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10 Companies With Exposure To Trump's China Tariff War: Ford, Tesla, Apple, Disney And More

Benzinga News — Fri, 11 Apr 2025 13:29:18 -0400

President Donald Trump raised tariffs on Thursday, increasing the price of Chinese imports to a minimum of 145%. The move combines a 125% reciprocal tariff increase with pre-existing 20% duties.

The trade war shows no signs of slowing down as China responded on Friday morning with a retaliatory tariff now standing at 125% on U.S. imports.

Here's a look at which companies are most exposed to China and could be impacted by the ongoing trade war.

A recent report from Strategy Risks ranks the largest publicly traded American companies with overexposure to China based on the following criteria: Business Fundamentals, Partnerships and politics, Regional Issues, Supply Chain, and Capacity.

Ford Motor Co. (F ) ranked in the top position as most overexposed to China with high scores in all criteria, especially Regional Issues (linked to human rights abuses and forced labor practices) and Supply Chain.
Carrier Global Corp. (CARR ) dominates China's commercial HVAC sector and operates 11 manufacturing sites, 5 R&D centers and over 300 sales/service branches in the country.
Apple, Inc. (AAPL ) produces 90% of iPhones, 70% to 80% of iPads and 50% of Mac products in China, according to Wedbush. Tech analyst Dan Ives recently said Apple "is in the eye of this storm," referring to the trade war with China.
Tesla, Inc. (TSLA ) U.S. energy business faces existential risks due to tariffs on Chinese battery cells which could double production costs for Powerwalls and Megapacks, according to Electrek.
Coca-Cola Co. (KO ) faces rising costs due to tariffs on critical raw materials like sucralose, sourced from U.S. and Chinese suppliers. The company noted in its 2024 annual report that tariffs could reduce profitability if price hikes fail to offset higher costs.
Cummins, Inc. (CMI ) has a significant presence in China through strategic investments, joint ventures and innovation initiatives, particularly in clean energy and engine manufacturing.
RTX Corp. (RTX ) said in 2023 that decoupling its supply chains from China was unrealistic. Former CEO Gregory Hayes said RTX had "several thousand" Chinese suppliers, and told the Financial Times that, "we are not in a position to pull out of China the way we did out of Russia."
Honeywell International Inc. (HON ) faces significant supply chain disruptions due to its large presence in China and heavy reliance on imported components. In March, following the initial tariff increases, Honeywell implemented a 6.4% tariff surcharge on Building Management System (BMS) products, and more surcharges are likely to follow as the trade war escalates.
Walt Disney Co. (DIS ) CEO Bob Iger has expressed significant concerns about the impact of U.S. tariffs on Chinese imports, warning of broader economic consequences and specific challenges for Disney's operations.
Caterpillar, Inc. (CAT ) faces significant challenges due to the escalating trade tensions, which have eroded the company's competitiveness in China. This is prompting buyers to seek alternative suppliers and forcing Caterpillar to reassess export strategies.

Trump's 'Tarifflation' In The Spotlight As Markets Shrug Off Cool Inflation Data, Economist Says

Benzinga News — Fri, 11 Apr 2025 13:29:11 -0400

Another indicator of slowing inflation came in on Friday morning with a cooler-than-expected Producer Price Index that fell 0.4% month-over-month in March. On an annual basis, producer inflation slowed to 2.7%, well below economists' estimates of 3.3% and down from 3.2% in February.

Economists are weighing in on the significantly lower inflation data that the market is ignoring.

Jamie Cox, managing partner for Harris Financial Group, clearly expressed that markets are more concerned with the escalating U.S.-China trade war than they are with the most recent inflation data.

"Disinflation should be dominating the headlines right now, but no one is paying attention. The potential inflation shockwave is covering over all other data," Cox said.

Bill Adams, chief economist for Comerica Bank, said that even though March's PPI reading surprised to the downside, "tarifflation will be much more important for the outlook than backward-looking data." The economist warned that if tariffs remain in effect, inflation will be much higher in the coming months.

Chris Zaccarelli, chief investment officer for Northlight Asset Management, also noted the improvement in inflation, but warned that the U.S. is not out of the woods in the trade war.

"Clearly if deals start getting done then that's a move in the right direction, but if three months go by and little progress is made on the trade-front then we may find ourselves right back where we started, with global markets in freefall," Zaccarelli said.

Frog Capital, a financial news and analysis account on X, pointed to Friday's PPI numbers as representative of a possible recession and that the Federal Reserve is misreading.

Markets React: All three major indexes were red on Friday after China responded with tariffs of 125% on U.S. imports. The SPDR S&P 500 ETF Trust (SPY ), tracking the S&P 500, was down 0.16% and the Invesco QQQ Trust (QQQ ), tracking the Nasdaq 100 index, fell 0.093% in Friday's midday trading.

Fed's Kashkari Flags Waning Confidence: US 'No Longer Is The Most Attractive' To Global Capital

Benzinga News — Fri, 11 Apr 2025 13:28:55 -0400

In a CNBC interview Friday, Minneapolis Federal Reserve President Neel Kashkari raised concerns that investor sentiment may be shifting away from the U.S., citing unusual market movements amid ongoing trade tensions.

What To Know: Treasury yields have surged while the dollar has weakened-an atypical reaction during geopolitical uncertainty. "Normally, when you see big tariff increases, I would have expected the dollar to go up. The fact that the dollar is going down... lends some more credibility to the story of investor preferences shifting," Kashkari told CNBC's Squawk Box.

Kashkari noted that global investors have long viewed the U.S. as a safe haven, but that perception may be changing. "If the trade deficit is going to go down, it could be that investors are saying, OK, America no longer is the most attractive place in the world to invest," he told CNBC, adding that higher bond yields could be a reflection of this shift.

What Else: The interview Friday came amid new inflation data showing a 0.4% drop in March's Producer Price Index-its steepest monthly decline since 2023-yet Treasury yields rose sharply.

The 10-year yield this week climbed to 4.50%, and the 30-year reached 4.92%, defying expectations of a fall amid disinflationary signals.

Despite not voting on the Federal Open Market Committee this year, Kashkari emphasized his focus remains on keeping inflation expectations anchored, stating, "We're seeing stresses, but not dislocations."

Trump's 25% Tariffs Could Cost Auto Companies $108 Billion: Report

Benzinga News — Fri, 11 Apr 2025 13:28:50 -0400

The Trump administration announced a 90-day halt on most tariffs, sending global stocks on the rise after a period of uncertainty. However, U.S. President Donald Trump has refused to implement a halt on the 25% Tariffs on the automotive sector, much to the criticism of stakeholders in the automotive industry as well as policymakers.

What happened: In a new report published by Michigan-based Center for Automotive Research, the organization highlights how the Trump administration's 25% tariffs on the auto sector could cost the industry over $108 billion.

The report also shows that the administration's tariffs will cost the three Detroit-based auto manufacturers, namely General Motors Co (GM ), Ford Motor Co. (F ), and Jeep and Chrysler parent company Stellantis NV (STLA ) nearly $42 billion.

Why it matters: The tariffs imposed on the Auto sector have forced companies to rethink their strategies. Stellantis scaled back on production in Canada and Mexico, which affected over 5 plants in the U.S., as the company also temporarily laid off 900 employees. Reports also suggest that General Motors has increased truck output at a plant in Indiana.

CAR says the study emphasizes the complexity of the modern automotive supply chain. Dr. K. Venkatesh Prasad, who is the Senior Vice President and Chief Innovation Officer at CAR, said, "automakers and their suppliers are often multinational companies with facilities spread out across the world, making it difficult to discern how much of a vehicle is domestically produced."

This study comes in as the Trump administration shows no sign of backing down from its trade war with China, imposing a 125% tariff on Chinese goods. China responded with 84% tariffs on U.S. imports. The White House handle also shared a post on the social media platform X, warning countries to 'not retaliate'.

Price action: STLA stock experienced a 30.28% year-to-date decline, currently trading at $8.91, according to Benzinga Pro data.

'Economy Is Facing Considerable Turbulence:' JPMorgan Chase CEO Jamie Dimon Cautions About 'Negatives Of Tariffs And Trade Wars'

Benzinga News — Fri, 11 Apr 2025 13:28:45 -0400

JPMorgan Chase & Co. (JPM ) shares traded higher premarket after the company reported its first-quarter FY24 results, but they eventually gave up all the gains and traded in the red.

Reported revenue rose 8% year-on-year (Y/Y) to $45.3 billion. Net revenue (managed) was $46.0 billion (+8% Y/Y), beating the consensus of $44.1 billion.

Consumer & Community Banking (CCB) revenue rose 4% Y/Y to $18.3 billion, and Commercial & Investment Bank (CIB) revenue was $19.7 billion (+12% Y/Y) in the quarter.

Investment Banking revenue was $2.3 billion, up 2% Y/Y, in the quarter. Investment Banking fees rose 12% Y/Y to $2.2 billion, led by higher debt underwriting and advisory fees.

Asset and Wealth Management revenue was $5.73 billion (+12% Y/Y), and Corporate revenue stood at $2.30 billion (+5% Y/Y) in the quarter.

In AWM, Assets under management stood at $4.1 trillion, and client assets stood at $6.0 trillion (up 15%), driven by higher market levels and continued net inflows.

Net interest income rose 1% year over year to $23.4 billion in the quarter. Net interest income excluding Markets stood at $22.6 billion, down 2% year over year due to lower rates and deposit margin compression, along with lower deposit balances in CCB.

Noninterest revenue was $22.6 billion, up 17% Y/Y, in the quarter. Noninterest revenue, excluding Markets, increased 20% Y/Y to $13.8 billion.

Excluding the $588 million First Republic-related gain, noninterest revenue excluding Markets was up 14%, led by higher asset management fees in AWM and CCB, increased investment banking fees and lower net investment securities losses. Noninterest expense upped 4% Y/Y to $23.6 billion in the quarter.

Markets revenue was $9.7 billion, up 21% Y/Y, primarily driven by higher Equity Markets revenue.

Average loans rose 1% Y/Y and down 1% quarter-over-quarter (Q/Q); average deposits were down 2% Y/Y and flat Q/Q.

In CCB, Debit and credit card sales volume increased by 7% year over year, and active mobile customers were up 8% year over year. In CIB, Market revenue rose 21% year over year, with Fixed-Income Markets increasing 8% year over year and Equity Markets up 48% year over year in the quarter.

JPM's provision for credit losses was $3.3 billion (+75% Y/Y), including net charge-offs of $2.3 billion and a net reserve build of $973 million.

Net income rose 9% Y/Y to $14.6 billion in the quarter. EPS of $5.07 exceeded the consensus of $4.62. The company witnessed a First Republic-related gain of $588 million in Corporate ($0.16 increase in EPS).

The CET1 capital ratio stood at 15.4%, and the advanced CET1 capital ratio was 15.5%. The bank's capital distributions included a dividend per share of $1.40 and $71 billion of common stock net repurchases.

Outlook: JPMorgan expects FY25 net interest income, excluding Markets, of ~$94.5 billion and project card services NCO rate of ~3.60%.

Jamie Dimon, Chairman and CEO, said, "In CCB, the franchise continued to acquire new customers at a robust pace, opening 500,000 net new checking accounts and adding record first-time investors in wealth management. Finally, AWM had healthy AUM net inflows of $90 billion, and investment performance remained strong."

"The economy is facing considerable turbulence (including geopolitics), with the potential positives of tax reform and deregulation and the potential negatives of tariffs and "trade wars," ongoing sticky inflation, high fiscal deficits and still rather high asset prices and volatility," he added.

Price Action: JPM shares are down 0.84% at $225.20 premarket at the last check Friday.

Hollywood Becomes Collateral Damage In Trump Tariff War As China Slashes Film Imports, Says US Actions Will Inevitably Reduce 'Favorability' Towards American Films

Benzinga News — Fri, 11 Apr 2025 13:27:49 -0400

China announced on Thursday it would immediately restrict Hollywood film imports in retaliation for President Donald Trump's tariff increases on Chinese goods, targeting a high-profile American export as trade tensions intensify.

What Happened: A spokesperson for the National Film Administration said, "The wrong move by the U.S. government to abuse tariffs on China will inevitably further reduce the domestic audience's favorability towards American films. We will follow market rules, respect the audience's choice, and moderately reduce the number of American films imported."

The move could significantly impact major U.S. studios and entertainment companies with Chinese market exposure.

IMAX Corp (IMAX ) faces particular exposure with 23% of its revenue derived from China, where 45% of all IMAX screens are located. Despite this, the company recently reported strong performance in China during 2025's first quarter, driven primarily by the domestic blockbuster "Ne Zha 2."

"IMAX is benefiting from a blockbuster-heavy 2025-2026 slate and tighter cost control, especially in China," noted Rosenblatt Securities analyst Steve Frankel, who maintains a "Buy" rating on the stock.

Why It Matters: Walt Disney Co (DIS ) and Warner Bros Discovery Inc (WBD ) also face potential impacts. Disney's Marvel superhero movie "Thunderbolts" secured permission to debut in China on Apr. 30, but the fate of other summer blockbusters remains uncertain. WBD's stock has already fallen 21.80% over the last month amid these concerns.

The restrictions follow Beijing's broader retaliation against Washington's tariff hikes, which includes increasing its levies on U.S. goods from 34% to 84% and filing a World Trade Organization complaint.

Two influential Chinese bloggers with Communist Party connections recently suggested China would "reduce or ban the import of U.S.-made films" along with restricting American companies from government procurement processes.

For U.S. studios, the $600 million earned in China last year represents a small but strategic portion of their global revenue. However, China's growing preference for domestic content had already created challenges for Hollywood before these new restrictions.

Wells Fargo Braces For Economic Slowdown In 2025, CEO Expects 'Volatility And Uncertainty'

Benzinga News — Fri, 11 Apr 2025 13:27:39 -0400

Wells Fargo & Company (WFC ) reported a net income of $4.89 billion on Friday, up 6% year over year in the first quarter of 2025. The bank reported GAAP EPS of $1.39, beating the consensus of $1.34.

Revenue fell 3% year over year to $20.15 billion. Analysts expected $20.75 billion.

The U.S. banking giant reported a 6% year-over-year drop in net interest income to $11.49 billion, driven by the impact of lower interest rates on floating rate assets, deposit mix, and pricing changes, lower loan balances, partially offset by lower market funding.

Noninterest income remained flat at $8.65 billion, including a gain on the sale of commercial non-agency third-party servicing business, an increase in asset-based fees in Wealth and Investment Management on higher market valuations, and higher investment banking fees, partially offset by lower results from venture capital investments, higher net losses on debt securities, and lower net gains from trading in Markets business.

Corporate and Investment Banking revenues increased 2% to $5.06 billion. Banking was down 4% to $1.77 billion, driven by the impact of lower interest rates, partially offset by lower deposit pricing and higher investment banking revenue on increased activity in debt capital markets.

Investment advisory fees and brokerage commissions are up 7%, driven by higher asset-based fees reflecting higher market valuations.

Investment banking fees increased by 24% due to higher activity in debt capital markets.

Average loans were down 2% year-over-year to $908.2 billion, driven by declines in commercial real estate and residential mortgage loans, up $1.8 billion sequentially driven by commercial & industrial loans.

Average deposits were up $12.9 billion, or 1%, year over year, as growth in customer deposits was partially offset by a reduction in higher-cost CDs issued by Corporate Treasury.

Average deposits are down $2.3 billion to 1,339.3 billion year over year, down 1% sequentially due to a reduction in higher-cost CDs issued by Corporate Treasury and declines in wholesale deposits, partially offset by higher consumer deposits.

