Stock Market Today: Tariff Concerns Weigh on Markets as Q2 Begins

Market Overview: April 1, 2025

The stock market is starting the second quarter of 2025 on a cautious note as investors grapple with uncertainty surrounding President Donald Trump’s upcoming tariff announcements. As of Tuesday, April 1, 2025, major U.S. stock index futures are showing weakness, with Dow futures down 0.5%, S&P 500 futures declining 0.4%, and Nasdaq futures dipping 0.3%.

This follows a challenging first quarter where the S&P 500 recorded its worst three-month performance since July 2022, finishing 4.6% lower. The Nasdaq Composite suffered even more, dropping 10% in Q1 2025, marking the worst quarterly performance for both benchmarks since 2022.

Tariff Concerns Dominate Market Sentiment

The primary factor weighing on markets today is the anticipated announcement of “reciprocal tariffs” by President Trump, scheduled for Wednesday, April 2. According to Treasury Secretary Scott Bessent, the announcement will come at 3 pm ET tomorrow.

While specific details remain limited, The Washington Post has reported that the Trump administration is considering implementing tariffs of around 20% on most imports to the United States. This follows Trump’s statement on Sunday that the levies will include all countries.

The uncertainty has prompted Goldman Sachs to raise its probability of a U.S. recession to 35% from 20%, cut its year-end target for the S&P 500 to 5,700, and forecast more interest rate cuts by the Federal Reserve.

Major Index Performance

Looking at the current state of major market indexes:

– S&P 500: After finishing Q1 down 4.6%, futures indicate further weakness as Q2 begins
– Nasdaq Composite: Coming off a 10% decline in Q1, tech-heavy index continues to face pressure
– Dow Jones Industrial Average: Performed relatively better in Q1 with only a 1.3% drop, but futures are down 0.3% today

The market’s recent volatility was evident on Monday when the S&P 500 touched a six-month low before recovering to close higher, demonstrating the uncertainty plaguing investors.

Key Stocks to Watch

Several major stocks are making headlines today:

– Tesla (TSLA): Up 3.7% in premarket trading ahead of its first-quarter vehicle deliveries report scheduled for Wednesday. However, Tesla has had a difficult year so far, with its stock down more than 30% year-to-date and 10% in the last month alone. Analysts expect Tesla’s Q1 deliveries to be the lowest in more than two years.

– Nvidia (NVDA): The AI chip giant continues to face pressure along with other tech stocks as investors worry about companies’ spending plans for artificial intelligence amid economic uncertainty.

– Johnson & Johnson (JNJ): Fell 3% in premarket trading after a U.S. bankruptcy judge rejected the company’s $10 billion proposal to end tens of thousands of lawsuits alleging its baby powder and other talc products cause ovarian cancer.

– PVH Corp (PVH): Jumped about 17% after the apparel maker’s annual earnings forecast beat analysts’ estimates.

Upcoming Market Events

Several important economic events and earnings reports are scheduled for this week:

1. Manufacturing Activity Surveys (April 1): Today’s reports could offer fresh insights on the impact of tariffs on the U.S. economy.

2. JOLTS Job Openings Data (April 1): This data will provide information about the labor market’s health.

3. Trump Tariff Announcement (April 2, 3 pm ET): Expected to significantly impact market direction.

4. Tesla Q1 Deliveries Report (April 2): Will provide insights into the electric vehicle market.

5. Earnings Reports: Several companies are reporting earnings today, including Polestar Automotive (PSNY) and Evaxion Biotech (EVAX).

Looking ahead to late April and early May, major companies scheduled to report earnings include Apple (AAPL), Amazon (AMZN), Microsoft (MSFT), and Nvidia (NVDA).

Expert Opinions and Market Outlook

Despite current market challenges, some analysts see potential for improvement in Q2. Scott Wren, senior global market strategist at Wells Fargo Investment Institute, noted on Monday: “We saw the retest today; we might get a little bit of a bounce here. We want to buy while we’ve got a pullback.” He added, “We’re expecting some broadening out in both earnings and just stock performance this year.”

However, Fed officials have expressed concerns about the potential impact of tariffs. New York Fed President John Williams acknowledged risks that inflation could heat up again, while Richmond Fed President Thomas Barkin said he is nervous the Trump administration’s tariffs will push up prices and hurt the job market.

Conclusion

As we enter the second quarter of 2025, the stock market faces significant uncertainty driven primarily by tariff concerns. Investors are closely watching Wednesday’s tariff announcement, which could set the tone for market performance in the coming months. With major earnings reports on the horizon and ongoing economic data releases, market volatility is likely to continue as investors assess the potential impact of trade policies on corporate profits and economic growth.