Opening Comment — Wednesday, April 16, 2025
DJIA: 40,368.96, down 155.83
S&P 500: 5,396.63, down 9.34
NASDAQ: 16,823.17, down 8.31
Stocks lower following tech declines
Stock futures are lower Wednesday morning following Technology sector declines as the export of certain chips to China was delayed following U.S. government restrictions. Market participants are awaiting today’s comments from Federal Reserve (Fed) Chair Jerome Powell. Investors are also looking forward to data releases for retail sales, industrial production, and a gauge of homebuilder sentiment. As of 7:15 AM ET, the Dow is decreasing 0.1%, while the S&P 500 is down 0.8%. The Nasdaq 100 is falling 1.5% relative to fair value on the GLOBEX.
U.S. equities were lower on Tuesday as import prices declined by 0.1% month-over-month (MOM) in March, while export prices were flat MOM, meeting expectations. The New York Fed’s Empire State Manufacturing Survey headline general business conditions index rose more than expected in April. The Dow was down 0.4%, while the tech-heavy Nasdaq Composite fell 0.1%. The S&P 500 decreased 0.2% with seven of 11 sectors finishing in negative territory. The Information Technology sector was the top performer, rising 0.3%, while the Consumer Discretionary sector was the bottom performer, falling 0.8%.
On the data front, the Mortgage Bankers Association’s gauge of mortgage applications declined by 8.5% for the week ending April 11 versus the prior week’s increase of 20.0%. Retail sales are expected to have increased 1.4% MOM in March versus the prior month’s 0.2% gain. Industrial production is forecasted to have decreased 0.2% MOM in March versus the prior month’s 0.7% increase, while capacity utilization is projected to have fallen to 77.9% from the prior month’s 78.2%. The New York Fed will release their Business Leaders Survey for April, with the headline business activity index expected to rise to negative 12.1 from the prior month’s negative 19.3. Business inventories are expected to have risen 0.2% MOM in February, versus the prior month’s 0.3% increase. The National Association of Home Builders’ Housing Market Index is forecasted to decrease to 38 for April versus the prior month’s 39. The Department of Energy’s measure of crude oil inventories is expected to increase by 945,000 barrels for the week ending April 11 versus the prior week’s increase of 2.55 million barrels.
Across the pond, European stocks are lower in mid-day trading following the U.K.’s headline and core Consumer Price Index (CPI) cooling more than expected to 2.6% and 3.4% year-over-year (YOY), respectively. The country’s March Retail Price Index also came in slightly cooler than projected on a monthly basis.
Overnight in Asia, stocks were mixed as China’s first quarter gross domestic product came in at 5.4% YOY growth, while the country’s March industrial production and retail sales came in above forecasts. South Korea’s Export Price Index rose 0.3% MOM in March. Meanwhile, Japan’s core machine orders rose 1.5% YOY in February, versus expectations of a decline.
In FOREX trading, the dollar is lower ahead of Fed Chair Jerome Powell’s comments later today. Investors are also awaiting key announcements from the Bank of Canada and European Central Bank meetings, scheduled for today and tomorrow, respectively.
Over in the commodity pits, West Texas Intermediate (WTI) crude oil is 0.9% higher at $61.85/barrel despite an expected increase in reported crude oil inventories.
In the metals complex, gold is 2.5% higher at $3,299.20/ounce following a weakening dollar.