Chief Executive Officer Charlie Scharf commented, "We produced solid results with diluted earnings per share increasing 16% from a year ago reflecting fee-based revenue growth across many of our core businesses, continued expense discipline, improved credit results..."

"We expect continued volatility and uncertainty and are prepared for a slower economic environment in 2025, but the actual outcome will be dependent on the results and timing of the policy changes," Scharf said.

Guidance: For fiscal year 2025, Wells Fargo expects net interest income to be ~1 to 3% higher than 2024 net interest income of $47.7 billion, unchanged from prior guidance.

Wells Fargo expects 2025 noninterest expense to be ~$54.2 billion, unchanged from prior guidance.

Price Action: WFC stock is up 0.67% at $63.53 during the premarket session at the last check Friday.

Novartis Commits $23 Billion To Expand US Manufacturing Over Five Years, Despite Tariffs Uncertainties

Benzinga News — Fri, 11 Apr 2025 13:26:54 -0400

Novartis AG (NVS ) on Thursday unveiled a sweeping $23 billion investment plan to expand its manufacturing and research infrastructure in the U.S. over the next five years.

The move is part of a broader strategy to ensure that all key Novartis medicines for U.S. patients are produced domestically.

As part of the initiative, Novartis will build seven new facilities - four focused on manufacturing and two dedicated to radioligand therapy (RLT) - and expand three existing RLT production sites.

These efforts are expected to generate nearly 1,000 new jobs at Novartis and support around 4,000 additional roles.

The move comes after U.S. President Donald Trump on Tuesday disclosed plans for a "major tariff" on foreign pharmaceuticals.

On Wednesday, President Donald Trump announced a 90-day pause on tariffs for countries that have not retaliated against U.S. trade measures.

"As a Swiss-based company with a significant presence in the U.S., these investments will enable us to fully bring our supply chain and key technology platforms into the U.S. to support our strong U.S. growth outlook. These investments also reflect the pro-innovation policy and regulatory environment in the U.S. that supports our ability to find the next medical breakthroughs for patients," said Vas Narasimhan, CEO of Novartis. "We are prepared for shifts in the external environment and fully confident in our 2025 guidance, mid- to long-term sales growth outlook, and 2027 core margin guidance of 40%+."

The investment includes a newly planned $1.1 billion research hub in San Diego, a research facility for scientific infrastructure and drug discovery.

The new complex, expected to open between 2028 and 2029, will serve as the epicenter of the Novartis West Coast Biomedical Research presence, complementing existing hubs in Cambridge, Massachusetts, and Basel, Switzerland.

In addition, the company will be expanding RLT manufacturing with new facilities in Florida and Texas.

To support growing demand for RLTs in the U.S., Novartis has expanded production capabilities in Millburn, New Jersey, and a state-of-the-art facility in Indianapolis, Indiana, and is building a third US RLT manufacturing facility in Carlsbad, California.

The total investment in Novartis' U.S. operations is expected to be nearly $50 billion over the next five years.

Earlier this year, Johnson & Johnson (JNJ ) announced its plans to invest more than $55 billion in the U.S. over the next four years, while Eli Lilly And Co (LLY ) announced to double its U.S. drug manufacturing spending from $23 billion to $50 billion within five years.

A Wedbush analyst said on Tuesday that building a factory in the U.S. takes four to five years. The analyst explains that high labor costs and other expenses in the U.S. don't align with how modern supply chains are designed to operate.

NVS Price Action: Novartis stock is up 2.33% at $103.40 during the premarket session at publication Friday.

EV Sales Rise 10.6% Year-Over-Year In Q1 2025: Tesla Declines But Remains US Market Leader

Benzinga News — Fri, 11 Apr 2025 13:26:48 -0400

The sales figures for Q1 2025 for EVs showcase a growth in U.S. EV sales for several manufacturers and paint a strong picture for the domestic EV sector.

What happened: Cox Automotive has published a report outlining how the EV sector is performing in the US. The report showcases how EV sales in the US have grown by over 10% year-on-year, with over 294,250 EVs sold in Q1 2025.

The report also says that roughly 7.5% of new vehicles sold in the US in Q1 2025 were EVs, a 7% year-on-year increase.

Despite experiencing an 8.6% decline in sales when compared to the same time last year, Tesla Inc. (TSLA ) still dominates the segment, boasting a 43.5% share in sales.

Elon Musk's company was followed by General Motors Co (GM ) with an 8.9% sales share, including Chevrolet, Cadillac, and GMC. Ford Motor Co. (F ) recorded a 7.7% sales share according to the report.

As far as individual models go, Tesla dominated the sales figures, selling over 64,051 units of the Model Y and 52,520 units of the Model 3.

Tesla was followed by the Ford Mustang Mach-E with 11,607 units sold and Chevrolet's Equinox EV with 10,329 units. Honda Motor Co Ltd. (HMC ) sold 9,561 units of the Prologue. The Honda Prologue is based on the same platform as Chevrolet's Equinox EV.

Why it matters: The report illustrates that despite Tesla suffering a decline, other companies like GM, Ford, etc. are adding to the domestic EV sales.

The report highlights increased adoption of EVs among drivers in the U.S. and the growth of legacy brands in the segment when compared with the new-age brands like Tesla.

Price action: GM is currently trading at $43.78, experiencing a 14.8% YTD decline, according to Benzinga Pro data.

Morgan Stanley Q1 Credit Loss Provision Jumps To $135 Million On 'Weakening Macroeconomic Forecast,' Equity Revenue Jumps 45%

Benzinga News — Fri, 11 Apr 2025 13:26:26 -0400

On Friday, Morgan Stanley (MS ) reported a first-quarter 2025 EPS of $2.60, up from $2.02 a year ago and beating the consensus of $2.21. Net earnings increased to $4.16 billion from $3.14 billion.

The U.S. bank reported first-quarter revenue of $17.74 billion, up 17% year over year, beating the consensus of $16.57 billion.

Morgan Stanley's provision for credit losses jumped to $135 million, primarily driven by growth in secured lending facilities and in the corporate loan portfolio and the impact of a weakening macroeconomic forecast.

The firm's expense efficiency ratio was 68% in Q1 of 2025 compared to 71% a year ago. Expenses for the quarter included $144 million of severance costs related to a March employee action across business segments.

Morgan Stanley delivered a Return on Tangible Common Equity of 23% during the first quarter and 19.7% a year ago.

Institutional Securities reported net revenues of $9.0 billion, reflecting record performance in Equity and strong Investment Banking results on higher fixed-income underwriting.

Investment Management results reflect net revenues of $1.6 billion, primarily driven by asset management fees on higher average assets under management (AUM) of $1.7 trillion. The quarter included positive long-term net flows of $5.4 billion.

Equity net revenues increased 45% to $4.13 billion. The company said, "Record Equity net revenues reflect increases across business lines and regions, particularly in Asia, with outperformance in prime brokerage and derivatives driven by strong client activity amid a more volatile trading environment."

Wealth Management reported net revenues of $7.3 billion in the current quarter compared with $6.9 billion a year ago. The business added net new assets of $94 billion, and fee-based asset flows were $30 billion for the quarter.

Asset management revenues increased 15% to $4.39 billion on higher asset levels and the cumulative impact of positive fee-based flows.

Ted Pick, Chairman and Chief Executive Officer, said, "The Integrated Firm delivered a very strong quarter with record net revenues of $17.7 billion and EPS of $2.60, and an ROTCE of 23.0%. Institutional Securities strong performance was led by our Markets business with Equity reporting a record $4.1 billion in revenues. Total client assets of $7.7 trillion across Wealth and Investment Management were supported by $94 billion in net new assets. These results demonstrate the consistent execution of our clear strategy to drive durable growth across our global footprint."

Price Action: MS stock is up 1.32% at $107.99 at the last check Friday.

Meta, Google And Other Big US Tech Firms Could End Up Paying Up If Trump Tariff Talks Collapse, Warns European Commission President: 'No Winners In This, Only Losers'

Benzinga News — Fri, 11 Apr 2025 13:26:18 -0400

European Commission president Ursula von der Leyen has said the EU is preparing a slate of retaliatory measures that could include levies on digital advertising revenues from U.S. tech companies like Facebook-parent Meta Platforms, Inc. (META ) and Alphabet Inc.'s (GOOGL ) (GOOG ) Google.

What Happened: The warning comes as transatlantic trade tensions rise, with President Donald Trump imposing steep new tariffs on European goods.

"We are developing retaliatory measures," von der Leyen told the Financial Times, noting the EU would seek a "completely balanced" agreement with Washington during Trump's 90-day tariff pause.

If talks fail, she warned, "There's a wide range of countermeasures ... in case the negotiations are not satisfactory."

These retaliatory measures could include:

Taxes on American tech companies that earn big money in Europe, especially through digital advertising revenue. Von der Leyen said that this would differ from digital sales taxes implemented individually by member states.

"It's a turning point with the United States without any question," von der Leyen said. "We will never go back any more to the status quo."

Pointing to the disruption in stock and bond markets, she stated, "There are no winners in this, only losers."

Why It Matters: Two of the U.S.'s biggest trade partners, China and the EU-which represent 8% and 13% of its overall trade, respectively-earlier indicated plans to respond with countermeasures.

However, on Thursday, the European Commission decided to pause its planned retaliatory measures against the U.S. tariffs on steel and aluminum. The proposed EU response would have impacted approximately €21 billion worth of American imports, including items like poultry, orange juice, and yachts.

China has already imposed reciprocal tariffs of 34% on all goods imported from the U.S.

On the other hand, the U.K. government is reportedly seeking to ease tensions with Trump over trade tariffs by offering substantial tax breaks to major American tech companies.

The proposed relief would impact digital giants such as Apple Inc. (AAPL ), Google, Facebook, Amazon.com, Inc. (AMZN ), and others currently paying the UK's DST.

Meta boasts an impressive growth score of 74.89%, according to Benzinga Edge Stock Rankings.

'Every Billionaire Who Needs More Than $999M Is Kind Of A Sociopath,' Says Abigail Disney

Benzinga News — Fri, 11 Apr 2025 13:25:27 -0400

Abigail Disney, filmmaker and heir to the Disney (DIS ) fortune, is known for her frank views on wealth, inequality, and politics. She recently expressed her concerns about the rise of Donald Trump, Elon Musk, and the culture of unbridled privilege, while advocating for systemic change and grassroots resistance.

What Happened: In a recent conversation with The Guardian's John Harris, Disney criticized Trump's sense of entitlement grounded in inherited wealth, calling it "the worst way to raise a person."

She argued that both Trump and Musk represent a moral void, highlighting Musk's role in defunding life-saving global health programs like PEPFAR.

Disney has long called for taxing the ultra-rich, stating, "Every billionaire who can't live on $999 million is kind of a sociopath." She has donated around $70 million to organizations supporting marginalized women.

Why It Matters: Disney believes Trump's success is not an accident but the outcome of years of cultural adulation of wealth. "Our magazine covers used to show war heroes or civil rights leaders-now it's all CEOs," she observed.

She holds the media, celebrity culture, and social media responsible for platforming figures like Trump, who "came along at the correct moment and played his role brilliantly."

Disney advocated for the restructuring of civic institutions and backing "authentic" voices in politics. She urged figures like Bernie Sanders, Alexandria Ocasio-Cortez, and younger politicians like Maxwell Frost to consolidate public support and chart a coordinated campaign.

Producer Inflation Cools Sharply In March, Yet Investors Show Muted Reaction

Benzinga News — Fri, 11 Apr 2025 13:25:11 -0400

Producer input prices fell far more than expected in March, aligning with a broader slowdown in consumer inflation seen the previous day, as the early effects of tariffs fail to materialize at the wholesale level.

The Producer Price Index (PPI) increased by 2.7% year-over-year last month, well below the previous 3.2%, according to data released Friday by the Bureau of Labor Statistics. The figure was sharply below economists' forecast of 3.3%.

On a monthly basis, wholesale prices fell by 0.4% in March, following an upwardly revised 0.1% increase in February and missing expectations for a 0.2% gain. The decline was driven largely by goods prices, which accounted for over 70% of the drop in the index for final demand.

Prices for final demand goods slipped 0.9%-the steepest monthly decline since October 2023, when they fell 1.4%. More than three-quarters of March's pullback in goods prices was due to a 4.0% drop in the index for final demand energy. Notably, gasoline prices plunged 11.1%, contributing to two-thirds of the overall decline in goods.

Other categories that saw price drops included chicken eggs, beef and veal, fresh and dry vegetables, diesel fuel, and jet fuel.

Core producer prices-excluding food and energy-rose 3.3% year-over-year, down from an upwardly revised 3.5% in February and below expectations of a rise to 3.6%.

On a monthly basis, core inflation declined by 0.1%, reversing the 0.1% increase seen in February and falling short of the 0.3% gain economists had forecast.

Market Reactions

Futures on major U.S. indexes advanced by 8:37 a.m. ET, with S&P 500 contracts up 0.6%, despite China raising U.S. tariffs to 125% overnight.

Dow Jones futures led the gains, up 0.8%, lifted by stronger-than-expected earnings from major banks, including JPMorgan Chase & Co. (JPM ), Morgan Stanley (SPY ), and Wells Fargo & Co. (WFC ).

Meanwhile, the U.S. dollar index pared earlier losses slightly, while Treasury yields climbed, with the 10-year yield rising 7 basis points to 4.43%.

Gold futures were 1.5% higher to $3,225 per ounce.

Premarket moves in major U.S. ETFs:

SPDR S&P 500 ETF Trust (SPY ) up 0.8%.
SPDR Dow Jones Industrial Average (DIA ) up 0.9%.
Invesco QQQ Trust Series (QQQ ) up 0.9%.
iShares Russell 2000 ETF (IWM ) up 0.7%.

Market Update: Dow Climbs 600 Points, Stocks Close Historically Volatile Week with Gains

Rachel Hemple — Fri, 11 Apr 2025 11:17:19 -0400

Stocks rose higher Friday as investors continue to weigh the risks of President Donald Trump's trade policies with disappointing consumer sentiment data. The Dow Jones Industrial Average climbed over 600 points, while the S&P 500 Index and Nasdaq Composite advanced 1.8% and 2%, respectively.

Here's how the market settled to close out the week:

S&P 500 Index (SPY ): +1.81% or +95.31 points to 5,363.36

Dow Jones Industrial Average (DIA ): +1.56% or +619.05 points to 40,212.71

Nasdaq Composite Index (QQQ ): +2.06% or +337.14 points to 16,724.46

Consumer Sentiment grew more pessimistic in April, the University of Michigan's survey showed Friday, as inflation expectations surged to their highest level since 1981. The survey's preliminary reading saw headline sentiment drop nearly 11% to 50.8 from 57.0 in March. The reading was the survey's lowest since June 2022 and marked a 34.2% annual decline.

One-year inflation outlooks jumped to 6.7%, the highest level since November 1981, rising from March's final print of 5%. Looking five years ahead, consumers expect inflation to grow by 4.4%, the highest level since June 1991.

Moreover, the current economic conditions index dropped 11.4% month-to-month to 56.5 in April, while the expectations index fell by 10.3% to 47.2. On an annual basis, these measures cratered 28.5% and 37.9%, respectively.

"Consumers report multiple warning signs that raise the risk of recession: expectations for business conditions, personal finances, incomes, inflation, and labor markets all continued to deteriorate this month," said Joanne Hsu, director of the Surveys of Consumers, in a statement. Hsu also noted that sentiment declines were seen across all demographics, including age, income and politics.

