- Asian Stocks Decline as Trump Tariffs Sap Risk: Markets Wrap
Asian equities dropped after President Donald Trump imposed a 25% tariff on US auto imports, prompting
investors to pare bets on riskier investments due to concerns about growth in the world’s largest economy.
Shares of automakers slid. Indexes in Japan, South Korea and Australia fell while stocks in Hong Kong and
India gained. Equity-index futures pointed to a steady open for US stocks while contracts for Europe indicated
a lower open. The Mexican peso slipped on the tariff announcement along with shares of automakers such as
Toyota Motor Corp., General Motors Co. and Ford Motor Co. The dollar fell after Trump downplayed
reciprocal tariffs. The quickly shifting stance on US trade sanctions on the nation’s allies and foes alike adds
to already heightened market concerns as investors race to assess the impact on global trade and economic
growth. Two months into Trump’s presidency, the mood in the market has turned wary as investors temper
their bullish views and the Federal Reserve signals it’s in no rush to adjust its interest-rate policy. - Dow closes more than 100 points lower, S&P 500 drops 1% as traders brace for new auto tariffs
Stocks dipped on Wednesday, led lower by tech, as pressure on the tariff front mounted. The S&P 500 lost
1.12% and ended at 5,712.20, while the Dow Jones Industrial Average fell 132.71 points, or 0.31%, to close at
42,454.79. The tech-heavy Nasdaq Composite shed 2.04% and closed at 17,899.01, as Nvidia shares dropped
nearly 6%. - Oil up on tighter supply risks; views mixed on Trump’s auto tariff impact
Oil prices nudged higher on Thursday on concerns about tighter global supply after the U.S. tariff threat on
Venezuelan oil buyers, while market players also grappled with the impact of Donald Trump’s latest
announcement on auto-sector tariffs. Brent crude futures were up 14 cents, or 0.2%, at $73.93 a barrel.
U.S. West Texas Intermediate crude futures also rose 14 cents, or 0.2%, to $69.79 a barrel at 0049 GMT.
On Wednesday, oil prices rose by around 1% on government data showing U.S. crude oil and fuel inventories
fell last week, and on the U.S. threat of tariffs on nations buying Venezuelan crude. India’s Reliance
Industries, operator of the world’s biggest refining complex, will halt Venezuelan oil imports following the
tariff announcement, sources said on Wednesday. Traders and investors were still assessing the impact
on oil demand from U.S. President Trump’s latest announcement of a 25% tariff on imported cars and light
trucks from next week. The view was that it could drive auto prices up, potentially impacting demand for oil,
but also slow down the switch to greener cars. - Gold rises as fears mount over Trump’s reciprocal tariff plans
Gold prices rose on Thursday as U.S. auto tariffs ratcheted up global trade tensions ahead of an April 2
deadline for reciprocal tariffs from the world’s largest economy. Spot gold rose 0.4% to $3,030.47 an ounce
as of 0247 GMT. U.S. gold futures gained 0.5% to $3,036.00. U.S. President Donald Trump on Wednesday
unveiled a 25% tariff on imported cars and light trucks starting next week, widening the global trade war.
