Donald Trump's Tariff Wars Crash Global Markets, Stock Company News and Geopolitics
Stock market news
• US stock indices fell by 1-2% and are getting close to support levels. NVDA fell by 7% after a good report. As did some other AI stocks and MAG-7. Market sentiment has turned bearish. This means that there may be more pain ahead for investors.
The XLF, XLE (thanks to higher oil prices), and XLRE (thanks to lower mortgage rates) sectors held on to positive territory yesterday.
Bitcoin fell below $80,000.
The US dollar strengthened – EUSUSD 1.04.
Gold fell by 1.5% below $2900.
Oil rose by 2%.
The Trump market is not going as many investors had hoped. And the disappointment is painful for many.
• Europe is feeling the effects of the threat of 25% US tariffs, with stocks falling yesterday and futures pointing to further losses today, while the euro fell to lower two-week lows against the dollar.
• The Canadian currency's massive slide shows no signs of slowing as it hit a new three-and-a-half-week low, with Trump clarifying that 25% tariffs will still be in place for next week, after previously appearing to suggest another one-month extension to the deadline.
• The market reaction in China to the threat of an extra 10% tariff has been more complex, partly because of the timing. China's powerful National People's Congress meets next week, and in a meeting that initially produced little, analysts now say more stimulus may be imminent.
• The biggest currency casualties of Trump's tariff threats on China have been the Australian and New Zealand dollars, which often act as more liquid substitutes for the yuan. The yuan itself is bouncing off multi-week lows, and the People's Bank of China set its official rate slightly tighter for the first time this week, showing it intends to support the currency.
Hong Kong shares (.HSI) opens a new tab fell about 1.7% on Friday, but mainland blue chips (.CSI300) opens a new tab fell a relatively paltry 0.5%. Compare those declines with nearly 3% drops in Japan's Nikkei (.N225) opens a new tab and South Korea's Kospi (.KS11) opens a new tab .
• Tokyo's stock exchange felt additional pressure from a strong yen, with the traditional safe-haven currency the only one to rise significantly against the dollar on Friday.
The dollar-yen pair also tended to track U.S. Treasury yields, which fell to fresh two-week lows as traders pondered the potential damage from the global trade war to the American economy, which has already shown signs of vulnerability of late.
• A key report is due later today in the form of the PCE deflator, the Fed's preferred measure of inflation. Traders have been steadily raising bets on the Fed's dovish policy, with the two quarter-percentage-point rate cuts recently priced into the market now likely to happen in June and September.
• It is the ECB that opens the next round of global central bank meetings with a policy decision next week, with many expecting another quarter-percentage point cut. What will happen after that is less clear, with some policymakers signalling the pace of easing will slow.
There is plenty of economic data coming out of Europe today, including import prices, retail sales, employment and consumer inflation figures from Germany alone.
With European stock futures heading steadily lower, tech will be a close watch. Asian bourses are suffering from a pent-up sell-off following Nvidia earnings earlier in the week, which has done little to allay fears that valuations have become unsustainably high, especially after the emergence of a seemingly lower-priced Chinese AI rival, DeepSeek.
• Crypto bulls are also taking a beating, with Bitcoin briefly dipping below $80,000, down 27% from its record high of $109,071.86 on January 20. As Trump has focused more on trade and immigration in his first month in office, the $Trump and $Melania memes have been the most talked about in the crypto world. Lighter regulation and even a strategic crypto reserve could still be coming, but it’s clearly not yet.
• Fidelity: Number of 401(k) millionaires up 27%.
• Nvidia (NVDA) said Musk's xAI will use the GB200 to train and infer the next generation of Grok AI models.
• The DAX has had one of the best starts in history. Its structure has changed - its dependence on the auto industry has decreased. The main buyer is CTAs (trend strategies), so weak economic data has almost no impact.
• Instagram is considering a standalone Reels app amid TikTok's uncertain future - The Information.
According to the publication, Instagram chief Adam Mosseri told employees this week about a potential split of the service.
• Amazon (AMZN) unveiled its first quantum chip.
