Expectations for Tariff Relief Ease Economic Slowdown Concerns…Nasdaq Up 0.4% [New York Stock Market Briefing]

The major indices of the New York stock market rose slightly. It seems that expectations for 'tariff policy flexibility' had a positive impact on investor sentiment. However, concerns about an economic slowdown remain, as evidenced by the sharp decline in the U.S. consumer confidence index.

On the 25th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 42,587.5, up 4.18 points (0.01%) from the previous session. The Standard & Poor's (S&P) 500 index closed at 5,776.65, up 9.08 points (0.16%) from the previous session, and the Nasdaq index rose 83.26 points (0.46%) to close at 18,271.86.

Early in the session, the U.S. consumer confidence index for March was released. According to the U.S. Conference Board (CB), the March consumer confidence index recorded 92.9. This figure is below the market expectation of 94 and represents a 7.2-point decline compared to the February consumer confidence index of 100.1. It is the lowest level since January 2021.

The March expectations index also fell 9.6 points from the previous month to 65.2, hitting a 12-year low. The present situation index fell 3.6 points from the previous month to 134.5. Stephanie Giccad, a senior economist at CB, analyzed, "All major components of the consumer confidence index declined," adding, "Expectations for future economic prospects and the job market have particularly deteriorated sharply."

The U.S. Department of Commerce announced that new home sales in February were at an annualized rate of 676,000 units, up 1.8% from the revised figure for the previous month (664,000 units), but below the market expectation of 680,000 units.

However, investors focused more on expectations for tariff policy relief than on the deterioration of consumer confidence. After the consumer confidence announcement, the stock market, which had been sluggish, regained momentum in the afternoon and ended with a slight rise.

U.S. President Donald Trump suggested in the afternoon that tariffs imposed on Canada and Mexico could be eased, stating, "Canada and Mexico have made a lot of progress." President Trump is pressuring the Canadian and Mexican governments to control the distribution of the drug fentanyl within the U.S., warning that if a satisfactory level is not achieved, high tariffs will be imposed.

Excluding Nvidia, the 'Magnificent 7' rose. Apple, Amazon, Meta, and Alphabet showed strong gains of over 1%, and Tesla rose 3.5% on the day. Tesla had surged 11.93% the previous day, marking the largest increase since the 2024 election. Despite news that February sales in the European market fell 40% year-on-year, Tesla fluctuated around the break-even point early in the session but expanded its gains in the afternoon.

U.S. home construction specialist KB Home saw its stock price drop more than 5% after revealing quarterly results that fell short of market expectations. Walmart fell 3.1% amid reports of price conflicts with Chinese suppliers. The deterioration in the consumer confidence index also appears to have had an impact. Mobileye rose 8.7% after forming a new partnership with Volkswagen's parts supplier Valeo.

According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the probability of the federal funds rate remaining unchanged by the end of June in the federal funds futures market fell slightly to 32.8% compared to the previous day's close. Instead, the probability of a 25 basis point (1bp = 0.01% point) cut rose slightly to 59.7%.

Jin Young-ki, Hankyung.com reporter young71@hankyung.com