Investors feared that Trump’s reciprocal tariffs, expected to take effect on April 2, might fuel inflation, slow
economic growth and heighten trade tensions. Concerns over Trump’s tariff policies catapulted gold to a
record high of $3,057.21 on March 20. Aakash Doshi, global head of gold at SPDR ETF Strategy, expects gold
will breach $3,100 in the second quarter and “the market could potentially push another 8%-10% higher by
end-2025 if the current macro and physical market tailwinds sustain for the yellow metal.” Goldman Sachs on
Wednesday raised its end-2025 gold price forecast to $3,300 per ounce from $3,100, citing stronger-than
expected ETF inflows and sustained central bank demand. - U.K. CPI fell to 2.8% in February; Reeves to deliver Spring Statement
U.K. inflation advanced less than expected in February, providing something of a relief to Chancellor Rachel
Reeves as she prepared to deliver her last Spring Statement to parliament. Annual consumer price inflation
rose 2.8% in February, below the 3.0% seen the prior month, below expectations but still considerably above
the U.K. central bank’s 2.0% medium-term target. The monthly rate rose 0.4%, above the 0.1% decrease seen
in January. Analysts had expected the CPI to rise 3.0% on an annual basis, and 0.5% on the month. Core CPI,
which excludes volatile energy and food prices, rose 0.4% on a monthly basis, with the annual rate at 3.5%,
from 3.7% in the prior month. This news comes as Chancellor Rachel Reeves is set to deliver her latest fiscal
update to parliament, with further cuts to welfare benefits and government departments expected in her
Spring Statement. The government announced big welfare spending reductions last week, but the chancellor
is set to expand the cuts after being told reforms to the system would save less than planned. Reeves is also
expected to announce an additional £2.2 billion pounds for defence spending as the major European
countries scramble to boost regional security. The UK’s economic performance has been pretty lacklustre for
the past few years, with low growth and rising prices. - Shares of Asia’s automakers fall as Trump announces 25% tariffs on car imports
Shares of Asia’s automakers fell after U.S. President Donald Trump announced he will impose tariffs on cars
not made in the country. Japanese automakers Toyota and Honda fell 3.69% and 2.91%
respectively. Nissan, which has two plants in Mexico, declined 2.92%, and Mazda Motor lost over
6%. Mitsubishi Motor fell 4.9%. South Korea’s Kia Motors, which has a manufacturing plant in Mexico,
dipped 2.76%. Shares of Chinese automakers Nio and Xpeng fell 3.94% and 1.97% respectively. These new
tariffs will go into effect April 2. White House aide Will Scharf explained that the tariffs will apply to “foreign
made cars and light trucks,” in addition to existing duties. The full details of the proclamation remain unclear,
as most cars consist of parts from various countries. These tariffs are also expected to bring in over $100
billion of new annual revenue to the U.S., Scharf estimated. “Every automaker that sells vehicles in the U.S.
depends on global supply chains for automotive parts, with many of them coming from China,” said Karl
Brauer, executive analyst at iSeeCars. “ - China’s industrial profits slip at start of the year as deflationary pressures, tariff risks mount
Profits at major industrial firms dipped 0.3% in the first two months this year, after three consecutive years of
sharp declines, supported by improved profitability in manufacturing and raw material sectors. A slew of Wall
Street banks have turned more upbeat on the country’s outlook this year, citing green shoots in the
economy, while acknowledging headwinds from tariffs remain on the horizon. - Nvidia led losses among Magnificent Seven stocks on Wednesday, falling 5.7% after the Financial Times
reported that China’s energy rules for advanced chips could dent the chipmaker’s sales
China’s National Development and Reform Commission is advising Chinese groups to use chips that meet
strict requirements in new data centers and expansion of existing facilities, according to documents reviewed
by the Financial Times. Nvidia’s H20 chip does not currently satisfy these new rules. Commission has
discouraged Chinese tech companies from purchasing H20 chips, according to unidentified people with
knowledge of the matter. Nvidia has prepared a solution to adjust the chips so they meet NDRC’s
requirements. - TD Cowen wrote that channel checks “indicate aggregate data center demand has increased Y/Y despite
more pervasive lease cancellations/deferrals by MSFT than initially thought, which created an opportunity
for both GOOG and META to backfill capacity”
“Hyperscale redesigns for higher densities are driving slower DC equipment purchasing, which we view