Wall Street has seen wild swings over the past few sessions in response to Trump announcing a 90-day pause on his "reciprocal" tariffs on many countries on Wednesday. Following the announcement, the Dow jumped more than 2,900 points and the S&P 500 rallied 9.52% for its third-largest gain in a single trading session post World War II.

All three major market averages also ended the week with gains, with the tech-heavy Nasdaq outperforming with a gain of 7%. The S&P 500 Index also advanced about 6%, while the Dow added over 5%. However, the broader market has given back much of its post-election gains from November after the White House announced the extreme tariff measures on April 2.

China on Friday raised its tariffs on U.S. imports to 125% from 85%, with the Chinese Finance Ministry stating that at their current level, "there is no longer a market for U.S. goods imported into China," and any more hikes from the Trump administration "will no longer make economic sense and will become a joke in the history of world economy," according to a translation provided by Google Translate.

The U.S. currently has a 145% duty on all goods imported from China, 25% tariffs on all aluminum, autos and goods from Canada and Mexico that are not covered by the United States-Mexico-Canada Agreement and a 10% charge on all other imports.

"While a 90-day pause on higher reciprocal tariffs is a welcome reprieve, by no means it marks the end of the story, in our view," Barclays strategist Emmanuel Cau wrote in a Friday note. "This week['s] events likely eroded further Trump's credibility with the financial community, and the extent of the damage to growth, while unknown yet, is likely to be significant."

Deutsche Bank research lead George Saravelos wrote on Friday that U.S. currency "is undergoing a process of rapid de-dollarization," citing the "continued and combined collapse in the currency and U.S. bond market as this week comes to a close."

The 10-year and 30-year U.S. Treasury yields rose around 4.5% and 5%, respectively, on Friday, adding to their steep rise seen throughout the week. Typically seen as a safe haven during times of instability, 10-year yield has notably risen more than 50 basis points after finishing last week around 4%, marking one of its biggest spikes on record as investors grow more uncertain about the direction of the U.S. economy in the coming years.

The dollar index also declined 1% on Friday, and is on track to end the week down about 3%.

New York Federal Reserve President John Williams lowered his outlook on the U.S. economy on Friday, raising his year-end inflation expectations to between 3.5% and 4% due to the expected impacts from Trump's trade policies. Williams now expects economic grow to slow "somewhat below 1%," this year and for the unemployment rate to climb to 5% due to reduced immigration and broad economic pressures on the job market.

"A key question is the extent to which this year's higher inflation spills over into subsequent years and how that may affect expectations," Williams said in a speech in Puerto Rico.

JPMorgan analyst Christopher Horvers wrote in a note on Friday that Trump's 90-day tariff pause is not going to do much to help for retailers, especially those who sell electronics and furniture.

"Our estimated tariff rates have actually stepped higher for most companies, driven by steep hikes on China, with [Best Buy (BBY )] and [Lowe's (LOW )] seeing significant weighted tariff rate increase while [BJ's Wholesale Club (BJ )] and [Tractor Supply Co (TSCO )] see some relief."

Horvers added that retailers that largely sell consumables should see the least margin pressure from the tariffs, while they may see operating profit headwinds from lower operating income rates. If companies pass the extra fees to consumers, Horvers sees high margin headwinds but little impact on earnings, while paying the costs for consumers forecasts significant earnings impacts.

On the Earnings Front:

JPMorgan Chase (JPM ) reported robust first-quarter earnings results on Friday, boosted by increased equity trading activity. However, CEO Jamie Dimon, who is often seen as a trusted voice on current and future economic conditions as the leader of the largest U.S. bank by many metrics, said he is preparing the firm for a wide range of economic scenarios from the fallout of Trump's global trade policies.

"The economy is facing considerable turbulence (including geopolitics), with the potential positive of tax reform and deregulation and the potential negatives of tariffs and 'trade wars," ongoing sticky inflation, high fiscal deficits and still rather high asset prices and volatility," Dimon said in a statement.

Wells Fargo (WFC ) reported stronger-than-expected first quarter earnings on Friday, benefitting from it's investment banking and wealth management businesses. The San Francisco-based lender's net interest income -- a key measure on profits from loans -- fell 6% year-over-year to $11.50 billion, while its non-interest income -- which includes investment banking fees, brokerage commissions and advisory fees -- rose by 1% to $8.65 billion.

The bank also purchased 44.5 million of its shares, worth $3.5 billion, during the quarter, and allocated $932 million for credit losses in response to increased economic uncertainty. CEO Charlie Scharf called for a "timely resolution," to Trump's trade war, as the bank prepares for "slower economic environment in 2025."

Morgan Stanley (MS ) also reported positive earnings data on Friday, with its stock trading revenue notably jumping 45% to $4.13 billion due to "strong client activity amid a more volatile trading environment." The New York-based lender's wealth management revenue rose 6% to $7.33 billion, while its investment banking unit saw revenues increase by 8% to $1.56 billion.

CEO Ted Pick told analysts during the company's earnings call that some transactions in its pipeline have been paused in response to Trump's tariffs, as many initial public offerings and mergers have been halted in recent weeks.

China Deal Is 'Going To Work Out,' Trump Says As Stocks Bounce From Session Lows

Benzinga News — Thu, 10 Apr 2025 14:53:47 -0400

Wall Street trimmed steep losses in afternoon trading Thursday, following remarks from President Donald Trump, who expressed some optimism about reaching trade agreements, particularly with China.

"Would love to be able to work a deal with China," Trump told reporters at the White House. "I think we will end up working out something good for both nations."

Trump raised the tariff on imports from China, America's largest trading partner, to 125% on Wednesday.

"I think it's going to work out," Trump added.

Markets reacted swiftly. By 2:50 p.m. ET:

The S&P 500 - tracked by the SPDR S&P 500 ETF Trust (SPY ) - was down 3.2%
The Nasdaq 100 trimmed its decline to over 3.8%
The Russell 2000 was off 3.68%.
The Dow Jones Industrial Average also recovered, paring earlier losses from over 4% midday to 2.34%.

At midday, the S&P 500 was down 4.8%, the Nasdaq 100 had plunged 5.4%, and the Russell 2000 had dropped 5.3%, wiping out nearly half of Wednesday's historic gains.

10% Baseline

Trump also attacked past trade policies, blaming NAFTA for the loss of nearly 90,000 factories and six million jobs-losses he claimed could have been avoided if tariffs had been in place earlier.

"We're going to bring them all back," Trump said.

Trump highlighted that the European Union initially planned to retaliate against U.S. tariffs but held back after seeing the U.S.'s aggressive stance against China. "They were very smart," he said.

He also mentioned flexibility in tariff negotiations, suggesting that each country or company might be treated differently depending on the circumstances.

"It's possible that I would consider flexibility for countries and companies," Trump said. "10% tariff is a baseline. But deals are all different, every country is different."

Trump laid out potential uses for the money raised through tariffs, including paying down national debt, reducing the budget and creating border walls.

Market Reactions: Gold Eyes Record Close

At last check Thursday, Benzinga Pro data showed:

Atlassian Corp. (TEAM ) was down 3.6%
Tesla Inc. (TSLA ) down 7%
Palantir Technologies Inc. (PLTR ) down 3.73%
Blackstone Inc. (BX ) down 6%, and
Eli Lilly and Co. (LLY ) down 3.77%.

Yields on 30-year Treasury notes were still 8 basis points higher on the day to 4.82%, yet slightly trimming earlier spike during the session.

Gold, as tracked by the SPDR Gold Trust (GLD ), traded 2.5% higher to $3,160 per ounce, on track to close at fresh record highs.

Bitcoin fell 3.9% to below $79,500, erasing nearly all Wednesday's gains occurred following the 90-day tariff pause announcement.

Brewing Caution: Jefferies Warms Up To Starbucks With Tepid Upgrade

Benzinga News — Thu, 10 Apr 2025 14:53:40 -0400

Jefferies analyst Andy Barish on Wednesday upgraded the shares of Starbucks Corp (SBUX ) from Underperform to Hold with a price forecast of $76, based on a 21x multiple of fiscal 2026 earnings forecasts.

Starbucks' recent stock struggles reflect uncertainty around near-term earnings, driven by consumer concerns and potential tariff-related inflation, said the analyst.

With no formal guidance and a new CFO in place, the analyst expects a slower, more modest earnings rebound over the next two years, likely aligning with below-consensus projections.

Starbucks is facing a deep-rooted cultural and workforce transformation, which the analyst said will take time to show results.

Unlike Chipotle's quicker turnaround under Brian Niccol, Starbucks lacks similar groundwork. The upcoming fiscal second-quarter may fall short of expectations due to restructuring and one-time costs, raising doubts about the pace of recovery in the second half and likely leading to reduced fiscal 2026-2027 projections.

The analyst plans to monitor progress on Starbucks' "Back to Starbucks" initiative, which includes investments in staff and technology to improve service speed and operational consistency.

The company is aiming to hit a four-minute service target but faces headwinds, including rising coffee costs and limited pricing flexibility.

With recent price hikes rolling off, average check size could come under pressure in the second half, though U.S. same-store sales are expected to gradually improve, noted the analyst.

According to the analyst, Starbucks' valuation appears more reasonable now, trading at roughly 20 times projected fiscal 2027 earnings, a level that has historically marked a floor during tough periods.

The analyst said core recovery will require more time than most investors anticipate, especially with short-term challenges like potential tariff impacts increasing the overall risk.

Despite limited short-term earnings clarity, analysts expect clearer signals in the coming quarters as leadership stabilizes.

SBUX Price Action: Starbucks shares traded lower by 4.84% at $84.42 at publication Thursday.

BofA Slashes Delta Air Lines Estimates For 2025 And Beyond Amid Capacity, Revenue Challenges

Benzinga News — Thu, 10 Apr 2025 14:53:34 -0400

B Of A Securities analyst Andrew G. Didora revised estimates for Delta Air Lines, Inc. (DAL ) following its first-quarter FY25 results reported on Wednesday.

Delta reported operating revenue growth of 2% year-over-year to $14.04 billion, beating the consensus of $13.02 billion. Adjusted EPS was $0.46 (+2% YoY), beating the consensus of $0.38.

The company stated that it is not reaffirming its full-year 2025 financial guidance and plans to provide an update later in the year as market visibility improves.

The analyst notes that the company has guided for flat capacity in the second half of the year, which is down from prior expectations of growth of nearly 4%.

Diadora lowered the second-quarter revenue growth forecast to the low end of Delta's projected -2% to +2% range and is carrying that run rate through year-end.

Notably, after the January earnings call, the analyst predicted second-quarter revenue growth of 7.7% and a full-year forecast of +8.2%.

At current fuel prices and with unit costs up 2.5%, Diadora cut the 2025 EPS estimate to $5.20 from $6.40 and slashed EPS estimates for 2026 to $5.94 (from $7.40) and 2027 to $6.35 (from $7.93).

The analyst writes that Delta's cabin segmentation strategy, enhanced product offerings, profitable loyalty program, and expected free cash flow of $1.0 billion in 2025 (based on revised estimates) position it to emerge stronger than its peers.

Diadora maintained the price forecast at $56 with a Buy rating.

Investors can gain exposure to the stock via the U.S. Global Jets ETF (JETS ) and the Defiance Hotel, Airline, and Cruise ETF (CRUZ ).

Price Action: DAL shares are down 11.4% at $39.22 at the last check on Thursday.

Nike Stock Tumbles As US-China Trade War Intensifies: What You Need To Know

Benzinga News — Thu, 10 Apr 2025 13:54:23 -0400

Nike Inc (NKE ) shares are tumbling on Thursday amid rising trade tensions between the United States and China.

What To Know: Nike shares are down about 25% over the past month as Trump administration tariffs threaten the company's supply chain. Nike imports most of its products from China, Vietnam, and Indonesia.

President Donald Trump announced sweeping reciprocal tariffs on numerous nations last week. The Trump administration slapped 46% reciprocal tariffs on Vietnam, 34% tariffs on China and 32% tariffs on Indonesia.

Trump has since announced a 90-day pause on tariffs for a majority of countries, but the ongoing trade war with China has intensified in recent days.

CNBC said Thursday morning on "Money Movers" that a White House official confirmed that the total tariff rate against China has grown to 145% as the trade war between the world's two largest economies continues to escalate.

China's commerce ministry reportedly said Thursday that it's open to discussions with the U.S. on the basis of mutual respect but will continue to push back against tariffs if the U.S. continues down the path it's currently on, per Reuters.

The report indicates that China commerce ministry spokesperson He Yongqian said threats and blackmail attempts from the U.S. are not the right way to try to make a deal with China. He reportedly said China will "follow through to the end" if the U.S. does not change its course.

Nike shares rallied alongside the broader market on Wednesday after Trump announced a 90-day pause on tariffs. The stock is giving back its gains on Thursday.

Stifel analyst Jim Duffy maintained Nike with a Hold rating on Thursday and lowered the price target from $75 to $64.

NKE Price Action: Nike shares were down 10.3% at $53.18 at the time of publication Thursday, according to Benzinga Pro.

Exxon Mobil And Chevron Among Top Energy Stock Losers Thursday: What's Going On?

Benzinga News — Thu, 10 Apr 2025 13:54:16 -0400

The Energy Select Sector SPDR Fund (XLE ) is trading lower by 6.91% to $76.67 during Thursday's session, as investors stepped back from Wednesday's risk-on rally and locked in profits, even as new inflation data came in cooler than expected.

What To Know: After surging around 10% following President Donald Trump's surprise 90-day pause on additional tariffs for non-retaliating countries, XLE fell around 5.9% Thursday morning, mirroring a broader market cooldown.

XLE is a sector-focused exchange-traded fund that tracks the performance of U.S. energy companies within the S&P 500. Its top holdings include Exxon Mobil Corp (XOM ), Chevron Corp (CVX ), Schlumberger NV (SLB ), ConocoPhillips (COP ) and Occidental Petroleum Corp (OXY ) -firms highly sensitive to commodity pricing, global demand expectations and geopolitical developments.

What Else: Despite the pullback, Thursday's macroeconomic backdrop was supportive. U.S. consumer prices unexpectedly declined in March, with headline inflation falling to 2.4% year-over-year and core inflation easing to 2.8%, both below forecasts.

The CPI even contracted 0.1% month-over-month, the lowest reading since May 2020, suggesting that tariff-related price pressures may be easing rather than accelerating.

However, energy markets faced mixed signals. A sharp 6.3% drop in gasoline prices weighed on the sector outlook, despite increased investor confidence in global trade stability following the tariff reprieve.

XLE's pullback Thursday also likely reflects a combination of profit taking and caution in a sector still tethered to volatile global dynamics, including Chinese demand, OPEC policy and currency fluctuations.

According to data from Benzinga Pro, XLE has a 52-week high of $98.97 and a 52-week low of $74.49.

Amazon Cancels Some China Orders After Tariffs, Vendors To Hike US Prices

Benzinga News — Thu, 10 Apr 2025 13:54:10 -0400

Amazon.com Inc. (AMZN ) has revoked orders for products made in China and other Asian countries, including beach chairs, scooters, and air conditioners, Bloomberg reported Thursday, citing unnamed sources familiar with the matter.

On April 2, President Trump announced plans to slap tariffs on over 180 countries and territories, including China, Vietnam, and Thailand.

In its February annual report, Amazon disclosed international trade disputes as a risk factor.

