• Trump considers more tariff exemptions
• Bank of America rises after earnings beat
• Oil holds steady as the oil demand outlook declines

Stocks Flat Amid a Wary Mood Amid More Tariff Exemptions

U.S. stocks opened modestly lower as sentiment remains fragile, with investors waiting for more corporate earnings and clarification about Trump’s trade tariffs.

Buyer enthusiasm has diminished after two consecutive days of gains, during which investors cheered certain exemptions from Trump’s trade policies. Yesterday, President Trump indicated he is considering temporary exemptions on vehicle import tariffs, offering some relief to key trade partners such as Mexico, Canada, and Europe. His remarks followed the administration’s decision to walk back some previously planned tariffs, including exclusions for electronics like smartphones and laptops, most of which are imported from China.

However, the Trump administration also said it is beginning an investigation into imports of pharmaceuticals and semiconductor products as it considers whether to impose tariffs on these sectors.

Meanwhile, Federal Reserve Governor Christopher Waller said that the inflationary impact of trade tariffs could be transitory. He highlighted concerns surrounding the growth outlook and warned that trade taxes could be one of the biggest shocks to affect the US economy in recent decades.

U.S. economic calendar is relatively light today. Attention is turning to Federal Reserve chair Jerome Powell , who will speak on Wednesday.

Corporate News

Bank of America (NYSE: BAC ) is rising after beating Q1 earnings expectations amid a boost in net interest income and thanks to volatile markets. Bank of America saw a 9% increase in trading revenue, mirroring trends seen as rivals image recent market turmoil. EPS was $0.90 as NII grew 3%.

Boeing (NYSE: BA ) will be in focus after China has ordered its airlines not to take any further deliveries of Boeing jets as part of the tit for tat trade war that saw U.S. President Trump lift taxes as high as 145% on Chinese goods.

Dow Jones forecast – Technical Analysis

The Dow Jones recovered from a low of 36,550, rising above 40,000 to a peak of 40,915. The price is consolidating just below here, around 40,350. Despite the recovery, the downtrend remains intact, with buyers needing to rise above 41k to negate the selloff. Above here, the 200 SMA comes into play. Failure to retake 41k, could see the price retest support at 40k, and 38.5k below here.

FX Markets – USD steadies, EUR/USD Falls

The US Dollar has steadied around a 3-year low as investors try to make some sense of President Trump’s constant changes to trade tariffs, keeping investors wary of the USD.

The EUR/USD is falling following weak economic sentiment data. The ZEW economic sentiment plunged to -18.5, marking its lowest level since December 2020, missing forecasts of 14.2. US import tariffs continue to undermine hopes of a robust recovery in the region. ECB President Lagarde will speak later.

GBP/USD is rising above 1.3225 after mixed UK jobs data. UK unemployment remained unchanged at 4.4%. However, vacancies fell below pre-pandemic levels in the first 3 months of the year, while employees on payroll fell by 78k in March, the largest drop since 2020.

Oil Struggles for Directcion as Oil Demand Outlook Slows

Oil prices are unchanged for a second day as investors digest the latest IEA outlook report. The agency believes oil demand will grow more slowly than expected, and U.S. oil production increases will also slow due to Trump’s tariffs on trading partners and retaliatory moves.

Trump’s tariffs combined with an increase in OPEC supply, spurred a sharp drop in oil prices last month, which means lower revenue for producers. Despite Trump’s efforts to increase drilling, the Trump administration’s policy could actually slow drilling.

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