In a historic moment, President Donald Trump delivered the longest presidential address on record to Congress on Tuesday, spanning nearly two hours. During this extensive speech, he covered a wide range of topics including DOGE, tariffs, technology companies, tax policy, and more. Here are the key takeaways from the address.
In today's major story, the stock market experienced a significant setback, erasing its post-election gains amid ongoing concerns about the escalating trade war. Following the official escalation of tariffs, chaos reigned in the financial markets, as noted by Business Insider's Filip De Mott. The day marked the end of what many referred to as the "Trump bump," a surge in stocks that followed President Trump's victory in November, fueled by optimism regarding his pro-growth policies.
On Tuesday, the S&P 500 index closed down 1.2% at 5,778, just slightly below its closing value on Election Day (5,783). Interestingly, even the US dollar, which was expected to gain from inflationary tariffs, has been losing ground instead. However, there are still positive prospects as certain corners of the market may benefit from the tariffs, as highlighted by BI's Christine Ji.
Looking ahead, there may be a resolution to the tariff issues on the horizon. Commerce Secretary Howard Lutnick indicated that President Trump could announce a compromise deal with Mexico and Canada as early as today. Following these comments, US stock futures showed an uptick in premarket trading, reflecting the administration's history of closely monitoring stock market performance.
In the meantime, major retailers like Target and Best Buy are already discussing the impending impact of tariffs on consumer prices. During their earnings calls, both CEOs indicated that prices for various goods could increase due to the tariffs. Brian Cornell, CEO of Target, warned that grocery prices might rise as early as this week. Automotive prices are particularly at risk, and consumers should be aware that even purchasing from US automakers may not shield them from price hikes, as many domestic brands still rely on cross-border manufacturing.
BI's Graham Rapier and Benjamin Zhang have compiled a list of 39 cars and trucks that could see price increases due to the tariffs. However, for some businesses, tariffs may present an opportunity to demonstrate their commitment to keeping prices low, even if the tariffs do not significantly impact their operations.
In other news, a former Miss Universe judge revealed that CEO Anne Jakrajutatip allegedly attempted to interfere with the results of the 2023 pageant. Additionally, DOGE has seen a significant loss, with another $4 billion deleted from its 'wall of receipts.' In corporate news, Balyasny is closing its Madrid office after cutting its only portfolio manager there.
Education Secretary Linda McMahon outlined three goals aimed at overhauling the American school system in line with President Trump's vision. Meanwhile, Cerebral's former CEO has successfully raised seed funding from Morningside for a new mental health startup. A US agency advocating for mass firings has clarified that it does not possess the authority to terminate employees.
Here are three notable insights from the markets:
Goldman Sachs is preparing to make cuts, with reports indicating that between 3% to 5% of employees may be at risk, focusing particularly on those at the vice president level. Billionaire investor Bill Gross expressed concerns about the market's direction, warning that Trump's tariffs could slow economic growth by fueling inflation. He suggests that investors consider defensive stocks, including tobacco and Verizon, to weather any economic storms. Trump's chaotic start as president mirrors his real estate playbook, characterized by a flurry of executive orders and rapid policy changes, according to former associates from the real estate industry.Here are three significant trends in the tech sector:
Despite challenges from OpenAI's ChatGPT, Google remains dominant, processing over 5 trillion search queries annually, with a reported growth of over 20% since ChatGPT's launch. NFL games continue to dominate viewership, remaining the most-watched live television and internet programs, demonstrating that traditional viewing habits persist despite the rise of online platforms. The job market for software engineers is currently challenging, with job openings at their lowest in five years. While AI enhances efficiency for employed coders, it poses concerns for job seekers. However, there remains hope for those with strong technical skills.In business news, here are three important updates:
Concerns are rising over President Trump's pause on military aid to Ukraine, which could jeopardize the supply of essential American-made weaponry, including Patriot interceptor missiles crucial for Ukraine's defense against Russian attacks. Shopify has reportedly frozen funding for diversity, equity, and inclusion programs affecting its Black, Latino, and LGBTQ+ employees, as well as laying off staff dedicated to supporting Black and Indigenous merchants. The housing market presents a paradox for millennials, who are finally entering the market after years of high demand. However, forecasts suggest a significant shift in the housing landscape by the 2030s, potentially leaving young buyers at a disadvantage.Several noteworthy stories are making headlines today:
Four mistakes to avoid if you're on a Performance Improvement Plan (PIP), as advised by the CEO of Teal. A startup is planning to generate revenue by reviving the woolly mammoth. Rumors regarding Trump's deportation policies are creating a chilling effect on local businesses. Big Tech remains excited about quantum computing, though experts warn that significant breakthroughs may still be years away. Aberdeen has reversed its rebranding decision, admitting that the name 'abrdn' was not well-received. David Zaslav commented that moving away from the NBA was a 'great decision' for Warner Bros Discovery (WBD). Amazon is set to invest $100 billion in data centers this year, with energy firm GE Vernova contributing to this monumental effort.Keep an eye out for the release of the Federal Reserve Beige Book and earnings reports from Campbell's today.