An Amazon vendor told Bloomberg that the e-commerce giant abruptly canceled its $500,000 wholesale order, leaving the vendor stranded with the manufactured chairs. However, Amazon denied the allegation, according to the report.

Former Amazon vendor manager Scott Miller told Bloomberg that Amazon canceled orders for merchandise made in China and other Asian countries without warning. Amazon has been leveraging bulk shipping rates to save on import costs.

Meanwhile, Amazon's Chinese vendors are looking to hike prices for the U.S. or quit that market in protest against the tariffs, Reuters reported Thursday.

On Wednesday, Trump shared plans to raise tariffs on Chinese imports to 125% from the 104% level already in effect.

Wang Xin of Shenzhen Cross-Border E-Commerce Association told Reuters that the new tariffs would jeopardize the entire cost structure and lead to customs delays and higher logistics costs.

China accounted for nearly half of Amazon's sellers, with over 100,000 Amazon businesses registered in the southern city of Shenzhen generating annual revenues of $35.3 billion, Reuters cited SmartScout.

Imports and exports involving cross-border e-commerce were worth 2.63 trillion yuan ($358 billion) in 2024, Reuters cited China's State Council.

Amazon vendors told Reuters they might need to raise their prices to maintain margins as they run out of inventories.

Dave Fong told Reuters that he has raised prices in the U.S. by up to 30%.

Amazon stock has lost over 13% year-to-date. It faces rising cost pressure from global tariffs, with b cutting its 2025 revenue and EPS estimates. Analyst Justin Post noted Amazon is gaining retail share due to low prices and a strong third-party network despite margin and ad spending concerns. Post projects 2025 revenue of $683 billion (down from $696 billion) and EPS of $5.76 (down from $6.16).

AMZN Price Action: Amazon stock is down 6.57% at $178.64 at the last check on Thursday.

Tech Sector Entering A Period Of 'Mass Uncertainty' Amid Tariffs And Upcoming Earnings Season, Says Dan Ives: 'The Damage Is Real'

Benzinga News — Thu, 10 Apr 2025 13:50:41 -0400

The technology sector is preparing for a period of uncertainty and volatility due to recent tariffs and the upcoming earnings season, according to Wedbush analyst Dan Ives.

What Happened: Despite hopes for stability following a pause in tariffs last year, the tech industry is facing a less certain reality. Large-scale purchases may see significant downsizing or pauses, contributing to the sector's volatility, said Ives.

The tech analyst attributes this turbulence to recent tariffs, which have reached as high as 125% on China, significantly impacting the tech industry. While he stated that the pause on tariffs is a good sign, there is still a lot of uncertainty. "There is a framework but the reality is there is mass uncertainty."

These tariffs have led to a dramatic pullback in capital expenditure (CapEx), especially on data centers. Companies such as Apple Inc. (AAPL ), Microsoft (MSFT ), Alphabet (GOOG ) (GOOGL ), and Amazon.com, Inc. (AMZN ) have all felt the impact, with spending plans stalled as they navigate this new reality.

As earnings season approaches, Dan anticipates further turbulence and predicts earnings cuts of about 10% across internet and big tech. The tech world is still assessing the full extent of the damage, with the potential for a U.S.-China deal looming large.

"Street numbers now you are assuming across the board you will see earning cuts to about 10% across internet and big tech.," he predicted.

The Wedbush Analyst stated that the June quarter would be very soft and investors are looking ahead to any sign of a China deal and a de-escalation.

Why It Matters: The 90-day tariff pause, announced by President Donald Trump, was initially seen as a relief for the stock market. However, despite the rally in markets, analysts warned of a "key obstacle" still on the table.

Ives' concerns about pauses in data center capex are relevant as reports suggest that Microsoft has recently shelved a $1 billion data center investment in Ohio.

Trump's more lenient approach to his trade agenda led to a significant rally in the stock market. However, portfolio managers and analysts were not fully convinced. They believed that the escalating trade war and a worrying selloff in the U.S. government bond market had caused permanent damage.

For tech companies, the road ahead remains volatile. The combination of paused projects, tariff-driven cost increases, and cautious guidance paints a challenging picture for the industry. As Dan Ives put it, "The damage is real."

Inflation Cools, But 'Too Soon To Blow The All Clear,' Economist Says

Benzinga News — Thu, 10 Apr 2025 13:50:31 -0400

The annual inflation rate eased more than expected in March, coming in at 2.4% on Thursday's Consumer Price Index report. Multiple economists emphasized that March's cooling may be temporary, as President Donald Trump's reinforced tariffs and trade measures could reverse progress by raising consumer prices.

Expert Ideas: Joseph Brusuelas, chief economist for RSM, said that this will be the last cool CPI print for some time as tariff-induced inflation is on the way. The economist sees topline and core inflation to hit 4% to 4.5% by mid-summer of 2025.

"Look at the 0.1% decline in core goods prices because it is the last one that investors are going to observe for a good period," Brusuelas wrote in a post on social media.

Chris Zaccarelli, chief investment officer for Northlight Asset Management, noted March's cool inflation data is welcome news to the Federal Reserve who may choose to cut rates if tariffs cause significant damage to the economy.

"It's much too soon to blow the all clear - both on tariffs or on inflation - since the tariff damage has only been postponed as of now, and will only be relieved if tariff deals can be struck across the board," Zaccarelli said.

He also pointed to Friday's Producer Price Index data as an indicator of whether or not future inflation is already "in the pipeline."

Charlie Bilello, chief market strategist for Creative Planning, took a more optimistic view of the CPI data and said inflation below 3% should be enough for the Fed "to resume cutting rat[e]s in June."

Financial news outlet ZeroHedge went even further, claiming that the U.S. economy is in deflation.

"Economists gonna be begging Trump for more tariffs: Supercore inflation CRASHES at fastest pace since covid lockdown. US is in DEFLATION," ZeroHedge posted on X.

Markets React: Markets shrugged off the cool inflation data Thursday as ongoing uncertainty around trade policies triggered another broad sell off.

The SPDR S&P 500 ETF Trust (SPY ), tracking the S&P 500, was down 3.88% at $527.33 and the Invesco QQQ Trust (QQQ ), tracking the Nasdaq 100 index, was down 3.53% at $449.56 at the time of publication.

China's Growth Outlook Dims As Trump's 125% Tariffs Put Millions Of Jobs At Risk, Goldman Warns

Benzinga News — Thu, 10 Apr 2025 13:40:09 -0400

A seismic tariff escalation from President Donald Trump has triggered a sharp downgrade to China's growth forecasts, with Goldman Sachs now projecting a sluggish economic recovery and warning of deep labor market consequences.

In a note shared Thursday, a team of Goldman Sachs economists led by Andrew Tilton said the sudden tariff spike announced on April 9 - lifting U.S. duties on Chinese goods to 125% - is poised to hammer China's GDP and jeopardize up to 20 million export-linked jobs.

Tariff Tsunami Raises Economic Stakes

Trump's move follows a tit-for-tat exchange with Beijing, which retaliated by hiking tariffs on U.S. goods to 84%, up from prior levels. The cumulative effect has pushed the U.S. effective tariff rate on Chinese goods from 11% at the start of his administration to today's eye-watering 125%.

According to Goldman's estimates, that jump alone could slash Chinese real GDP by 2.6 percentage points - with a 2.2 percentage point impact hitting as soon as 2025.

The investment bank now forecasts China's real GDP growth to slow to 4.0% in 2025 and 3.5% in 2026, down from previous estimates of 4.5% and 4.0%. That's well below the Chinese government's official growth target of "around 5%" for the year.

Goldman said these projections reflect not just U.S. tariff pressure, but also a weakening global economy that's expected to further erode Chinese exports.

"We believe that achieving 4.5% GDP growth this year would be very challenging," Goldman Sachs said.

Can Stimulus Save the Day?

To cushion the blow, Beijing is expected to roll out an aggressive mix of monetary and fiscal policy easing. Goldman now forecasts an additional 60 basis points in policy rate cuts in 2025 - up from a prior 40 basis point estimate - as well as a substantial increase in the "augmented fiscal deficit" - a broad measure of public sector borrowing - from 10.4% to 14.5% of GDP.

Credit growth will likely accelerate too, with Chinese officials signaling relaxed property restrictions and stronger infrastructure stimulus to help offset demand destruction from abroad.

Still, Goldman said even these measures won't be enough to fully neutralize the negative effects of Trump's tariffs.

"While we anticipate that policymakers achieve 4% real GDP growth," the bank wrote, "our alternative measures of growth could fall below this level."

The iShares China Large-Cap ETF (FXI )- a popular U.S.-listed fund tracking major Chinese companies - has dropped 12% since Trump first unveiled a 34% "reciprocal" tariff on Chinese imports. With the full tariff now at 125%, sentiment remains fragile.

The Human Toll: Millions of Jobs On The Line

Perhaps most concerning is the potential damage to China's workforce. Goldman estimates that between 10 million and 20 million Chinese workers are exposed to sectors heavily dependent on exports to the United States.

As exports to the U.S. come under strain, China's labor market may suffer a major blow, fueling job losses in manufacturing centers and deepening the challenges of its uneven post-pandemic rebound.

SpaceX's Starlink Growth Impresses, But Valuation May Be Overblown, Says Expert

Benzinga News — Thu, 10 Apr 2025 13:39:59 -0400

Elon Musk's SpaceX has seen remarkable success with its satellite network, Starlink, but some experts question whether its current valuation is sustainable.

What Happened: Starlink, a satellite network launched by SpaceX to sell broadband internet access, has achieved impressive growth since its inception. As of March, the service had amassed 5 million customers, more than doubling the market of previous satellite communications leaders, Viasat and Hughes.

Starlink's success has significantly contributed to SpaceX's valuation, which touched $350 billion in December, positioning it as the world's most valuable private company. However, some industry experts express concerns about the sustainability of this valuation, reported Forbes.

While Starlink is making money by offering internet access to airplanes, ships, and remote areas, its biggest opportunity lies in high-speed residential internet access. Research firm Quilty Space expects this market to contribute 63% of Starlink's revenue this year.

Despite the encouraging numbers, some experts believe Starlink's potential may be overestimated by investors. The service faces technical limitations, such as the inability to serve many internet customers in densely populated areas. Furthermore, its high prices may limit its reach in rural regions and developing countries.

Independent telecom consultant Tim Farrar told Forbes, "..I don't think that Starlink alone as it exists today and the reasonable view of its future growth is going to support that sort of valuation,"

Competing services, including Amazon's (AMZN ) upcoming satellite constellation, Kuiper, pose another challenge. With Amazon's financial resources and existing infrastructure, Kuiper could pose a significant threat to Starlink's market dominance.

Why It Matters: In March, SpaceX surpassed Tesla (TSLA ) to become Elon Musk's most valuable asset as Tesla's stock value plunged by 50% due to Musk's deep involvement in President Donald Trump's Department of Government Efficiency (DOGE). This shift in Musk's assets has raised questions about his ability to manage his responsibilities at both Tesla and DOGE.

Adding to the complexity, in April, Bell Canada, a telecom giant, urged the Canadian Radio-television and Telecommunications Commission (CRTC) to exclude Starlink from receiving millions in annual subsidies. This move came amid a wave of national criticism of Musk's ventures due to his ties with the Trump administration.

These developments underscore the challenges Starlink faces in maintaining its market dominance and valuation. Despite these concerns, SpaceX President Gwynne Shotwell thinks Starship has great potential to contribute to humanity. "Ultimately, I think Starship will be the thing that takes us over the top as one of the most valuable companies," stated Shotwell.

Economist Pierre Lionnet sees no near-term demand to justify optimistic space industry forecasts, noting flat satellite launch needs outside of Starlink. He also stated that space tourism remains prohibitively expensive, with ticket prices likely exceeding $100,000 per passenger.

Corona Beer Maker Talks Tariff Impact, Issues Conservative Outlook

Benzinga News — Thu, 10 Apr 2025 13:39:49 -0400

Constellation Brands Inc (STZ ) reported fourth-quarter earnings on Wednesday. Its net sales grew 1% year over year (Y/Y) to $2.16 billion, beating the analyst consensus estimate of $2.13 billion.

Net sales for the Beer segment remained flat Y/Y at $1.70 billion, and Wine and Spirits rose 11% Y/Y to $459.8 million. Shipment volume for Beer fell 1.8% Y/Y, while Wine and Spirits rose 3.5% Y/Y.

Gross profit increased 7% year over year to $1.11 billion. The company reported an operating loss of $(150.3) million compared to operating income of $629.4 million in the same quarter a year ago.

The operating margin for the quarter was (6.9)% vs. 29.4% in the prior-year quarter.

Adjusted EPS of $2.63 beat the analyst consensus estimate of $2.28.

The company generated an operating cash flow of $3.2 billion in FY25, a 13% year-over-year increase, and a free cash flow of $1.9 billion, a 28% year-over-year growth.

Constellation Brands ended the quarter with $68.1 million in cash and equivalents as of February 28.

As of the end of fiscal 2025, Constellation Brands had around 48 million hectoliters of production capacity across its facilities in Mexico.

Dividend: Constellation's board declared a quarterly cash dividend of $1.02 per share, an increase of 1%, payable on May 15, to stockholders of record on April 29.

Buyback: The company announced a new 3-year share repurchase authorization of $4 billion.

President and CEO Bill Newlands stated, "Despite a softer consumer demand backdrop in fiscal 2025, we delivered another year of Enterprise net sales growth and substantial comparable operating margin improvement, as well as double-digit comparable EPS growth."

"Looking ahead, in a tough socioeconomic environment we are taking decisive actions designed to continue to support our industry-leading Beer Business, reset our cost base, and redefine our portfolio."

Garth Hankinson, Executive Vice President and Chief Financial Officer, added, "We remain committed to these balanced priorities as we deploy the approximately $9 billion of operating cash flow we expect to generate between fiscal 2026 and fiscal 2028, including through the use of our new total $4 billion share repurchase authorization aligned with that period."

Guidance: The company issued FY26 guidance, projecting comparable EPS of $12.60-$12.90 vs. consensus of $13.45.

The company expects enterprise organic net sales growth to be flat to 3% in the Beer segment and a decline of 17% to 20% in the Wine and Spirits segment in FY26.

Also, the company sees operating cash flow of $2.7 billion-$2.8 billion and free cash flow of $1.5 billion-$1.6 billion, including recently disclosed Wine and Spirits divestiture and restructuring actions.

The company expects EPS growth in the mid-single to low-double digits in FY27 and in the low-single to mid-single digits in FY28.

Constellation projects cumulative operating cash flow and free cash flow for fiscal 2027-2028 to exceed $6 billion and $5 billion, respectively.

For FY27-FY28, the company anticipates enterprise net sales growth of approximately 2% to 4%, with growth of 2% to 4% in Beer segment and flat to +3% in Wine and Spirits segment.

Between FY26 and FY28, the company plans to invest around $2 billion in capital expenditures, mainly to continue the modular development of its third brewery in Veracruz and expand existing sites.

By FY28, capacity in Mexico is expected to grow to about 55 million hectoliters to support anticipated demand for its high-end beer brands.

Constellation Brands states that its guidance reflects the expected impact of tariffs announced by the U.S. on April 2 and Canada on March 4.

The company also expects its restructuring actions to generate over $200 million in net annualized cost savings by FY28.

Investors can gain exposure to the stock via First Trust Nasdaq Food & Beverage ETF (FTXG ) and Brookstone Value Stock ETF (BAMV ).

Price Action: STZ shares are down 0.18% to $183.07 at the last check on Thursday.

