Market Pulse with Dan Sheehan

Good Morning Investors,

Markets are still finding their footing after Wednesday’s sharp rally faltered overnight. Hopes that the trade war might de-escalate gave way to reality, as China made it clear there are no current talks underway and called for the U.S. to drop “unilateral” tariffs. That cast a chill over the rebound, pushing futures lower.

We remain in a range-bound market, with every uptick challenged by policy inconsistency. Still, there’s evidence we are closer to a resolution than not. My base case continues to be a stepdown in tariffs in the second half of the year. AI, resilient consumer tech, and stable macro data remain long-term positives.

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BEFORE THE BELL

Futures slipped early Thursday after China denied any ongoing tariff talks with the U.S., damping enthusiasm from Wednesday’s rally. Dow futures dropped 219 points (-0.6%), while S&P 500 and Nasdaq futures fell 0.4% and 0.3% respectively.

Wednesday saw the best session in weeks, fueled by Trump’s softened tone on Powell and China. But that optimism faded quickly. Treasury Secretary Scott Bessent’s remark that there was "no unilateral offer" and China’s direct dismissal of any negotiation talks reminded markets just how fragile sentiment remains.

Gold rebounded after Wednesday’s pullback, oil prices edged up slightly, and the dollar slipped modestly.

MARKET TIMING PERSPECTIVE

Historical market data backs up the idea that we may be in the late stages of this correction. According to CFRA’s Sam Stovall, the S&P has seen 24 corrections since WWII, typically taking 133 days to bottom and 113 days to recover. If April 8 was the low, this cycle is moving faster than average — just 48 days from peak to trough. Often, sharp corrections end quicker, especially when driven by policy shocks rather than macro deterioration. That said, it wouldn’t be unusual to see a retest of the lows before moving higher. Think 1987: the retest marked the bottom, and the market surged after. Today’s backdrop suggests a grind sideways for now — but the ingredients for a second-half rally are there.

EARNINGS WATCH

Investors will be laser-focused on Alphabet and Intel earnings after the bell. Alphabet isn’t expected to show a tariff impact yet, but investors want clarity on cloud margins and AI capex. Intel, under new CEO Lip-Bu Tan, will face scrutiny on its turnaround efforts amid a tricky macro backdrop and export controls.

In airline land, American Airlines and Southwest both pulled full-year guidance, citing tariff-driven uncertainty and softening demand. This marks a clear shift in the sector and may foreshadow further downward revisions across discretionary travel.

Meanwhile, PepsiCo and Procter & Gamble cut forecasts as consumer pressure builds. Both highlighted weakening volumes and rising input costs tied to tariffs. This could weigh on the broader consumer staples trade that had held up well year-to-date.

BITCOIN RESILIENCE CONTINUES

Bitcoin ETFs saw nearly $1 billion in inflows this week, signaling renewed confidence in crypto’s role as a macro hedge. BTC pushed past $93,000 and is now acting more like gold than a traditional risk asset.

The strength of Bitcoin relative to equities — especially the Nasdaq — is notable. In past cycles, BTC often bottomed and rallied ahead of tech stocks. That dynamic seems to be playing out again. If sustained, it could be a signal that growth appetite is returning, especially if macro conditions stabilize. Bitcoin’s role as a hedge, combined with ETF inflows and outperformance, suggests it’s being perceived less as a speculative asset and more as a foundational one for risk-aware portfolios.

CHINA SAYS NO TRADE TALKS UNDERWAY

In a blunt rejection of recent White House optimism, China’s Ministry of Commerce stated there are “absolutely no negotiations” currently ongoing and called for the cancellation of all unilateral tariffs. This contradicts Trump’s earlier suggestion of easing tariffs and casts doubt on near-term progress.

While the tone from Washington has softened, the lack of bilateral traction will likely keep markets on edge until more concrete steps are seen.

STOCKS TO WATCH TODAY

ANALYSTS' RECOMMENDATIONS

• AT&T Inc: RBC raises target to $30 from $28 after strong Q1 and broadband growth.

• Boeing Co: Morgan Stanley bumps to $185 from $175 citing better production and defense outlook.

• General Dynamics: TD Cowen lifts to $290 from $275 after broad segment strength.

• Texas Instruments: Jefferies cuts to $155 from $185 on valuation concerns.

• Thermo Fisher: Leerink lowers to $600 from $625 pending clarity on pharma tariffs.

STRATEGIC OUTLOOK

Markets are still stuck in the middle — between recession fears and optimism for policy normalization. My read is that we’re still correcting rather than entering a new bear phase. There’s too much capital on the sidelines, and when uncertainty lifts, we’ll see a surge in AI, semis, and digital infrastructure.

Today’s data may give a better sense of underlying demand: durable goods, home sales, and jobless claims will offer clues. But the real swing factor remains trade — and we’re not there yet. Still, if Powell stays put and tariffs ease even partially, the second half of 2025 could be a strong one.

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Please feel free to reach out to me on LinkedIn or by email if you would like help navigating this market environment or have any planning-related questions.

Dan Sheehan

[email protected]

This newsletter is for informational purposes only and should not be considered as investment advice. Please consult with your financial advisor about your specific situation.