ASX Set to Rise as Wall Street Surges

On March 25, 2025, afternoon trading saw a strong upward movement in stocks as Wall Street works through the ongoing challenges of a trade conflict. The S&P 500 index climbed 1.4 percent, marking the end of a four-week decline with its first positive week.

The Dow Jones Industrial Average increased by 442 points, a 1.1 percent rise, while the Nasdaq composite experienced an impressive 1.9 percent surge. This renewed enthusiasm on Wall Street sets a positive tone for the opening of the Australian sharemarket, with futures indicating an anticipated rise of 28 points, or 0.4 percent, for the ASX.

Investors remain cautious as they keep an eye on how tariffs could affect inflation, consumer spending, and economic growth. Fluctuations in the market have been tied to announcements regarding tariffs, which have led to waves of optimism and concern. A new set of tariffs scheduled for April 2 could be postponed or modified, prompting speculation about their true impact.

Ulrike Hoffmann-Burchardi, Chief Investment Officer of Global Equities at UBS Global Wealth Management, noted that the exact scope of these tariffs is unclear, and potential retaliatory measures could escalate tensions and market volatility in the weeks ahead.

Monday's gains were widespread, with over 80 percent of S&P 500 stocks showing positive movement across each sector of the index. The technology sector played a significant role in this surge, affecting the market's overall direction. Major tech players like Apple and Nvidia contributed to this rally, with Nvidia rising by 3.2 percent and Apple increasing by 0.5 percent.

Additionally, Tesla saw a remarkable gain of 9.9 percent, the highest among S&P 500 stocks, although its year-to-date performance shows a decline of around 30 percent, reflecting concerns over customer reactions to spending cuts initiated by CEO Elon Musk.

Conversely, the genetics testing firm 23andMe faced a severe downturn, losing more than half its value following the announcement of its voluntary bankruptcy proceedings.

The building materials company AZEK Co. surged by 14.7 percent after revealing plans for an acquisition by James Hardie Industries in a cash-and-stock deal valued at approximately $8.75 billion.

This acquisition marks the second significant deal in the building sector in less than a week, following QXO Inc.'s announcement of its purchase of Beacon Roofing Supply Inc. for about $11 billion.

In the bond market, Treasury yields saw an increase, with the yield on the 10-year Treasury note rising from 4.25 percent to 4.31 percent, indicating a growing interest in fixed income investments.

European and Asian markets presented mixed results amid this backdrop of uncertainty. Notably, Chinese Premier Li Qiang adopted a conciliatory stance during discussions with US Senator Steve Daines, who is a supporter of the Trump administration and the first Congressional member to visit Beijing since Trump's inauguration.

This week in Wall Street will be pivotal, as several economic updates are scheduled. The Conference Board will release its consumer confidence survey for March on Tuesday, with predictions of a slight dip in consumer confidence levels. Furthermore, on Friday, the US government will issue the personal consumption expenditures (PCE) price index for February, a significant indicator of inflation closely monitored by the Federal Reserve.

With recent reports highlighting a resilient economy, growing consumer caution has emerged alongside persistent inflation, resulting in a more measured approach from the Federal Reserve. Following interest rate cuts at the end of 2024 to combat high inflation, the Fed remains hesitant to make further reductions until the effects on inflation and the broader economy become clearer.

Lower interest rates generally ease borrowing costs and stimulate growth, but they can also contribute to rising inflation, a balancing act that the Fed is currently managing.

Stocks, Trading, Markets