Microsoft Shelves $1 Billion Ohio Data Center Plans Amid Global Project Withdrawals: 'We Are Slowing Or Pausing Some Early-Stage Projects'

Benzinga News — Thu, 10 Apr 2025 13:38:07 -0400

Microsoft Corporation (MSFT ) has decided to suspend its billion-dollar data center project in Licking County, Ohio. This decision marks the most recent in a line of data center project cancellations by the software behemoth.

What Happened: Microsoft has backed out of its earlier commitment to invest $1 billion in three data center campuses located in New Albany, Heath, and Hebron. This decision aligns with the company's recent trend of pulling out from data center projects across the US, Europe, APAC, and the U.K., reported The Columbus Dispatch.

The original plans, unveiled in October, involved a $420 million investment for the New Albany data center campus, which had been granted a 15-year tax abatement by the City Council. The data center was slated to occupy a 200-acre site with construction set to commence in July 2025.

A Microsoft spokesperson told the publication, "We will continue to evaluate these sites in line with our investment strategy." The company also reaffirmed its plan to retain ownership of the land and proceed with development at a future date yet to be determined.

Why It Matters: This decision by Microsoft follows a pattern of similar project cancellations. Earlier this month, the tech giant had halted discussions and postponed the development of sites in several locations including the UK, Australia, and the U.S., due to concerns over semiconductor tariffs and AI overcapacity.

Earlier in February, Microsoft had begun to cancel leases for a significant portion of its AI data center capacity in the U.S., hinting at a potential oversupply situation. TD Cowen's analysts were the first to highlight the issue, speculating that lease cancellations and capacity deferrals indicate a data center oversupply relative to Microsoft's current demand forecast.

Notably, in January, Microsoft unveiled plans to invest nearly $80 billion in developing AI-powered data centers and deploying AI and cloud-based applications globally.

Meanwhile, Noelle Walsh, Microsoft Cloud president, stated on LinkedIn that the company is on course to fulfill its capex commitment for the year, adding, "Data center planning is a multi-year and capital-intensive program... we are slowing or pausing some early-stage projects. While we may strategically pace our plans, we will continue to grow strongly and allocate investments that stay aligned with business priorities and customer demand."

Here's Why Your Bowls And Burritos At Chipotle Won't Cost Higher Due To Tariffs: 'It's Unfair To The Consumer', Says CEO Boatwright

Benzinga News — Thu, 10 Apr 2025 13:37:48 -0400

Chipotle (CMG ) CEO Scott Boatwright spoke about the company's financial stability and growth potential despite the current market uncertainties.

What Happened: Boatwright stated that Chipotle would not hike prices on its menu due to tariffs. The CEO emphasized that the strength of Chipotle's balance sheet, low debt, and substantial cash reserves are the key contributors to the company's resilience. The company is well-positioned to absorb the full tariff impacts imposed by the Trump administration, which would cost about 60 basis points of margin on the year, indicated Boatwright in a recent interview with Fortune.

"I think it's unfair to the consumer to pass those costs off to the consumer, because pricing is permanent," stated Boatwright. The CEO also expressed that he is unsure which parts of the tariffs are temporary and which will remain in place permanently.

Addressing concerns about the future of the restaurant industry amid political uncertainties, Boatwright acknowledged a market pullback and cautious consumer behavior. However, he expressed optimism about Chipotle's position.

Boatwright also highlighted positive transaction trends following the launch of Chipotle Honey Chicken. He also credited the company's AI-powered virtual team member, Ava Cado, for significantly reducing onboarding time and improving staffing efficiency, despite industry headwinds.

Why It Matters: Chipotle's resilience and growth prospects are underpinned by strategic initiatives undertaken by the company. In February, Chipotle launched a campaign to hire 20,000 new employees ahead of the busy "Burrito Season," which runs from March to May. This move was aimed at increasing staffing across its 3,700+ locations. The company also introduced new employee perks and TV commercials featuring its actual staff members to attract more applicants.

That being said, the CEO acknowledged that the current environment is highly uncertain and there is a "bit of slowdown" in the industry. "We drove comp sales last year at 7.4%, largely driven by a great transaction flow. As we got into the new year, there was a lot of things, or headwinds, I should say, within the industry, specifically," stated the CEO.

Nevertheless, Boatwright is confident about Chipotle's brand positioning. The employee-centered initiatives, coupled with the launch of Chipotle honey chicken and the introduction of AI-powered Ava Cado, demonstrate Chipotle's commitment to innovation and growth, even in the face of market uncertainties.

On Wednesday, RBC Capital Markets maintained its 'Outperform' rating on Chipotle stock with a price target of $70.

Chipotle holds a growth rating of 72.59% and a quality rating of 88.16%, according to Benzinga's Proprietary Edge Rankings. The Benzinga Growth metric evaluates a stock's historical earnings and revenue expansion across multiple timeframes, prioritizing both long-term trends and recent performance.

March Inflation Rate Cools Far More Than Expected, Raises Hopes For Near-Term Fed Rate Cuts

Benzinga News — Thu, 10 Apr 2025 13:37:42 -0400

Price pressures eased more than expected in March, offering significant relief to concerns over the front-loading effects of trade tariffs and further fueling investor risk-on sentiment following President Donald Trump's surprising 90-day tariff pause on Wednesday.

The annual inflation rate fell to 2.4% in March, the lowest level in six months, down from 2.8% in February, according to data released Thursday by the Bureau of Labor Statistics.

The figure was below economist expectations of 2.6%. On a monthly basis, the Consumer Price Index contracted by 0.1%, slowing from the 0.2% increase seen the previous month and below expectations of a 0.1% increase.

It marks the lowest monthly inflation reading since May 2020.

A 6.3% drop in gasoline prices was more than offset by increases in electricity and natural gas indexes. In contrast, the food index rose 0.4% in March, driven by a 0.5% increase in food at home and a 0.4% rise in food away from home.

Shelter costs, which make up nearly a third of the consumer basket, edged up just 0.2%-the smallest monthly increase since August 2021.

Core inflation, which excludes volatile food and energy prices, was up 2.8% year-over-year, the lowest since March 2021.

The outcome was lower than the expected 3% and down from 3.1% in February. Month-over-month, core inflation increased by 0.1%, declining from February's 0.2% pace and below estimates of 0.3%.

Ahead of the March inflation report, traders had priced in a 16% probability of a 25-basis-point rate cut by the Federal Reserve at its upcoming May 7 meeting. By June, markets had factored in a 75% chance of a rate cut.

Market Reactions

S&P 500 futures were down 1.6% as of 8:35 a.m. in New York, paring steeper overnight losses following the benign inflation report.

On Wednesday, the index - as tracked by the SPDR S&P 500 ETF Trust (SPY )- closed 10.5% higher, notching the strongest one-day gain since 2008.

Futures on the Nasdaq 100 were 1.7% lower. A day earlier, tech stocks - tracked by the Invesco QQQ Trust (QQQ ) - rocketed 12%, the largest jump since October 2008. Shares of Apple Inc. (AAPL ) - the world's largest company by market capitalization - were down 3.5% during the premarket trading Thursday after closing 15% higher a day earlier, setting their best day since January 1998.

Yields on 2-year Treasury notes - which are more sensitive to interest rate expectations - fell by nearly 10 basis points.

Costco Posts Strong March Sales, Analysts Highlight Uptick In Purchases Ahead Of Tariffs

Benzinga News — Thu, 10 Apr 2025 13:37:09 -0400

Costco Wholesale Corp (COST ) reported upbeat March sales on Wednesday. Here are some key analyst takeaways.

Goldman Sachs analyst Kate McShane maintained a Buy rating, while raising the price target from $1,102 to $1,118.
JPMorgan analyst Christopher Horvers reiterated an Overweight rating and price target of $1,070.
Telsey Advisory Group analyst Joseph Feldman reaffirmed an Outperform rating and price target of $1,100.

Goldman Sachs: Costco reported March same-store sales, excluding gas and forex impact, of 9.1%. It significantly beat consensus of 7.4% and accelerated from February's 8.3%.

U.S. comparable sales came in at 8.7%, above consensus of 7.7% and accelerating from 8.6% in February, McShane noted.

"Worldwide traffic accelerated to +6.1% in March (vs. +5.0% in February, +7.1% in January, and +5.5% in December), while overall global ticket (ex-gas/FX) increased an estimated +2.9% (vs. +3.2% in February, +2.7% in January, and +4.3% in December)," the analyst wrote. She raised the earnings estimate for the fiscal third quarter from $4.25 per share to $4.29 per share.

JPMorgan: While U.S. traffic grew 6.1%, Canada and Other International core comps were strong at 10.6% and +9.9%, respectively, "indicating no pullback in international segments as a result of US boycotts," Horvers said. "E-commerce sales were +17.5% ex-FX," he added.

There was an uptick in momentum, particularly in electronics, and "likely related to tariff pricing fears," the analyst stated. For April, the US core comp could come in at 6.5%, Canada at 8%, and Other International at 7%, "resulting in total company core comp of +6.8%," he further wrote.

Telsey Advisory Group: Costco reported "impressive" March same-store sales, Feldman said. "Costco continues to execute well in this uncertain operating environment," he added.

The company is poised to continue generating strong earnings growth, "driven by a MSD comp, membership fee income growth of HSD, effective management of merchandising and costs, and leverage of customer data," the analyst wrote. He projected April headline comp of 4.5%, versus 5.6% last year.

Price Action: Costco shares declined by 0.91% to $956.4 at the time of publication on Thursday.

Bearish Sentiment Hits 7-Week High, Mimicking 35-Year Old Record Which Marked The Bottom Of The October 1990 Bear Market

Benzinga News — Thu, 10 Apr 2025 12:59:55 -0400

Despite a weekly decrease in negative sentiment, the latest American Association of Individual Investors (AAII) survey showed bearishness still leading bullish and neutral views at 58.9% this week.

What Happened: Investor pessimism in the latest AAII survey, conducted weekly from Thursday to Wednesday, has lessened. The percentage of individual investors with a negative short-term view of the stock market declined by 3%, moving from 61.9% down to 58.9%.

The bearish sentiment continues to be above 50% for the seventh straight week. Last week, at 61.9%, the bearish sentiment had hit a 16-year high since March 2009.

Whereas with the seven-week-long streak currently, it matched a 35-year-old record. According to Subu Trade, the last time bearish sentiment was above 50% for seven straight weeks was in October 1990, which was also the bottom of that bear market.

AAII Bears is now at 58.9% This is the 7th straight week with over 50% bears - matching the record in October 1990, which was the bottom of that bear market.

The historical average of bearish sentiments stood at 31%, which was nearly half of the current pessimism among the participants of the AAII survey.

Meanwhile, the bullish sentiment rose to a seven-week high at 28.5%, the highest since the week ending Feb. 19, when it stood at 29.2%.

The neutral sentiment shrank from 16.3% to 12.5% this week.

Why It Matters: While seven weeks of high bearish sentiments above 50% represented the bottom of the bear market in October 1990, this week could possibly be the same, owing to the pause on tariffs by President Donald Trump, announced on Wednesday.

He cited the negotiation attempts by nearly 75 countries without any retaliation as the reason for the pause. However, experts believed that a spike in Treasury yields was the major contributor to the change in stance.

The market rebounded on Wednesday as the Nasdaq 100 climbed out of bear market territory, although it remained 13.85% below its prior peak of 22,222.61 points. The S&P 500 was still in a correction, sitting 11.23% lower than its record high of 6,147.43 points, while the Dow Jones was 9.91% down from its 52-week high of 45,073.63 points.

The SPDR S&P 500 ETF Trust (SPY ) and Invesco QQQ Trust ETF (QQQ ), which track the S&P 500 index and Nasdaq 100 index, respectively, were lower in premarket on Thursday. The SPY was down 2.40% to $535.43, while the QQQ declined 1.81% to $457.56, according to Benzinga Pro data.

Pharma Industry Faces Jitters As Trump Hints At Historic Tariffs, BofA Outlines Probable Timeline

Benzinga News — Thu, 10 Apr 2025 12:59:31 -0400

U.S. President Donald Trump, on Tuesday, disclosed plans for a "major tariff" on foreign pharmaceuticals.

"We're going to be announcing very shortly a major tariff on pharmaceuticals... when they hear that they will leave China, they will leave other places because... most of their product is sold here," Trump expressed at a National Republican Congressional Committee dinner.

He also told reporters on board his Air Force One plane that "pharma" tariffs would arrive "at a level that you haven't really seen before," saying these would be announced "in the near future," BBC report added.

When President Trump announced tariffs last week, he excluded pharmaceuticals from the new tariffs, likely a relief for the industry under pressure following his prior comments suggesting a 25% tariff on pharmaceutical imports.

On Wednesday, in a surprise announcement from President Donald Trump, a 90-day pause on tariffs for countries that have not retaliated against U.S. trade measures.

The news ignited a broad risk-on rally, catapulting major indices to multi-month highs and sending volatility plunging.

Trump's latest Truth Social post slammed China for showing "a lack of respect" and declared an immediate 125% tariff hike on Chinese goods.

"At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A. and other Countries is no longer sustainable or acceptable," he said.

He praised the over 75 countries that, in his words, "have not, at my strong suggestion, retaliated in any way, shape, or form."

As a reward, those countries would benefit from a temporary 10% reciprocal tariff and a 90-day pause on additional duties.

The biopharma industry has historically been shielded from tariffs, including during Trump's first term.

Although Trump didn't provide many details, his remarks have unsettled buyers, especially those who depend on medicines from India. India provides nearly half of all generic drugs used in the U.S., helping cut billions from healthcare costs.

The U.S. is a major market, buying about a third of India's $13 billion in yearly drug exports.

Indian drug companies warn that if tariffs are added, they'd have to raise prices-which could increase healthcare costs in the U.S.

Even though some companies like Cipla and Dr. Reddy's Laboratories Ltd have factories in the U.S., most say it's too expensive to move production for low-profit generic drugs.

BofA Securities analyst says if the Trump administration plans to impose tariffs on the pharmaceutical industry, it would likely do so through a "Section 232 investigation" under the Trade Expansion Act of 1962 to determine whether importing certain goods threatens national security.

The typical timeline for a Section 232 investigation is about a year. If the same timeline applied here, tariffs on drug imports likely wouldn't take effect until late in the year-at the earliest.

It's unclear whether the Section 232 investigation into the drug industry is about to start, but based on recent comments from the administration, it seems possible. However, launching an investigation doesn't guarantee that tariffs will follow.

As the first quarter 2025 earnings season starts soon, analyst Tim Anderson says it will be worth watching whether companies discuss potential tariffs during earnings calls.

That said, any actual earnings impact likely wouldn't show up until sometime after 2025, which could leave investors with more questions than answers.

Wedbush analyst Daniel Ives on Tuesday wrote that "saying we can just make this in the USA" understates how complex the supply chain in Asia really is-and how electronics, chips, semiconductors, hardware, and smartphones have been built for U.S. consumers over the past 30 years."

Shares of major drugmakers such as Gilead Sciences Inc (GILD ), Merck & Co Inc (MRK ), Eli Lilly And Co (LLY ), AstraZeneca Plc (AZN ), Roche Holdings AG (RHHBY ), Sanofi SA (SNY ), Novartis AG (NVS ), Argenx SE (ARGX ), UCB SA (UCBJY ), Novo Nordisk A/S (NVO ), Regeneron Pharmaceuticals Inc. (REGN ), GSK Plc (GSK ) and Pfizer Inc (PFE ) fell on Wednesday, only reverse course later after the 90-day tariff pause.