• Fed's Schmid:
I'm cautious on inflation because of lack of progress;
We may have to rethink the concept of core inflation as once-volatile food prices now behave like other commodities;
My priority is to shrink the Fed's balance sheet and fiscal influence as much as possible;
Focus must remain on inflation to protect the Fed's credibility.
• The largest shareholder of Ferrari (RACE), the Agnelli family, has decided to sell its stake in the car company for 3 billion euros. After the sale, the Agnelli family will reduce its stake in Ferrari by 4% to 20%.
• Snowflake (SNOW) shares saw a significant pre-market surge of about 13% after fourth-quarter results beat expectations. The company, which provides a cloud-based data platform, wowed Wall Street with its results and continues to grow thanks to new product capabilities. Snowflake’s partnership with Microsoft (MSFT) to integrate OpenAI models further strengthens its platform’s competitive advantage.
SNOW shares rose 4.5% yesterday.
• Verizon (VZ) faces potential trouble as the Federal Aviation Administration considers canceling a $2 billion contract for Elon Musk's Starlink.
• Viatris (VTRS) shares fell 15% on a disappointing full-year outlook. The generic drugmaker is struggling with refurbishment work at its India plant, impacting its revenue and adjusted EBITDA forecasts for 2025. The issues stem from FDA warnings and subsequent supply blockages.
• Meta (META) has apologized after an Instagram outage resulted in users seeing graphic videos in their feeds.
The company has since fixed the bug and reiterated its commitment to content moderation, ensuring sensitive content is properly labeled or removed.
• Rithm Property Trust (RITM) announced a $50 million Series C preferred stock offering with proceeds to be used for investments and corporate purposes.
• Rolls-Royce (RYCEY) soars to all-time high after resuming shareholder payouts and announcing £1bn share buyback
The company reported strong underlying operating profit growth above guidance range and expects to meet its medium-term targets two years ahead of schedule.
• There is a surge in bearish sentiment among individual investors, with the American Association of Individual Investors reporting a jump to 60.6%, the highest level in two years.
• Chubb (CB) maintained its quarterly dividend, offering a forward yield of 1.33%. The resilient insurance leader continues to demonstrate strong financial health, with its recent earnings topping consensus estimates.
CB shares rose 3%.
• Novavax (NVAX) reported a big drop in fourth-quarter sales on Thursday and said it no longer wants to be known as just a vaccine maker. The company will shift from developing products to partnering with larger pharmaceutical companies and licensing its drug technology.
• Investors see 2017-like rally for emerging market currencies, Bloomberg reports.
Investors are turning bullish amid signs of a turning point in the U.S. dollar.
• eBay (EBAY) disappointed investors with a weak outlook as weak demand in Germany and the UK weighed on profits.
EBAY shares fell 8%.
• Salesforce (CRM) issued lower-than-expected revenue growth guidance, raising doubts about how quickly its AI products can be monetized.
CRM shares fell 4%.
• Walgreens Boots Alliance (WBA) received a boost after news that the company could be bought out by investment fund Sycamore Partners, which could lead to a restructuring of the business.
WBA shares rose 2%.
• Paramount Global (PARA) reported weak financial results as growth in the streaming segment failed to offset a decline in revenue from traditional television.
• JM Smucker (SJM) reported disappointing sales due to supply chain issues, but remains upbeat in its full-year outlook.
• IONQ shares fell 15% yesterday after the report, crushing all “quant” stocks. The company’s annual revenue exceeded $43.1 and grew by 95% y/y.
• But IonQ reported a widening quarterly loss, dwindling cash reserves and rising operating expenses.
And investors don't like burning cash right now.
IonQ aims to be profitable by 2030.
• VST shares fell 12% yesterday after the report. The report was good, but investors are increasingly worried about the end of the AI rally.
• OpenAI has launched a new model, GPT-4.5. Altman says it's "the first model that makes me feel like I'm talking to a human being who cares." That's
an improvement over GPT-4o — three times better at getting facts right and nearly three times less likely to make things up.
