The ASX 200 is falling but stocks tell a different story

There isn't a positive headline in sight after Trump's sweeping tariffs. But what is supposed to happen when the world's largest economy unleashes $600 billion worth of tariffs on its global trade partners?

While the headlines and analysts say one thing, many stocks are doing the complete opposite.

The S&P/ASX 200 is down just 0.97% as at 2:00 pm AEDT, up from session lows of -2.10%. If it closes at this level, it would mark the eighth-worst session of the year — a relatively modest dip given the scale of the tariff shock. Zooming in, individual stocks are showing even greater resilience.

The chart below highlights the intraday price action for several large-cap stocks across various sectors, including tech, financials, and resources.

Intraday (Thursday, 3 April 2025) chart for Pro Medicus (red), Commonwealth Bank (green), CSL (purple), BHP (orange), JB Hi-Fi (yellow) and Woodside (blue) | Source: TradingView

Pro Medicus (red) opened 2% lower but has been climbing since 10:45 am AEDT, now up 2.2% for the day.

Likewise, Commonwealth Bank (green) also staged a recovery, opening down 1.7% but rallying to breakeven by mid-afternoon. This is notable for a stock trading at a lofty 27x price-to-earnings ratio, especially since most analysts project flat earnings growth over the next two to three years. Investors appear to be seizing the dip as an opportunity, even in richly valued names.

Below-average volumes

Despite the price gains, trading volumes tell a more cautious story.

Pro Medicus for example has had approximately 192,000 volume as at 2:10 pm AEDT compared to its 20-day average of 283,000 shares. 33% less than usual, but still with 33% of the session to go.

Likewise with Commonwealth Bank, its volumes are currently sitting at 1.02 million compared to its 20-day average volume of 2.16 million or 52% less than usual.

With two hours left in the session, volumes could still rise, but the current levels suggest a lack of strong conviction and liquidity behind these moves. The rally may reflect stocks bouncing from oversold levels, but the muted participation hints at underlying uncertainty.

Australia dodged a bullet

Australia appears to have dodged the worst of the tariff storm — for now. Less than 5% of its exports, equivalent to about 1% of GDP, go to the U.S.

"The impact from today’s announcement remains modest at the aggregate level, although will disproportionately impact some industries such as agriculture (specifically beef and other meats, which is Australia’s largest export to the US)," said RBC Capital Markets’ Chief Economist Su-Lin Ong.

Interestingly, shares in Australian Agricultural Co (ASX: AAC), which owns and operates Australia's largest cattle herd, are trading 1.0% higher after opening down 3.0% this morning.

"However, the bigger threat comes from the threat to global growth, particularly in China and Asia, which will likely result in less demand for our exports," noted AMP Chief Economist Shane Oliver.

Volatility is the game

Today’s intraday strength offers a glimmer of hope, but it’s just one session in what promises to be a prolonged period of uncertainty. Trump is expected to roll out additional sectoral tariffs in the coming days and weeks, targeting industries like semiconductors, pharmaceuticals, and critical metals.

While the ASX 200 has held up better than expected, there’s no guarantee that US markets — or global markets — will follow suit. This market is far from easy to navigate. Investors should brace for continued volatility, with whipsaw price action likely to persist as tit-for-tat tariff announcements and economic fallout unfold. Today’s resilience is encouraging, but it’s too early to call it a trend in a landscape where uncertainty reigns supreme.