China Warns Citizens Over US Travel After Trump's Tariff Hike Triggers Retaliation, Cites 'Deteriorating' Relations And Rising Security Risks

Benzinga News — Thu, 10 Apr 2025 12:59:24 -0400

China's government issued dual warnings to citizens regarding U.S. travel on Wednesday, citing deteriorating bilateral relations as both nations exchange hefty tariffs on imports.

What Happened: The warnings came shortly after Beijing announced plans to raise reciprocal tariffs on American goods to 84% from 34%, responding to President Donald Trump's recent tariff hikes on Chinese products.

"Due to the deterioration of Sino-US economic and trade relations and the domestic security situation in the United States, the Ministry of Culture and Tourism reminds Chinese tourists to fully assess the risks," China's tourism ministry stated in an official warning.

The escalating trade conflict intensified earlier this week when Trump implemented sweeping tariffs exceeding 100% on Chinese imports, which initially sent U.S. stock futures plunging.

Why It Matters: Markets staged a historic recovery following Trump's surprise 90-day reprieve on reciprocal tariffs for non-retaliating countries, with the S&P 500 tracked by SPDR S&P 500 (SPY ) surging 9.52% and the Nasdaq 100 tracked by Invesco QQQ Trust, Series 1 (QQQ ) rocketing 12.2% - their strongest one-day gains since October 2008.

Gene Munster, managing partner at Deepwater Asset Management, cautioned investors that "we're not out of the woods yet," noting that Trump's effort to "right-size China... will take time and involve some negative headlines."

China's retaliatory measures extend beyond tariffs, with Beijing filing a complaint with the World Trade Organization, adding six American companies to its unreliable-entity list, and imposing export controls on 12 U.S. firms that prohibit Chinese suppliers from providing dual-use items.

Market Update: Dow Falls 1,100 Points After Historic Rally

Rachel Hemple — Thu, 10 Apr 2025 11:48:10 -0400

Stocks declined on Thursday as market participants gave back some of the gains from the previous session's historic surge after President Donald Trump announced a 90-day pause on some of this tariffs. The Dow Jones Industrial Average lost over 1,000 points, while the S&P 500 Index and Nasdaq Composite each dropped about 4%.

Here's how the market settled on Thursday:

S&P 500 Index (SPY ): -3.46% or -188.85 points to 5,268.05

Dow Jones Industrial Average (DIA ): -2.50% or -1,014.79 points to 39,593.66

Nasdaq Composite Index (QQQ ): -4.31% or -737.66 points to 16,387.31

The White House confirmed on Thursday that total tariffs on Chinese imports will now by 145%, adding the 20% previous charged in response to the fentanyl crisis on top of the new 125% rate announced Wednesday. Trump also raised a separate duty on inbound packages from Beijing valued at $800 or less to 120% starting May 2, effectively eliminating the so called deminis tariff expectation.

Trump's executive order signed Wednesday also increases the "per postal item" cost for low-value shipments to $100 starting May 2, and rising to $200 on June 1.

This ruling directly impacts China-based online retailers like Shein and PDD Holding's (PDD ) Temu, as well as e-commerce merchants that sell on platforms like Amazon (AMZN ), Etsy (ETSY ), Shopify (SHOP ) and Walmart (WMT ).

Other tariffs still in effect include 25% duties on aluminum, autos, and other goods from Canada and Mexico not covered by the United States- Mexico-Canada Agreement, as well as 10% tariffs on all other imports.

Deutsche Bank Head of FX Research George Saravelos wrote in a late Wednesday note to clients that even as Trump eases on some of his trade policies, "the damage has been done," when it comes to global business and consumer confidence.

"Even if the tariffs are permanently suspended, damage has been done to the economy via a permanent sense of unpredictability in policy," Saravelos. "The events of the last few weeks will resonate amongst global economic partners during the upcoming negotiations on trade and indeed for many years to come. The desire to build greater strategic independence from the U.S. across all fronts will be here to stay."

Kansas City Federal Reserve President Jeffrey Schmid said in prepared remarks on Thursday that the central bank will be keen to adapt policy to inflation threats rather than the fundamentals like slowing growth when they make further decisions on interest rates.

"One enduring lesson of the high inflation period of the 1970s and early 1980s was that once inflation is embedded in expectations, it becomes much more difficult to contain," Schmid told his home district. "Now, with renewed price pressures likely, I am not willing to take any chances when it comes to maintaining the Fed's credibility on inflation."

Consumer Prices unexpectedly declined in March, the Bureau of Labor Statistics reported Thursday, offering a bright spot amid heightened uneconomic uncertainty. However, the report also suggested that demand was softening as recession fears grip both consumers and business owners.

The consumer price index (CPI) ticked 0.1% lower, marking its first decline since May 2020 and falling from February's gain of 0.2%. Annually, the CPI rose 2.4% in March after rising 2.8% in February. Core CPI, which excludes volatile food and energy prices, gained 0.1% on the month and 2.8% year-over-year, compared with February's gains of 0.2% and 3.1%, respectively.

Comcast Bets Big On UK Tourism With First Universal European Theme Park

Benzinga News — Wed, 09 Apr 2025 13:18:36 -0400

Comcast Corp (CMCSA ) owned NBCUniversal on Tuesday announced it is heading to Europe with plans to open its first-ever theme park and resort on the continent, marking a major expansion of its entertainment footprint.

The new complex will be located just south of Bedford in the United Kingdom, roughly 35 minutes by train from London.

The ambitious project is being developed by the Universal Destinations & Experiences division. The resort will include a full-scale theme park with multiple immersive worlds, a 500-room hotel, and a dedicated retail and dining area.

Comcast purchased the 476-acre property in Bedford in 2023. The area has strong transportation connections, allowing more than 80% of England's residents and around half of the entire U.K. population to reach it within two hours.

"The unparalleled storytelling and technological innovation that the incredible team at Universal Destinations & Experiences brings to life is a perfect complement to the British creative arts and tourism industries," said President of Comcast, Mike Cavanagh.

The strategic location near mainland Europe is also anticipated to attract significant tourist traffic, positioning it as a likely contender for one of the most visited destinations in the area.

The proposed U.K. development is still in its preliminary phase and depends on securing planning permission from government authorities.

A detailed application is set to be filed in the next few months, with construction likely to commence in 2026 if approved. This move comes after over a year of research, including feasibility assessments and market evaluations.

"Expanding into Europe presents us with a significant opportunity to reach new fans and share the incredible experiences our team creates," said Chairman and CEO of Universal Destinations & Experiences, Mark Woodbury.

As Universal looks to broaden its global presence, it is simultaneously growing its footprint within the United States. Over the next two years, the company intends to launch three new theme parks across the country.

Leading the lineup is Universal Epic Universe in Orlando, Florida, set to debut this May. Touted as the company's most innovative development to date, the park has already generated $11 billion in nationwide economic impact and supported the creation of tens of thousands of jobs.

Next on the calendar is Universal Horror Unleashed, a horror-focused attraction set to launch in Las Vegas in late 2025. That will be followed by Universal Kids Resort in Frisco, Texas, in 2026, the company's first park tailored specifically for families with young children.

Price Action: CMCSA shares traded higher by 0.33% at $32.95 at the last check on Wednesday.

Wall Street Roars As Trump Pauses Tariffs For Non-Retaliator, Hikes China Duties To 125%

Benzinga News — Wed, 09 Apr 2025 13:18:21 -0400

Wall Street roared higher on Wednesday in a dramatic reversal of sentiment, as investors cheered a surprise announcement from President Donald Trump: a 90-day pause on tariffs for countries that have not retaliated against U.S. trade measures.

The news ignited a broad risk-on rally, catapulting major indices to multi-month highs and sending volatility plunging.

Trump's latest Truth Social post slammed China for showing "a lack of respect" and declared an immediate 125% tariff hike on Chinese goods.

"At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable," he said.

He praised the over 75 countries that, in his words, "have not, at my strong suggestion, retaliated in any way, shape, or form."

As a reward, those countries would benefit from a temporary 10% reciprocal tariff and a 90-day pause on additional duties.

During a White House press conference, Treasury Secretary Scott Bessent sought to translate the president's fiery rhetoric into market policy terms.

He described the tariff realignment as a necessary correction to "decades of imbalances in global trade."

"The market didn't understand Trump's maximum level tariffs," he said.

Bessent delivered a series of sharp jabs at Beijing. "They sell us five times what we sell them," he said. "It's an own goal by China." He also accused Beijing of exposing itself to the world as "the bad actor," and argued that Trump's move creates the leverage to correct the deficit.

"They've showed themselves to the rest of the world that they are the bad actor," Bessent stated

Regarding the new level of universal tariffs, Bessent said that "10% is a temporary floor," which gives "more certainty now"

Equity markets skyrocketed. The Nasdaq 100 - as tracked by the Invesco QQQ Trust (QQQ ) - exploded 10% higher, its strongest session since October 2020.

The S&P 500 jumped 7.6% to above 5,350, while the Dow Jones Industrial Average soared 6.8%, topping 40,000. Small caps joined the party too, with the Russell 2000 climbing 9.1%.

Volatility collapsed, as the CBOE VIX Index plunged more than 27%, reflecting the market's sudden embrace of risk.

Every sector in the S&P 500 traded deep in the green, led by technology and consumer discretionary.

Within the tech sector, the Magnificent Seven saw explosive gains across the board as investors piled back into mega-cap growth theme:

Meta Platforms Inc. (META ) surged 10.05% to $561.73
Microsoft Corporation (MSFT ) climbed 8.21% to $383.69.
Amazon.com Inc. (AMZN ) advanced 8.85% to $185.77.
Apple Inc. (AAPL ) rallied an impressive 11.72% to $192.63.
Tesla Inc. (TSLA ) led the pack with a 16.75% jump to $259.02.
Alphabet Inc. (GOOG ) (GOOGL ) rose 7.37% to $157.38.
Nvidia Corp. (NVDA ) skyrocketed 14% to $110.76.

All S&P 500 stocks rallied, with the top performers being United Airline Holdings Inc. (UAL ), Microchip Technology Company (MCHP ) and SanDisk Corp. (SNDK ), up 22%, 21% and 20%, respectively.

BofA Flags Rising Risks For Gaming And Lodging Firms As Valuations Tumble

Benzinga News — Wed, 09 Apr 2025 13:16:54 -0400

BofA Securities analyzes the extent of tariffs and the macroeconomic situation's effect on the earnings of gaming and lodging companies.

Since BofA's previous report on April 1, stocks in the lodging and gaming sector have dropped 11% % -25 %, underperforming the S&P 500's 16% decline.

Rising tariffs have significantly increased recession risks, with the sector now pricing in an 85% % -100 % chance of a downturn.

Investor concerns have escalated from market correction to a potential full-scale recession. A tariff-driven slowdown could cut sector revenues by 2%-4% and EBITDA by 3%-8%.

Recessions differ in nature, but the past three saw average peak-to-trough GDP drops of 5.1% and 10% in RevPAR.

According to the analyst, sub-sector sensitivity varies, with regional gaming and skiing less affected, while hotels and timeshares are more exposed.

Earnings risk is highest for gaming operators and lodging REITs due to their high operating leverage. COVID and GFC downturns lasted about 67 days; current declines are 55 days in, said the analyst.

A 1% GDP decline could reduce hotel RevPAR by 2%-4%, broader sector revenue by 2%-4%, and EBITDA by 3%-8%.

Tariffs are projected to impact GDP by 1%-1.5%, amplifying pressure on hospitality earnings.

Early data from Apple Hospitality REIT Inc (APLE ) signals underperformance, with potential RevPAR guidance cuts of 2% to 3% and flat growth for the U.S. in 2025.

Domestic gaming stocks are currently trading at notably low valuations, with 2025 EBITDA multiples at 6.5x and free cash flow yields at 15%, while operating companies are at 6.3x and 20%, respectively, said the analyst.

These figures sit one standard deviation below long-term averages, hitting levels last seen in 2022 and even lower than in 2016 and 2018.

Lodging C-Corps are also below historical norms, except for Hilton Hotels Corporation (HLT ), which still trades at a premium.

Lodging REITs have dropped to valuation lows only previously observed during the COVID-19 and Global Financial crises.

Meanwhile, timeshare valuations are also depressed, and Vail Resorts Inc is now trading at its lowest multiple since 2011.

China May Hit US Where It Hurts Amid Trump's Tariff War — Services Trade In Crosshairs, With Walt Disney, IMAX And Warner Bros. Discovery In Focus

Benzinga News — Wed, 09 Apr 2025 13:16:47 -0400

As Washington doubles down on its trade war with China, and tariffs now going as high as 104%, some leading experts believe that the Middle Kingdom might have an ace up its sleeve, that could hit the United States where it hurts most-Services.

A vast majority of U.S. imports from China are tangible goods, whereas its exports to the country largely comprise services, and this includes tech solutions, consulting services, law firms, and even Hollywood movies, among others. China, in fact, runs a $32 billion deficit with the U.S. on services.

What Happened: Two widely followed bloggers in China with connections within the Chinese Communist Party have released a seemingly identical list of measures that the country is planning in retaliation against the tariffs imposed by the Trump Administration, reported Bloomberg.

Among the list of measures shared by Ren Yi, the grandson of a former Guangdong province Communist Party chief, and Liu Hong, a senior journalist at Xinhua, the state-run news agency, includes a plan to "reduce or ban the import of U.S.-made films."

Besides this, China plans to target the U.S. services sector in several other ways, such as restricting American companies from taking part in Chinese government procurement processes and limiting the cooperation between Chinese companies and U.S. law firms and consultancies.

Why It Matters: In China's $17.7 billion box office, Hollywood movies managed to gross a little under $600 million in 2024, while the total U.S. and Canadian box office numbers during the same period stood at $8.6 billion. So, the move is expected to have a sizable impact on the industry.

Stocks like Walt Disney Co. (DIS ) will be in focus considering its globalized IP, with several multi-million dollar hits over the years. It also has a sizable merchandising and theme park business in China, which will be impacted. Warner Bros Discovery Inc. (WBD ) is next in line, with several international licensing deals in the country that could be cut short.

However, the hardest hit could be IMAX Corp. (IMAX ), which derives 23% of its revenue from China, where 45% of all IMAX screens are located.

Several other companies provide software, consulting, and related services in the Mainland, such as Salesforce Inc partnering with Alibaba Group Holding Ltd. (BABA ) to offer services in the country, however, given the opaqueness of the nation's financial markets, and the kind of barriers imposed, there isn't a lot of clarity on the kind of impact a tariff on services would have.

Affirm And Shopify Expand 'Buy Now, Pay Later' To Canada And UK In Global Growth Push

Benzinga News — Wed, 09 Apr 2025 13:16:32 -0400

Affirm Holdings, Inc. (AFRM ) and Shopify Inc. (SHOP ) announced on Wednesday that they are accelerating their global expansion plans.

Shopify merchants in Canada with early access can now offer Shop Pay Installments, exclusively powered by Affirm, to shoppers, marking the product's first availability outside the U.S.

Shop Pay Installments will become available to Shopify merchants in Canada and the U.K. in general this summer, with cross-border commerce capabilities between the U.S., Canada, and the U.K. to follow.

The companies plan to expand to Australia and Western Europe next, starting with France, Germany, and the Netherlands.

Affirm looks forward to engaging with its local constituents, including shoppers, merchants, capital partners, and regulators. Affirm Holdings stock plunged 42% year-to-date.

