🚢 Tariff Tuesday Trade War

Good afternoon! Citigroup nearly pulled off the financial equivalent of a fat-finger apocalypse, almost wiring $6 billion to a client’s account thanks to an employee’s copy-paste mishap. The intended transfer amount was magnified over a thousand times before someone caught the error the next day—just a month after Citi nearly sent $81 trillion into the void. While no actual money left the bank, the incident was enough to send Citi’s execs into full crisis mode and remind everyone why the bank is still in regulatory hot water.

CEO Jane Fraser has been trying to clean up Citi’s act, but these blunders make it look more like a glitchy ATM than a financial giant. Regulators were notified, new controls were slapped on, and Citi insists this won’t happen again—because, you know, that’s always how it works. Meanwhile, somewhere, Revlon creditors who got that accidental $900 million in 2020 are probably reminiscing about the good old days.

⚡️Check out and consider joining our Twitter account: https://x.com/investinqai

MARKETS

• Wall Street got steamrolled Tuesday as fresh tariffs kicked in, sending stocks tumbling and wiping out the S&P 500’s post-election gains. The Dow cratered over 650 points, down 1.5%, while the S&P 500 slipped 1.2%, hitting a four-month low. The Nasdaq flirted with correction territory before making a brief recovery, only to end the day down 0.4%.

• The escalating trade war left investors on edge as the U.S. slapped tariffs on Canada, Mexico, and China—prompting swift retaliation from all three. The market reaction was swift, with over 80% of S&P 500 stocks closing lower. The Dow’s back-to-back plunges now total over 1,300 points, making for a rough week for the blue-chip index.

STOCKS
Winners & Losers

What’s up 📈

• Okta skyrocketed 24.27% after posting strong fourth-quarter earnings that surpassed expectations, giving investors a reason to celebrate (or at least not get locked out of their accounts). ( $OKTA )

• Super Micro Computer rebounded 8.51% after a rough stretch, bouncing back from recent sell-offs following its delayed earnings report. ( $SMCI )

• Walgreens Boots Alliance climbed 5.60% as the pharmacy chain nears completion of a $10 billion deal to go private. ( $WBA )

• On Holding gained 6% after the sportswear brand topped Q4 earnings and revenue expectations, though its 2025 net sales forecast was slightly below estimates. ( $ONON )

What’s down 📉

• Best Buy tumbled 13.30% despite beating Wall Street’s Q4 expectations, as the company warned that new tariffs would weigh on fiscal guidance. ( $BBY )

• Target dropped 3% even after a solid Q4 holiday performance, as management flagged concerns over weakening consumer confidence and potential tariff impacts. ( $TGT )

• Tesla sank 4.43% after data showed that its China-made vehicle sales plunged nearly 50% in February, hitting their lowest level in two years. ($TSLA )

• Auto stocks slid as new tariffs raised concerns over higher costs eating into profits: General Motors fell 4.56%, Stellantis dropped 4.38%, and Ford declined 2.88%. ( $GM ) ( $STLA ) ( $F )

• Financial stocks took a hit as investors worried about tariffs slowing economic growth: Capital One Financial lost 5.75%, Affirm Holdings fell 7.84%, and Morgan Stanley dropped 5.74%. ( $COF ) ( $AFRM ) ( $MS )

• Airline stocks declined sharply over economic concerns: Delta Air Lines fell 6.43%, United Airlines lost 5.96%, American Airlines dropped 4%, Allegiant Travel fell 9%, and Frontier Group declined 4%. ( $DAL ) ($UAL) ( $AAL ) ( $ALGT ) ( $ULCC )

• Cruise stocks weren’t spared either, with Royal Caribbean down 5.85%, Carnival sliding 5.8%, and Norwegian Cruise Line dropping 4%. ( $RCL ) ($CCL ) ( $NCLH )

• SoundHound AI slid 5.86% after announcing a delay in reporting its quarterly 10-K filing—never a great sign. ( $SOUN )

TRADE
Another Tariff Tuesday On Wall Street

Wall Street got a front-row seat to the opening salvo of Trump’s trade war, and it was anything but smooth sailing. The S&P 500 plunged 2% at the open, wiping out its entire post-election rally, before clawing back losses—only to close in the red. Meanwhile, bond yields whipsawed, the dollar slipped, and Bitcoin staged a rally as investors recalibrated their expectations.

