Market Data 
- The Dow Jones briefly rallied on Tuesday before falling back to the 38,000 level.
- Equities are struggling to regain their footing after getting obliterated by the Trump administration’s tariff announcements last week.
- “Reciprocal” tariffs, as well as additional tariffs on China, are due to take effect at midnight EST.
The Dow Jones Industrial Average (DJIA) fumbled an early recovery on Tuesday, briefly crossing above 39,000 before slumping back to the 38,000 handle as markets brace for tariff kick-off following the Trump administration’s “Liberation Day” tariff announcements last week. The Dow Jones is still trading in recovery territory following one of the worst three-day runs in US market history, however, topside momentum remains limited.
The Trump administration’s wide array of “reciprocal” tariffs are slated to come into effect at midnight EST on April 9, but apparently, this wasn’t fast enough for additional counter-retaliatory tariffs on China. According to White House Press Secretary Karoline Leavitt, the US’s steep 104% package of tariffs came into effect as of noon EST on Tuesday in response to China’s 34% counter-tariff in response to the US’s own 34% reciprocal tariffs announced last week. United States (US) President Donald Trump flew into a tailspin when China retaliated against his tariff package, immediately announcing an additional 50% tariff on top of all of the other import levies already set to be imposed on Chinese goods being imported into the US.
Tariff stress bolsters rate cut hopes
As tariff stress continues to weigh on markets, interest rate watchers are continuing to ramp up their bets of additional Federal Reserve (Fed) easing in 2025. According to the CME’s FedWatch Tool, rate traders are now pricing in 125-150 bps in rate cuts over the next 12 months, with 100 bps expected by the end of the year. Rate traders are also ramping up their bets of a quarter-point cut as early as May, with the majority of rate bets set on a first cut in July.
US economic data takes on new importance later this week, with US Consumer Price Index (CPI) inflation due on Thursday, followed by Producer Price Index (PPI) inflation and University of Michigan (UoM) Consumer Sentiment survey results slated for Friday. The latest round of inflation and sentiment data still won’t include any direct fallout from the Trump administration’s announced tariffs, however the most recent batch of economic data will serve as important “bellwether” readings before tariff impacts begin to bleed over directly into the economy.
Stock news
US stock markets are overall higher than they were on Monday, but bullish momentum is running out of gas quickly. The financial and tech sectors recovered some ground on Tuesday, but tariff-sensitive sectors like building materials and energy providers are still languishing on the bearish side.
Notable gainers on Tuesday include JPMorgan Chase & Co (JPM), which rose 3% to $221 per share, followed by Boeing (BA) and Nvidia (NVDA), which both rose around 2.7% to $143 and $100 per share, respectively. On the low side, Merck & Co (MRK) and Nike (NKE) both fell around 2.3%, with Merck & Co slipping below $80 per share and Nike falling to $54 per share.
Read more stock news: UnitedHealth Group stock shoots up on Medicare Advantage rate hike proposal
Dow Jones price forecast
The Dow Jones Industrial Average appears to have found a technical floor from the 37,000 handle, but the major equity index isn’t out of the woods yet. DJIA bids are still trading steeply off of all-time highs just above 45,000, with the Dow Jones down over 15% from the peak.
A recovery play may be on the cards if upside momentum is able to keep the wheels on the road. However, stiff technical price ceilings are in play at the last swing low below 41,000 and the 200-day Exponential Moving Average (EMA) near 42,000.
Dow Jones daily chart
Economic Indicator
Consumer Price Index (YoY)
Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as The Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The YoY reading compares the prices of goods in the reference month to the same month a year earlier.The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
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