In March, Affirm Holdings expanded its multi-year deal with JPMorgan Chase & Co's (JPM ) JP Morgan Payments unit, further integrating Affirm's pay-over-time solutions into the bank's Commerce Platform.

In March, the company lost its exclusive Walmart Inc (WMT ) loan partnership after Klarna announced a collaboration with OnePay to offer installment loans at Walmart.

Goldman Sachs analyst Will Nance estimated that Walmart's contribution to Affirm's calendar 2024 GMV is roughly ~$2.2 billion (7% of the total). However, Affirm subsequently disclosed that Walmart comprised 5% of GMV (versus the analyst's ~5-10% estimate) and 2% of operating income (versus the analyst's 10-19% impact estimate).

Affirm Holdings is poised to benefit from BNPL's growth in e-commerce, the younger generation's preference for installment financing, and BNPL's more tailored credit offerings, as per Nuance.

Price Action: At the last check on Wednesday, AFRM stock was up 4.11% to $37.94, while SHOP was up 2.18%.

'I'm A Fan Of Free Trade': Robinhood CEO Vlad Tenev Expects Tariff Madness To Be Resolved 'Before Too Long'

Benzinga News — Wed, 09 Apr 2025 13:15:54 -0400

Robinhood Markets Inc (HOOD ) pioneered commission-free trading, so it's no surprise that Robinhood co-founder and CEO Vlad Tenev is a "fan of free trade."

What To Know: Wednesday on CNBC's "Squawk Box," Tenev discussed the one thing at the top of every investor's mind right now: tariffs.

"It probably wouldn't surprise you to hear that, generally speaking, I'm a fan of free trade," Tenev said in a nod to Robinhood's commission-free investing model.

President Donald Trump's sweeping reciprocal tariffs went into effect on Wednesday. Markets are jittery as investors await updates on potential negotiations to lower the new duties.

Tenev told CNBC that the one good thing about tariffs is that they can be modified or removed just as quickly as they were introduced. What's "tricky" is when tariffs are not bilateral, he said.

"If there [are] restrictions other countries impose on us and we're not doing something about that then we can get into a tricky situation. I think the equilibrium - where we end up - is hopefully going to be something close to bilateral free trade," Tenev said.

The Robinhood CEO didn't want to make a prediction about how negotiations will play out, but he did note that he expects the trade disagreements to be resolved "before too long."

In the meantime, Robinhood customers are approaching the drawdown in markets in various ways. Some investors are depositing cash and buying the weakness, while others are using more sophisticated instruments to play the volatility or even bet on further downside, he said.

"The longer the tariffs go on, the more companies will have to adjust. And I think part of the hope is that over the very, very long run, this leads to increased U.S. manufacturing domestically ... and I think to some extent, we all want that. Short term, I think there's uncertainty here and we're all watching," Tenev said.

HOOD Price Action: Robinhood shares were up 1.68% at $34.74 at the time of publication Wednesday, per Benzinga Pro.

This Beverage Maker, Tobacco Company And Packaged Food Giant Outshine In A Recession

Benzinga News — Wed, 09 Apr 2025 13:15:36 -0400

BofA Securities analysts Bryan D. Spillane, Lisa K. Lewandowski and Peter T. Galbo have put forward on Tuesday their research findings on consumer staple companies in the face of a potential recession.

The analysts said consumer staples have historically outperformed the S&P 500 in most recent recessions, suggesting a defensive edge.

However, the analysts warned that current conditions, such as lingering high prices and weak volume growth, may limit their resilience in a future downturn.

Still, their limited exposure to new tariffs could make the sector more appealing than others, potentially helping sustain valuation multiples.

During recessions, the Consumer Staples sector stock prices are primarily influenced by earnings per share (EPS) rather than sales growth.

Analysis shows that forward EPS estimates account for over 90% of stock price movement across key subsectors like Beverages, Household & Personal Care (HPC), Packaged Food, and Tobacco, with the correlation being the tightest Beverages and HPC.

The analysts noted that this highlights the critical importance of earnings strength when evaluating stock performance in uncertain economic conditions.

A review of six past recessions reveals that certain Consumer Staples stocks consistently outperformed the S&P 500.

Campbell Soup Co. (CPB ), Colgate-Palmolive Co. (CL ), General Mills Inc. (GIS ), McCormick & Co. (MKC ), PepsiCo Inc. (PEP ), and Hormel Foods Corp. (HRL ) each posted a 100% success rate in outperforming the index during those downturns.

In the last four recessions with the most comprehensive data, McCormick, General Mills, and Church & Dwight Co. Inc. (CHD ) delivered the strongest relative performance.

Top-performing Consumer Staples stocks in a potential downturn will likely share three traits: profit flexibility to offset revenue pressure and rising costs, strong U.S. manufacturing presence to limit tariff-related inflation, and solid balance sheets capable of sustaining share buybacks to boost earnings per share.

Analysts see McCormick, Coca-Cola Co. (KO ) and Philip Morris International Inc. (PM ) as well-defended, with Keurig Dr Pepper Inc. (KDP ), Molson Coors Beverage Co. (TAP ) and Altria Group Inc. (MO ) in the next tier of potential outperformers.

Temu, Shein Brace For Impact As Trump's Tariff Torpedo Blows Up The $800 Loophole

Benzinga News — Wed, 09 Apr 2025 13:15:19 -0400

The party's over for dirt-cheap Chinese fashion hauls. President Donald Trump just closed the "de minimis" loophole, a trade exemption that allowed foreign e-commerce titans like Temu and Shein to ship low-cost packages (under $800) into the U.S. tariff-free.

Now, it's 90% duties or $75 per item. Come June 2025, that jumps to a scorching $150.

Trump Closes The Door, Then Slams It

Trump didn't just end the exemption. He tripled the planned levy in a move aimed at countering China's retaliatory tariffs and, officially, to crack down on the flow of synthetic opioids like fentanyl. His executive order, signed last week, targets shipments from China and Hong Kong outside the international postal system.

These low-value parcels, which previously enjoyed a duty-free ride into American closets, now face a brutal cost hike.

The Commerce Department claims it is finally equipped to process and collect tariff revenue on these micro shipments, declaring the systems are "ready."

Ready or not, the bill is coming due.

Retail Fallout Is Already Here

Forever 21, now liquidating its stores, blamed Temu and Shein's ultra-low prices for gutting its customer base. "The ability for non-U.S. retailers to sell at drastically lower prices has significantly impacted us," the company said in court, reported Axios.

Temu, operated by PDD Holdings Inc (PDD ), and fast-fashion giant Shein have long thrived on this duty-free model.

With the loophole dead, both giants will face a new reality: play by the rules or pay a premium for every glitter top and gadget they send stateside.

Taiwan Semi Could Face More Than $1 Billion In US Penalty Over Alleged Huawei Chip Link: Reuters

Benzinga News — Wed, 09 Apr 2025 13:14:59 -0400

Taiwan Semiconductor Manufacturing Co (TSM ) is susceptible to a minimum $1 billion fine for Huawei Technologies Co AI processor allegedly procuring its chip.

Lately, the Taiwanese contract chipmaker made around three million chips that matched Sophgo's design and likely ended up with Huawei, Lennart Heim of RAND's Technology in Arlington told Reuters.

All three companies have previously denied violation of U.S. embargo norms.

Taiwan Economy Minister Kuo Jyh-huei told Reuters his ministry did not know of any penalty.

The U.S. Department of Commerce has been investigating Taiwan Semiconductor's alleged work for China-based Sophgo, Reuters reported, citing unnamed sources familiar with the matter.

Since 2019, the U.S. has restricted Huawei from receiving goods made with U.S. technology, citing national security threats. The Biden administration has also slapped additional semiconductor technology embargoes on China, limiting its access to advanced semiconductor technology, including artificial intelligence technology.

The penalty could reach up to twice the value of transactions that violate the rules.

Trump had criticized Taiwan for allegedly stealing U.S. semiconductor technology, leading to huge trade deficits for Washington. He also blasted Taiwan for the lack of a defense treaty, as the U.S. is a key military backer of Taiwan.

Trump also suggested scrapping U.S. subsidies to chipmakers like Taiwan Semiconductor to build fabs in the country. Last week, the U.S. imposed a 32% levy on imports from Taipei. Trump also warned against potential levies on semiconductors.

In March, Taiwan Semiconductor announced plans to make a fresh $100 billion investment in the U.S., which includes building five additional chip facilities.

Taiwan Semiconductor stock has plunged 30% year-to-date. Steven Tseng of Bloomberg Intelligence expects the tariffs to affect consumer demand, indirectly reducing orders for Taiwan Semiconductor-manufactured chips. Goldman Sachs downgraded Taiwan equities to underweight, citing high exposure to U.S. exports.

Price Action: TSM stock is down 0.40% at $140.80 at the last check on Wednesday.

Wall Street's 'American Exceptionalism' Trade Falters As Dollar, Stocks, Bonds All Slide

Benzinga News — Wed, 09 Apr 2025 09:23:38 -0400

At the start of 2025, exposure to the U.S. dollar and American assets like equities and Treasuries was a staple in global investment portfolios, riding high on the back of a resilient economy and a dominant U.S. exceptionalism narrative.

For years, the global investment narrative leaned heavily on American dominance. Strong tech innovation, high productivity and relatively better demographics helped maintain a performance gap between U.S. equities and their global peers.

That conviction, however, is unraveling just four months later, as escalating trade tensions-spurred by President Donald Trump's aggressive tariff push-have dramatically altered the outlook for the world's largest economy.

The U.S. dollar and American assets, including both stocks and bonds, are experiencing a broad selloff, raising concerns among investors and challenging assumptions about the stability of U.S. markets.

Why Investors Perceive The US Isn't Safe Anymore

After several days of carnage on Wall Street, investor sentiment remains deeply negative, but the market reaction is beginning to signal something more concerning than just an equity selloff.

The U.S. Treasury market, traditionally a safe haven during periods of market stress, is no longer playing its usual role.

Yields on the 10-year U.S. Treasury note spiked by 17 basis points during Wednesday's morning session, reaching 4.45%. That move - occurring in tandem with steep equity losses - is counterintuitive.

Typically, bonds rally and yields fall as investors seek safety when stocks tumble. The SPDR S&P 500 ETF Trust (SPY ) is now teetering on the brink of a bear market, down nearly 20% from its recent peak, yet Treasuries are offering no refuge.

Instead, bond prices are falling sharply. The iShares 20+ Year Treasury Bond ETF (TLT ) has declined 3.5% over the last three trading sessions and slid another 3% in premarket trading on Wednesday.

This marks the worst four-day stretch since 2022, when Treasuries plunged amid the Federal Reserve's rapid-fire rate hikes to combat soaring inflation.

Unlike in 2022, the current bond selloff appears to be driven less by inflation or rate expectations and more by growing concerns about the broader appeal of U.S. assets.

Investors Are Liquidating Everything, Even Risk-Free Treasuries

Worryingly, it suggests that investors are liquidating even high-quality, dollar-denominated holdings to raise cash, as noted by a Citi research report published this week.

"Much of the recent focus has been on the anomalous positive correlation between USD and US stocks," Bank of America Global Rates and Currencies team wrote in a note Wednesday.

"The correlation shifts are consistent with rising U.S. risk premium, 'peak U.S. exceptionalism,'" said Bank of America. The note advised watching official data and Treasury auctions to assess the changing nature of foreign demand, particularly from unhedged buyers.

"The backdrop of U.S. exceptionalism in recent years has leaned against FX-hedging U.S. equities from a foreign investor perspective," wrote Goldman Sachs analysts. "In a few short months, those conclusions have flipped."

Goldman's FX strategist Michael Cahill said that if tariffs continue to erode corporate margins and reduce real consumer incomes, the central pillar of a strong dollar may crack. The dollar index is already showing signs of strain after months of bullishness.

"80 days ago in Davos, most common phrase was "American exceptionalism." You heard everywhere. I would say probably every meeting I went to, everyone is focusing on how to do more in the United States. And obviously that's been thrown out right now," said BlackRock CEO Larry Fink during an event at the Economic Club of New York.

Jefferies strategist Chris Woods also believes that the U.S. has likely peaked in terms of its share of global stock market capitalization. He sees limited upside for U.S. equities amid high valuations and slowing growth, and said that emerging market equities could begin to outperform if the dollar weakens further.

According to DataTrek Research, the so-called "American exceptionalism trade" relied on a virtuous cycle: rising stock prices drove capital allocation and underpinned economic policy that reinforced financial markets.

This self-sustaining loop has endured for 15 years, but a prolonged bout of volatility could cause lasting damage.

"A few weeks of turmoil does not necessarily threaten it. A few months of ever-lower stock prices, however, risks permanently damaging investors' confidence in its foundations," DataTrek said.

The sharp selloff in U.S. Treasuries is not indicative of systemic trouble, Treasury Secretary Scott Bessent said Wednesday, calling the move a typical market dislocation driven by leveraged investors unwinding positions - not a sign of deeper instability.

While downplaying domestic risks, Bessent did strike a more hawkish tone on China, suggesting that Beijing could provoke broader global instability if it retaliates against tariffs by weakening its currency.

The U.S. imposed a 104% tariff on Chinese imports, with the impact beginning overnight, while Beijing fired back by raising tariffs on American goods to 84%.

Trump Tariffs Push EU To Hit $23 Billion In US Exports, Including Orange Juice, Poultry, And Steel From Red States

Benzinga News — Wed, 09 Apr 2025 09:23:31 -0400

In response to President Donald Trump's renewed tariff offensive, the European Union is responding with a strategic move of its own, focusing on American exports from conservative heartlands in the U.S., taking aim at farm produce and steel from red states.

What Happened: According to Brussels' draft plan, accessed by Politico, the EU is looking to deliver a blow that might sting the Trump administration politically.

The draft plan allegedly highlights Brussels' intent to introduce duties of up to 25% on almost €22.1 billion (roughly $23.9 billion) worth of American products, ranging from high-volume exports such as soybeans and steel to more specific items like ice cream from Arizona, electric blankets from Alabama, and pasta from Florida.

The rollout is set to come in phases: revived duties on products like orange juice are likely to start on April 15, and a second batch-including steel and white chocolate-will follow on May 16.

A final round of duties, including almonds and soybeans, is set to be implemented on December 1. According to the report, EU member states are expected to give the plan their go-ahead this week.

Why It Matters: The EU's response goes beyond trade into the realm of tactical politics.

By zeroing in on exports from GOP-dominated states, it is exerting economic pressure on the areas where Trump typically receives support.

Top targets include soybean, with most of the shipments to Europe originating from Louisiana. Other impacted products include beef from Kansas, poultry Southern states, and cigarettes from Florida.

U.S. producers, already threatened by global competition and China's retaliatory measures, have raised alarms, but the Trump administration is showing no signs of going back on its policies.

Delta Air Lines Wants To Protect Margins And Cash Flow Citing Economic Uncertainty, Does Not Reaffirm FY25 Outlook

Benzinga News — Wed, 09 Apr 2025 09:23:23 -0400

Delta Air Lines, Inc. (DAL ) shares are trading higher premarket after the company reported better-than-expected first-quarter 2025 results.

Delta reported fourth-quarter operating revenue growth of 2% year-over-year to $14.04 billion, beating the consensus of $13.02 billion. Adjusted operating revenue was $12.98 billion (+3.3% YoY)

The adjusted average fuel price was $2.47 per gallon, down from $2.79 in last year's quarter. Adjusted EPS was $0.46 (+2% YoY), beating the consensus of $0.38.

