4:08pm: Stocks rally
US stocks bounced back during Friday’s session to close out a volatile week on Wall Street.
The Nasdaq led the gains, up 2.6% at 17,754 points. The S&P 500 added 2.1% at 5,638 points while the Dow Jones was up 1.7% at 41,488 points.
3:28pm: Carney sworn in as Canadian PM
Mark Carney has officially been sworn in as Canada’s 24th prime minister just days after being selected as the next leader of the Liberal party.
The former governor of the Bank of Canada and the Bank of England was sworn in at Rideau Hall in Ottawa on Friday.
Carney, 59, replaces outgoing Prime Minister Justin Trudeau, who in January announced his resignation from the position after almost a decade of leading the nation.
It is expected Carney may bring forward the next federal election, currently scheduled for October, potentially within days of taking office.
Carney has committed to maintaining Canada's retaliatory tariffs on certain American products in response to US President Donald Trump's trade policies.
2:27pm: Gold touches new record
Gold prices surged past $3,000 per ounce in a historic milestone during today’s trading session.
“Gold prices recorded a historic milestone during today’s trading session by briefly touching $3,000 per ounce, consolidating its role as a safe-haven asset amid a global scenario marked by intense trade tensions and expectations of relative changes in US monetary policy,” said Quasar Elizundia, expert research strategist at Pepperstone.
Despite the psychological significance of the level, gold was unable to sustain trading above $3,000, as a moderate rebound in global stock markets toward the end of the week tempered demand for the metal.
“This relief in equities comes after days marked by uncertainty over trade escalations—particularly among the US, the EU, and China—fueling fears of a possible economic recession,” Elizundia added.
The easing of inflation data in the US, including the Consumer Price Index (CPI) and Producer Price Index (PPI), has provided additional support for gold prices. “Especially noteworthy was the CPI’s return to a disinflationary trend, which could lead the Federal Reserve to relatively soften its monetary stance,” said Elizundia.
Market expectations now point to up to three interest rate cuts in 2025, in contrast to the Fed’s December forecast of just one.
1:40pm: Deutsche Bank: Fed to hold rates
Deutsche Bank expects the Federal Reserve to keep interest rates unchanged for a second consecutive meeting, offering limited guidance on future policy due to heightened uncertainty.
The Fed is likely to announce a pause in quantitative tightening (QT) starting in April, with plans to resume it once the debt ceiling issue is resolved and balance sheet composition normalizes. However, there is a risk that the Fed may opt for a slowdown rather than a full pause, analysts cautioned.
Analysts noted the updated Summary of Economic Projections is expected to show a median forecast of two rate cuts in 2024, unchanged from December, though individual projections could shift higher, possibly reducing the expected cuts in 2025 to just one. This slightly hawkish stance will reflect projections of higher inflation, weaker economic growth, and an unchanged unemployment forecast. The long-term policy rate forecast is also expected to rise gradually.
Fed Chair Jerome Powell’s messaging is likely to align with his recent remarks, emphasizing patience despite some downside risks to growth. Strong inflation data, particularly core PCE, reinforces this cautious approach.
While Deutsche Bank maintains its view that rates will remain on hold in 2024, it sees increasing risks of economic weakness that could necessitate rate cuts in 2025. However, data and financial market conditions may force the Fed to act sooner than anticipated.
12:40pm: 'Free money has a price'
More on the drop in consumer sentiment, this time from Jamie Cox, Managing Partner for Harris Financial Group.
"Extreme readings are more noise than signal; however, I’m pretty sure people won’t like austerity—and these reading may very well reflect what we people see coming," Cox commented Friday.
"Free money has a price and it’s no fun when it ends."
And Bill Adams of Comerica points to "layoff headlines, a falling stock market, and tariff fears" as a driver behind consumer confidence decline.
"The pullback in confidence is becoming a real threat to consumer spending which as is often repeated accounts for two thirds of US economic activity."
11:00am: Consumer sentiment drops
Consumer sentiment dropped to its lowest level since November 2022, with the index for overall consumer confidence falling from 64.7 in February to 57.9 in March. The forward-looking component also declined to 55.4, signaling growing uncertainty about the future.
According to Wells Fargo, "In data going back 40 years, sentiment has only been lower a handful of times during the height of the financial crisis and during the inflation pain of 2022." The bank highlighted that 48% of survey respondents spontaneously mentioned tariffs during interviews, underscoring the ongoing economic uncertainty fueled by shifting trade policies.
Wells Fargo also pointed out that today's poor consumer sentiment aligns with similar assessments from the business sector, with both the National Federation of Independent Businesses and the Business Roundtable reporting rising uncertainty and a decline in CEO confidence.
The drop in sentiment was widespread, with declines observed across all demographic groups, including age, education, income, political affiliation, and geography.
"In short: all consumer groups are reporting weaker sentiment, it is just a question of how sharply sentiment is falling," Wells Fargo wrote.
10:05am: Markets bounce back
Stocks are rallying in early trading on Friday as markets attempt to rebound from a tumultuous week that saw the S&P 500 enter correction territory.
Just after the open, the Dow Jones is up 260 points or 0.6%, trading at 41,073. The S&P 500 has gained 54 points or 1%, reaching 5,576, while the tech-heavy Nasdaq is leading the charge with a 1.3% increase of 228 points, trading at 17,531.
The upward movement comes after a brutal selloff on Thursday, which pushed the S&P 500 into correction territory, defined as a 10% drop from recent highs.
Investors are now cautiously optimistic as they await the University of Michigan's consumer sentiment survey, which could provide insights into how consumers are adapting to new tariffs and persistent inflation.
The market's rebound is being led by technology stocks, with chipmakers Nvidia and Broadcom showing strong pre-market gains.
However, concerns about President Trump's aggressive trade policies and the looming possibility of a government shutdown continue to weigh on investor sentiment.
8:00am: Stocks set for recovery after S&P correction
Wall Street looked set to open higher after closing sharply lower on Thursday as escalating trade tensions between the United States and the European Union shook investors.
Ahead of the opening bell, futures for the Dow Jones were up 0.55% while Nasdaq futures were 1.1% higher. The S&P looked to open 0.85% up a day after the broad-market index sank into correction territory as it declined 10% below its record high in February.
"Once again, the main driver was a fresh volley of tariff threats from President Trump, who made several posts criticising the EU yesterday," Deutsche Bank strategist Jim Reid wrote in a morning note.
"In terms of the latest, President Trump said that if the EU continued with its 50% tariff on American whisky, then the US would respond with a 200% tariff on EU wines, champagnes and alcoholic products.
Optimism that the US may avoid a government shutdown helped bolster market sentiment, with a temporary funding bill poised for approval.
"Matters weren’t helped yesterday by the potential threat of a US government shutdown, with funding set to run out at midnight tonight," he added.
However, after the US close, the Democratic Senate Minority Leader Chuck Schumer said that he would vote to advance the Republican bill rather than see a shutdown.
"So that’s helped futures to recover a decent amount of ground this morning," Reid said.