negatively for 1H25 VRT orders”. Vertiv shares fell 10.9%. Other AI infrastructure stocks also fell, including
Arista Networks and Super Micro Computer. Microsoft’s retrenchment in the last six months included lease
cancellations and deferrals, the TD Cowen analysts said in their latest research note, dated
Wednesday. Alphabet Inc.’s Google had stepped in to grab some leases Microsoft abandoned in Europe, the
analysts wrote, while Meta Platforms Inc. had scooped up some of the freed capacity in Europe. Microsoft
says it remains on track to spend about $80 billion building out AI data centers in its fiscal year that ends in
June. Executives have said the pace of growth should slow in the company’s next fiscal year. - Dollar Tree is offloading its Family Dollar chain for about $1 billion to Brigade Capital
Management and Macellum Capital Management a decade after buying the business
The deal, which is expected to close next quarter, marks a disappointing end to Dollar Tree’s bid to establish
itself as a discount giant, with a price tag that’s a steep discount to the nearly $9 billion it paid for Family
Dollar. Dollar Tree’s store count will roughly halve following the transaction. The deal “closes the book on a
sad and troubled chapter for Dollar Tree,” Neil Saunders, managing director at GlobalData, said. Dollar Tree’s
shares rose 3.1%. The retailer also reported results for the fourth quarter. Adjusted earnings of $2.29 a share
topped the average estimate of analysts. - Chewy shares edge up after active customer growth powers core earnings beat
Chewy (NYSE:CHWY) has reported core income in the fourth quarter that topped analysts’ expectations, as
the online pet food retailer said it was bolstered by a solid uptick in demand. Adjusted earnings before
interest, taxes, depreciation and amortization came in at $124.5 million during the period, compared with
Bloomberg consensus projections of $118.4 million. Net sales jumped by 14.9% versus a year ago to $3.25
billion in the 14 weeks ended on February 2, driven by an increase in active customers on the platform to
20.5 million. Both of the measures were above estimates. “Our performance was underpinned by strong
active customer growth,” said CEO Sumit Singh in a statement, adding that the business has “momentum”
heading into its 2025 fiscal year. For its first quarter, Chewy is guiding for net sales expansion of
approximately 6% to 7% year-over-year to a range of $3.06 billion to $3.09 billion. Analysts at Vital
Knowledge said Wall Street was looking for a forecast of $3.04 billion. Per-share profit is also seen at $0.30 to
$0.35, indicating a midpoint roughly in line with expectations of $0.33. Full-year net sales are tipped to
increase by 6%-7% to $12.30 billion to $12.45 billion, versus projections of $12.42 billion, while core income
margins are guided to be between 5.4%-5.7%. “This was modestly better than our expectations on revenue,
and we believe the guide still holds some level of conservatism,” analysts at Wolfe Research led by Shweta
Khajuria said in a note to clients. - Rivian Spins out Micromobility Business into New Startup—Also, Inc.
Rivian (NASDAQ:RIVN) today announced it has spun out its micromobility business into a new company: Also,
Inc. Also will focus on small, lightweight vehicles that are designed to meet the global mobility transportation
challenges of today and tomorrow. Recognizing the massive need for small electric form factors in enabling
the sustainable transition of our global transportation system, Rivian started a stealth program focused on
micromobility several years ago. The goal of this initial effort was to examine how Rivian’s strength in
software, electronics and electric propulsion could be applied to create an advantaged cost structure and
greatly enhanced product relative to currently available offerings. As these efforts advanced, it became clear
that Rivian’s approach had the potential to unlock a large opportunity that deserved to be its own company,
optimized around different products, brand positioning and markets. Rivian retains a substantial minority
ownership stake in Also and expects opportunities for future collaboration, which may include selectively
using some of Rivian’s retail footprint. In connection with the spin-off, ‘’Also secured a $105 million
investment from the venture capital fund, Eclipse Ventures, which will support Also’s next phase of growth.’’
Rivian Founder and CEO RJ Scaringe will serve on Also’s Board of Directors as its Chairman. “For the world to
fully transition to electrified transportation, a range of vehicle types and form factors will be needed,” said
Rivian Founder and CEO RJ Scaringe. “I am extremely excited about the innovations developed by the Also
team that will underpin a range of highly compelling micromobility products that will help define new
categories.”
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