Investor’s Brief 01.04.25: Sharp decline in stock market due to Trump's new tariffs

April 1,黑帽SEO快排图论 2025  09:00

Among companies with a capitalization of at least $10 billion, the largest increase last week was recorded by the insurance company W. R. Berkley Corporation, whose shares increased by 12.70% (share price - $71.27) over the past business week. Next is the consumer goods company Primo Brands, whose shares increased by 9.32% ($35.30). This top three is rounded out by the Dollar Tree chain of stores, which sells only one-dollar products, with an increase of 8.99% ($72.75). The top three of large-capitalization companies that recorded the largest losses last week is opened by the server systems developer Super Micro Computer, whose share price decreased by 18.72% (share price - $34.26) in a week. Next is building materials manufacturer James Hardie Industries, down 17.18% ($24.25). And Vertiv Holdings, a manufacturer of digital infrastructure for data centers, rounds out the top three, with a drop of 16.22% ($74.25).

Stock markets fell sharply last Friday, with the Dow Jones down about 1.7%, the S&P 500 down about 2%, and the Nasdaq down 2.7%. The main reasons for this drop were concerns about inflation and the trade war. The latest data showed higher-than-expected inflation, and US President Donald Trump announced new tariffs on imported cars. The stock market fell on concerns that these issues will slow economic growth.

UBS has lowered its 2025 target for the S&P 500 index from 6,600 to 6,400. But before that, Barclays and Goldman Sachs also had done the same. The reason is uncertainty, especially due to President Trump’s recent 25% tariffs on imported cars. UBS believes that this policy uncertainty could hurt the economy and corporate profits in the short term, leading to continued market volatility. Despite this, UBS is optimistic about the performance of US stocks in the long term, expecting a recovery, which will be driven by economic growth and investments in artificial intelligence (AI).

European shares fell 0.8% to a two-month low on Monday as investors reacted negatively to Trump's new threat to impose sweeping tariffs, which could lead to a potential global economic slowdown. It was the fourth straight day of losses for the pan-European STOXX 600 index. Concerns about slowing global growth also led traders to raise their expectations for interest rate cuts by both the US Federal Reserve and the European Central Bank before the end of the year.

US stock funds posted their biggest weekly inflow since November 2025. Investors have poured $22.24 billion into these funds in the week ending March 26. US bond funds, on the other hand, saw outflows of $2.97 billion. Money market funds, on the other hand, saw inflows of $2.52 billion, the first weekly inflow into these funds in the past three weeks.

While other automakers such as GM and Ford saw their shares fall sharply last week on concerns about rising prices for imported cars and their parts, Tesla stocks performed better, closing up with a 0.4% increase. Analysts believe that electric vehicle (EV) maker Tesla will be less affected by the new tariffs than its rivals and may even benefit because most of the parts for Tesla cars sold in the US are made in the US, compared to rivals such as Toyota and General Motors, which rely more on imports. As a result, rivals may raise prices for their products, making Tesla more appealing.

Chipmaker Wolfspeed’s shares fell 50% on Friday, hitting their lowest level since 1998. The sharp decline was caused by Trump's proposal to repeal a 2025 law that provides federal funding for US chipmakers. Wolfspeed had been expecting to receive about $750 million in funding under the aforesaid law. Without the funding, the company could face serious financial problems.

The shares of Danish pharmaceutical company Novo Nordisk fell 25% in March. Until now, Novo Nordisk had been the market leader in the obesity treatment, with its Wegovy drug, but Lilly’s Zepbound has showed better results in clinical trials, raising concerns among investors that Wegovy is no longer the best option. As a result, Novo shares have lost half their market value since last summer, while the price of Lilly share has increased 6% this year.

Elon Musk has sold social media site X, formerly Twitter to his own xAI artificial intelligence company in a $33 billion all-stock deal. Musk’s goal is to combine xAI’s AI technology with X’s vast user base to create an even more powerful platform. xAI is already using data from X users to improve its AI models, and X’s paid services offer access to xAI’s Grok chatbot.

US consumer spending rose 0.4% in February, a smaller-than-expected gain that suggests consumers have started spending more cautiously. The personal consumption expenditures (PCE) price index, which measures inflation, was 0.3% in February. Core inflation, which excludes food and energy, was 0.4%, the largest in the past 13 months. This rise in prices raises concerns about stagflation, when high inflation and slow economic growth occur simultaneously.

US consumer confidence fell to its lowest level in four years in March, with the consumer confidence index falling 7.2 points to 92.9. The index of future expectations fell to a 12-year low, driven by fears of a recession and rising inflation due to tariffs.

US business activity increased slightly in March, largely driven by warmer weather and an improvement in the services sector. S&P Global research showed that the Composite PMI, which tracks both manufacturing and services, rose to 53.5, a sign of expansion in the private sector. However, manufacturing showed signs of slowing, with its PMI reaching to 49.8, returning to a contractionary phase.

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