• Tesla (TSLA) is preparing to launch a taxi service in California that will be able to transport passengers in self-driving vehicles throughout the state - WAPO.
• Autodesk (ADSK) will cut about 9% of its workforce, or about 1,350 employees, amid a broader effort to prioritize cloud services and artificial intelligence.
Stocks in premarket after reports
ADSK +1%
DELL -1%
HPQ -4%
RKLB -13%
Key events that could impact markets on Friday:
- US PCE Price Index
- Germany Import Prices, Retail Sales, Unemployment Rate, CPI
- France GDP, CPI
- UK House Prices nationwide
- Sweden GDP
Fundamental news
• US Labor Market, Activity and GDP Indicators
Unemployment Claims 242K (exp. 222K/pop. 220K adjusted)
Initial jobless claims surged, better than expected. The rise reflects ongoing economic uncertainty as jobless claims came in slightly below consensus.
Durable Goods Orders 3.1% (exp. 2.0%/ pop. -1.8% adjusted)
GDP q/q (Q4) 2.3% (exp. 2.3%/ pop. 3.1%)
GDP Price Index q/q (Q4) 2.4% (v. 2.2%/ pop. 1.9%)
• The European Central Bank will cut its deposit rate again next week to 2.50%, according to all 82 economists polled by Reuters, who had expected two more cuts by the middle of this year.
Almost all respondents to a follow-up question in the survey said that a widening of US President Donald Trump's trade war would hurt eurozone growth, potentially leaving the ECB in a dilemma.
• Social Security Administration announces “massive” reorganization, “significant” job cuts
SSA has about 60,000 employees. The cuts will amount to between 7,000 and 30,000 employees — or half the agency.
The Social Services Administration previously said it would close two of its offices, the Office of Civil Rights and Equal Opportunity and the Office of Transformation.
As of 2024, SSA oversees Social Security benefits for more than 68 million people. The agency has about 1,200 field offices across the country.
• The talks between the US and Russian representatives lasted more than six hours. However, after the meeting, the Russian delegation left the negotiating venue without giving any comments. This was reported by the Kremlin media.
Preliminary, the main topic of the meeting was the issue of "normalizing the work of the embassies" of the two countries. However, the details of the discussions are still unknown.
• US President Donald Trump announced that he is introducing an additional 10% tariff on China, which will take effect on March 4.
Tariffs will also be introduced on Mexico and Canada on that day.
• US and Russia consider cooperation on Arctic trade routes and resource exploration - Bloomberg.
• The US expects the agreement with Ukraine on rare earth metals to bring in $20 billion in profits, which could be used to pay off the US budget deficit and reduce the tax burden on Americans, according to White House National Economic Council Director Kevin Hassett.
• The White House has formally directed government agencies to prepare reorganization plans that include major cuts.
The agencies must submit these plans no later than March 13.
• $1 billion will be allocated to combat the egg shortage in the United States. Trump considers the egg problem a priority.
The US Department of Agriculture announced this measure due to the fact that prices for this popular food product have increased by more than 50%. The main reason for the shortage was the bird flu epidemic that began on American poultry farms in 2022 and led to the destruction of egg-laying poultry. Due to the ban on the use of a foreign vaccine in the United States, this method of combating the epidemic remains the only one even if even a single infection is detected on a farm.
• Iran doubles stockpile of highly enriched uranium since December: IAEA expresses 'grave concern'.
Since Donald Trump's return to the White House, Tehran has sharply increased its stockpile of highly enriched uranium, up to 60%, doubling its stockpile since December last year. That could be enough uranium to make six nuclear bombs.
• Republican lawmakers are pushing deliberately impassable legislative initiatives to curry favor with Trump - WSJ. Among the proposals: declaring Trump's birthday (June 14) a federal holiday, naming the Dallas airport near Washington after him, placing his face on Mount Rushmore.
• We see that the question of what the European security architecture should be without NATO is now a subject of discussion among European leaders.
The European security architecture will not be strong without a strong country like Turkey, - Turkish Foreign Minister Hakan Fidan.