for Apple and Meta, raising the specter of further trans-Atlantic trade friction.

Traders should watch for follow-through in equities, particularly in tech and AI-adjacent names, but remain alert to headline risk around tariffs and Fed policy. Fixed income markets are digesting strong Treasury auction demand but remain sensitive to growth downgrades and inflationary pressures from tariffs. The resumption of student loan collections could weigh on consumer discretionary names. Commodities, especially gold and oil, are likely to stay volatile on geopolitical crosscurrents. Crypto’s resilience—Bitcoin at $93,000—suggests continued diversification flows amid macro uncertainty.

Bottom line: The relief rally may have legs in the short term, but with global growth expectations falling, policy uncertainty persisting, and supply chain/geopolitical risks unresolved, traders should stay nimble and watch for reversals as new data and policy signals emerge.

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