Total passenger revenue for the quarter grew 3% year over year to $11.48 billion; cargo revenue grew 17% year over year to $208 million, and Other revenue was $2.352 billion (-4% year over year).

Delta recorded an adjusted operating income of $591 million, down from $640 million YoY, with an adjusted operating margin of 4.6%, down 50 bps.

Adjusted operating expenses increased by 4% YoY to $12.388 billion, and Adjusted Non-fuel costs were $9.875 billion (+7% YoY) for the quarter.

Delta generated an adjusted operating cash flow of $2.44 billion (-1% Y/Y) in the March quarter, and free cash flow stood at $1.28 billion.

As of the March quarter, Delta reported adjusted net debt of $16.9 billion, down $1.1 billion from year-end 2024. Total liquidity was $6.8 billion, including $3.1 billion in undrawn revolver capacity.

The passenger load factor dropped 81.4% from 82.7% last year. DAL's Air Traffic Liability ended the quarter at $10 billion.

Delta's Chief Financial Officer, Dan Janki, noted that the company delivered better-than-expected results despite early-year weather challenges. "Our teams ran a strong operation... enabling us to drive efficiency and deliver non-fuel unit cost growth of up 2.6 percent over prior year," he said. Janki added that as Delta reduces capacity growth, it is "taking incremental action to manage costs," and expects non-fuel unit cost growth to align with its long-term target of low-single-digit increases in the second quarter and beyond.

"With broad economic uncertainty around global trade, growth has largely stalled. In this slower-growth environment, we are protecting margins and cash flow by focusing on what we can control. This includes reducing planned capacity growth in the second half of the year to flat over last year while actively managing costs and capital expenditures," commented Ed Bastian, Delta's chief executive officer.

"We expect June quarter profitability of $1.5 to $2 billion. Given the lack of economic clarity, it is premature at this time to provide an updated full-year outlook. Given our position of strength, our bias toward action, and the decline in fuel prices, Delta remains well positioned to deliver solid profitability and free cash flow for the year. I expect that our financial results will continue to lead the industry and validate our strategy to create differentiation and greater financial durability," added Bastian.

Second Quarter 2025 Outlook: DAL's total revenue is expected to be down 2% to up 2% over the prior year, with an operating margin of 11%-14%.

Adjusted Earnings per share are forecasted between $1.70 and $2.30 versus the $2.39 estimate.

Delta is not reaffirming its full-year 2025 financial guidance and plans to provide an update later in the year as market visibility improves.

Price Action: DAL shares are trading lower by 0.45% at $35.73 premarket at the last check on Wednesday.

Xi Jinping Hits Back: China Raises Tariffs On US Goods To 84%, Doubling Down On Trade War

Benzinga News — Wed, 09 Apr 2025 09:22:33 -0400

Xi Jinping's China has unveiled a significant hike in retaliatory tariffs on U.S. products, intensifying the ongoing trade war between the world's two biggest economies.

What Happened: On Wednesday, China declared that it will raise its reciprocal tariffs on U.S. goods to 84% from the previous 34% from April 10, reported the South China Morning Post.

This move comes in the wake of an intensifying trade conflict between the U.S. and China. This comes after the latest U.S. tariff hike - which brings levies on Chinese goods to more than 100% - took effect at the start of April 9.

In response to the new U.S. tariffs, the Ministry of Commerce not only filed a complaint with the World Trade Organization but also added six American companies to its unreliable-entity list. Additionally, it imposed export controls on 12 U.S. firms, prohibiting Chinese companies from supplying them with dual-use items-products that can serve both civilian and military purposes.

"China will firmly defend its interests, multilateral trade system and international economic order," stated the Chinese finance ministry online.

Why It Matters: This announcement comes on the heels of President Donald Trump's 104% tariff on Chinese imports, which sent stock futures plunging and major indexes to significant lows.

Despite the escalating trade war, many U.S. companies have chosen to stick with their operations in China, viewing it as a strategic value. A report commissioned by the U.S. Chamber of Commerce Foundation revealed that a majority of surveyed firms still see value in maintaining or expanding their presence in China, even as they increasingly view it as their biggest geopolitical risk.

This escalating trade conflict is likely to have far-reaching implications on the global economy, and all eyes are on how this situation will unfold in the coming days.

During the U.S. premarket session, U.S.-listed Chinese stocks traded mixed. Baidu Inc. (BIDU ) and Nio Inc. (NIO ) were in the red, while Xpeng Inc. (XPEV ) and Li Auto Inc. (LI ) saw modest gains.

Tariff Turmoil Sends Mortgage Rates Higher, 'Contract Signings Remain Well Below Normal Historical Levels'

Benzinga News — Wed, 09 Apr 2025 09:22:22 -0400

President Donald Trump's tariff announcements led to a sell-off in the stock market and prompted investors to move to safer assets such as Treasury bonds. The 10-year Treasury yield declined and the average 30-year fixed mortgage rate dropped from 6.75% to 6.55% last week.

Mortgage Rates: Despite the initial drop, mortgage rates rebounded as Treasury yields ticked back up. On Monday, the 30-year fixed-rate mortgage surged to 6.82%, marking the largest single-day increase of the year.

The current rate for a 30-year fixed mortgage sits at 6.85%, according to Mortgage News Daily.

Home Sales: Pending home sales ticked higher in early April with 72,000 newly pending single-family home sales and 15,000 condo transactions last week - the highest weekly volume since late April 2024, according to the National Association of Realtors.

"Despite the modest monthly increase, contract signings remain well below normal historical levels," said Lawrence Yun, NAR's chief economist.

"A meaningful decline in mortgage rates would help both demand and supply - demand by boosting affordability and supply by lessening the power of the mortgage rate lock-in effect."

Buyer Demand: Recent mortgage rate stability encouraged buyers, with purchase applications reaching their highest growth rate since late 2023 in early April. However, Trump's new tariff policies and China's retaliation have reintroduced uncertainty and volatility to the stock market and mortgage rates.

"The spring housing season is beginning with more sellers and a growing number of homes for sale," said Danielle Hale, chief economist at Realtor.com.

"But the high cost of buying coupled with growing economic concerns suggest a sluggish response from buyers in early spring," Hale added.

Inventory and Pricing Trends

Inventory Growth: Unsold inventory now stands at 691,000 single-family homes, 34.75% above 2024 levels, though Northeastern markets remain tight, according to Altos Research.
Price Pressures: Median pending sale prices reached $397,500, just 0.25% higher than 2024. Eight states - including Texas, Florida, and Arizona - show slight year-over-year declines, signaling localized cooling.
Price Reductions: The number of homes on the market with price reductions ticked up in the first week of April to 34.3%.

Real Estate ETF: Investors can find alternative exposure to the real estate market through the Vanguard Real Estate ETF (VNQ ), which tracks the MSCI US Investable Market Real Estate 25/50 Index, measuring the performance of U.S. equity REITs, specialized REITs and real estate management/development companies.

Market Update: Dow Skyrockets 3,000 Points, S&P 500 Posts Best Day Since 2008 on Tariff Pause

Rachel Hemple — Wed, 09 Apr 2025 08:59:49 -0400

Wall Street staged one of its largest rallies in history on Wednesday after President Donald Trump announced a pause on some of his tariffs on global trading partners, releasing much of the nervous tension seen in recent sessions to propel the broader market higher.

The Dow Jones Industrial Average surged nearly 3,000 points higher in its biggest one-day advance since March 2020, while the S&P 500 Index climbed about 10% in its largest one-session gain since 2008 and marketing its third-biggest gain in post-WWII history. The tech-heavy Nasdaq Composite also jumped 12% in its second-best trading day ever -- notching its largest one-day gain since January 2001.

Here's how the market settled on Wednesday:

S&P 500 Index (SPY ): +9.52% or +474.13 points to 5,456.90

Dow Jones Industrial Average (DIA ): +7.87% or +2,962.86 points to 17,124.97

Nasdaq Composite Index (QQQ ): +12.16% or +1,857.06 points to 17,124.97

Stocks soared higher on Wednesday after Trump dropped new tariff rates on imports from most countries to 10% for 90 days to better facilitate negotiations. About 30 billion shares were traded, marking the biggest volume day in Wall Street history, according to records started nearly two decades ago.

"I have authorized a 90 PAUSE, and a substantially lowered Reciprocal Tariff during this period, or 10%, also effective immediately," Trump wrote in a post on his social media platform Truth Social on Wednesday.

"Based on the lack of respect that China has shown the World's Markets, I am hereby raising the Tariff charged to China ... to 125%, effective immediately," Trump wrote in the same post. "At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A, and other Countries, is no longer sustainable or acceptable."

Trump's new announcement comes as a global trade war brews in direct response to his extreme tariff policies.

China announced it will raise its duties on U.S. imports to 84% from 34% starting April 10 in response to the Trump administration's tariff hike of more than 100% on Chinese goods that went into effect at midnight. According to the Office of the United States Trade Representative, the U.S. imported $438.9 billion in goods from China in 2024, while exporting $143.5 billion worth of goods.

The European Union on Wednesday voted to approve its first set of retaliatory tariffs on U.S. imports, starting April 15, along with a second set to take effect on May 15. The 27-nation bloc issued the levies in response to the White House's 25% tariffs on steel and aluminum.

"The E.U. considers U.S. tariffs unjustified and damaging, causing economic harm to both sides, as well as the global economy. The E.U. has stated its clear preference to find negotiated outcomes with the U.S., which would be balanced and mutually beneficials," the European Commission said in a statement.

Canada's 25% tariff on U.S.-produced autos also took effect Wednesday, with Canadian officials targeting vehicles made with parts that are not compliant with the USMCA. That means even if the vehicle is manufactured by General Motors (GM ), Ford Motor (F ) or Stellantis (STLA ) under the North American trade agreement, Canada will charge a duty on all parts used that were not made in Canada or Mexico.

Over the past few trading sessions, the Dow lost more than 4,500 points, while the S&P 500 briefly dropped into a bear market. The Nasdaq Composite had also lost more than 13% during that period; losses sustained by all three major averages have not been seen since the start of the coronavirus pandemic in 2020.

On the Earnings Front:

Delta Air Lines (DAL ) kicked off the latest earnings season on Wednesday, reporting better-than-expected fiscal first-quarter results, but issued a bleak forward outlook as consumers begin to spend like the economy is in a recession. The airline expects second-quarter revenue to rise or decline by 2% and adjusted earnings per share to come between $1.70 to $2.30.

"With broad economic uncertainty around global trade, growth has largely stalled," CEO Ed Bastian said during the company's earnings call with analysts. "In this slower-growth environment, we are protecting margins and cash flow by focusing on what we can control. This includes reducing planned capacity growth in the second half of the year to flat over last year while actively managing costs and capital expenditures."

Tariffs, Recession Fears Could Derail Wayfair, RH And Etsy, Says Analyst

Benzinga News — Tue, 08 Apr 2025 14:47:16 -0400

BofA analyst Curtis Nagle looks at the tariff and recession implications for home furnishing companies and Etsy Inc (ETSY ).

The upcoming 2025 tariffs could significantly disrupt the U.S. home furnishings industry, as a large share of imports originate from China and Southeast Asia, regions that now face tariffs as high as 50%, said the analyst.

Although companies previously managed similar tariffs in 2018 through cost-cutting and shifting production, those strategies may no longer be viable due to limited sourcing alternatives and low factory output amid weak demand.

Nagle warned that while retailers may attempt to pass added costs to consumers through higher prices, historical patterns show such hikes often reduce demand.

During the 2018 tariffs, even with mitigation, furniture prices rose and sales growth slowed from a 4% annual increase in 2018 to a 0.6% decline in 2019.

With broader tariffs expected in 2025 and few cost-cutting options available, price increases of up to 30% may be necessary, potentially leading to further demand erosion, especially in the event of broader inflation or a recession.

The Analyst cautioned that new tariff-driven price hikes, weak consumer confidence, a soft housing market and looming recession fears could further dampen demand.

While sales have already dropped 20% since 2021, a short-term buying boost may occur if consumers try to purchase before prices rise or if tariff relief is negotiated.

Wayfair Inc. (W ) is a leader in the home furnishings market, with a catalog of over 30 million items from 20,000 suppliers.

This vast supplier network allows the company to avoid inventory risks faced by traditional retailers while enabling strategic flexibility through vendor negotiations, product mix adjustments and pricing strategies.

Historically, Wayfair has demonstrated resilience during inflationary periods. The company successfully preserved its gross margins in 2018 and 2021 despite rising prices across the furnishings category.

However, the analyst warns that if the 2025 tariffs are fully implemented, Wayfair could struggle to fully pass along the higher costs to consumers.

The company's key sourcing partners may not be able to absorb the increased expense and significant price hikes could weaken demand.

RH (RH ) was initially viewed as well-positioned within the home furnishings sector heading into 2025 due to its plans to shift sourcing away from China and a track record of minimizing tariff-related expenses.

However, the analyst now sees RH at risk of facing considerable cost pressures if the tariffs are implemented as proposed.

The company's sourcing footprint includes 35% of its product volume from Vietnam, which would be hit with a 46% tariff and another 14% from Southeast Asian nations excluding China, where duties could exceed 30%.

Nagle reiterated a Neutral rating on the shares of Etsy Inc. and lowered the price forecast from $55.00 to $50.00.

ETSY may be less vulnerable to direct tariff impacts than its peers, but the analyst says it still faces significant headwinds.

Only a quarter of the marketplace's goods are imported and its exposure to China is minimal - under 2% of Gross Merchandise Sales (GMS). Canada and Mexico contribute less than 5% combined, with Canada being the larger contributor.

While tariff effects may be muted, Etsy's reliance on discretionary spending raises red flags amid growing recession fears.

As of the fourth quarter of 2024, nearly 70% of Etsy's GMS came from categories such as home goods, jewelry and apparel segments likely to suffer if consumers tighten spending.

US Companies Stick With China As Trump Tariffs Set To Take Effect: Report

Benzinga News — Tue, 08 Apr 2025 14:47:09 -0400

Despite mounting political and economic strain between the U.S. and China, many American companies remain reluctant to scale back their operations in the world's second-largest economy.

What To Know: According to a new report commissioned by the U.S. Chamber of Commerce Foundation and cited by The Wall Street Journal, a majority of surveyed firms still see strategic value in maintaining or expanding their presence in China - even as they increasingly view it as their biggest geopolitical risk.

The report, based on surveys and interviews with nearly 200 businesses, highlights a disconnect between Washington's push for "selective decoupling" and corporate America's entrenched reliance on China's manufacturing capacity, skilled labor, and vast consumer market.

Per the WSJ, roughly 70% of participating U.S. Chamber members indicated plans to maintain or grow Chinese engagement, despite concerns over Beijing's tightening regulatory environment and the rising specter of conflict across the Taiwan Strait.

What Else: Those long-term worries came into sharper focus Tuesday after White House Press Secretary Karoline Leavitt confirmed that President Donald Trump's 104% tariff on Chinese imports will take effect at 12:01 a.m. ET on Wednesday. "It was a mistake for China to retaliate," Leavitt said, reiterating the administration's hardline stance.

Financial markets quickly reversed early gains, with the SPDR S&P 500 ETF Trust (SPY ) closing down 1.7% and the SPDR Dow Jones Industrial Average ETF Trust (DIA ) sliding 1.2% on Tuesday.

The tariff announcement dampened hopes of near-term trade resolution and heightened fears of broader economic fallout, echoing concerns raised earlier Tuesday by Chicago Fed President Austan Goolsbee regarding potential growth slowdowns linked to trade policy.