Tariffs Hit, Markets Stumble

President Trump’s 25% tariffs on Canadian and Mexican imports took effect Tuesday, with swift retaliation from both countries. Canada slapped a matching 25% tariff on $100 billion worth of U.S. goods, while Mexico is set to announce its own countermeasures this Sunday. Meanwhile, China doubled down with new levies on U.S. agricultural goods and fresh restrictions on American companies, alongside a lawsuit at the World Trade Organization.

The result? Stocks tanked, gold spiked, and market volatility surged as investors tried to price in a shifting trade landscape. The Nasdaq managed to recover some ground, but the Dow stayed firmly in the red, reflecting ongoing uncertainty. The Canadian dollar and Mexican peso held steady, suggesting traders are betting these tariffs won’t last long.

Lutnick Hints at Tariff Relief

After the market close, Commerce Secretary Howard Lutnick hinted at a potential softening of Trump’s stance, saying the president could announce tariff relief for Canada and Mexico as early as Wednesday. That sparked a small rally in futures, but investors remain skeptical of any long-term resolution.

While Lutnick claimed Trump is willing to “meet Canada and Mexico in the middle,” Prime Minister Justin Trudeau accused the U.S. of acting in ‘bad faith’ and vowed further retaliation. Meanwhile, China’s response is only escalating, raising fears of a full-blown global trade war.

Stagflation Fears and Economic Fallout: It’s not just markets feeling the heat—U.S. consumers are in for a price hike. Economists warn that the new tariffs will push inflation higher, as businesses pass on costs to consumers. Morgan Stanley projects PCE inflation could jump 0.3 to 0.6 percentage points, pushing it closer to 3.2% in the coming months.

At the same time, GDP forecasts are crumbling. The U.S. trade deficit widened 26% in January as companies rushed to import goods before tariffs hit. The Atlanta Fed now projects a 2.8% GDP contraction, a stunning reversal from its earlier 2% growth forecast.

NEWS
Market Movements

• 📱 Apple unveils new M3-powered iPad Air with faster performance: Apple has refreshed its iPad Air lineup with the M3 chip, offering up to twice the speed of older models. The new tablet comes in 11- and 13-inch sizes, starting at $599, and supports the premium Magic Keyboard, which was previously exclusive to the iPad Pro. While the upgrade improves performance, Apple’s decision to exclude its latest M4 chip raises questions about its long-term positioning ($AAPL).

• 🚀 Okta stock surges 24% after blowout earnings report: Okta shares jumped 24.3% after the company reported strong Q4 earnings and exceeded guidance expectations. The identity management firm posted adjusted EPS of 78 cents, topping estimates of 73 cents, while revenue grew 13% to $682 million. CEO Todd McKinnon said the company is gaining momentum as bookings surpassed $1 billion in a single quarter for the first time ($OKTA).

• ⚖️ CFPB drops lawsuit against JPMorgan, Bank of America, and Wells Fargo: The Consumer Financial Protection Bureau dismissed its lawsuit against Early Warning Services, JPMorgan Chase, Bank of America, and Wells Fargo. The case accused the banks of failing to investigate fraud complaints on the Zelle payments network and denying reimbursement to victims. The dismissal with prejudice means the CFPB cannot pursue these claims again ($JPM, $BAC, $WFC).

• 🚘 Tesla suffers worst month since 2022 amid declining sales and tariffs: Tesla shares plunged 28% in February, marking their worst monthly performance since December 2022. The decline coincided with new tariffs on Canadian and Mexican imports, which could impact Tesla’s supply chain and production costs. Additionally, anti-Tesla sentiment in Europe and the U.S. has intensified, with reports of protests and falling sales in key markets ($TSLA).

• 📱 Best Buy stock tumbles 12% as new tariffs threaten margins: Best Buy shares sank 12% after President Trump’s tariffs on Canadian, Chinese, and Mexican imports took effect. CEO Corie Barry warned that over 75% of Best Buy’s products are sourced from China and Mexico, making price hikes “highly likely” in the coming months. While the retailer recently posted strong Q4 earnings, uncertainty over rising costs has weighed on investor sentiment ($BBY).

• 🎯 Target warns of weak Q1 after soft February sales: Target reported stronger-than-expected Q4 earnings but cautioned that demand slowed in February, impacting its Q1 outlook. Revenue declined 3% to $30.92 billion, and the retailer projected just 1% sales growth for FY2025, missing estimates of 2.6%. Shares dropped 2.5% in premarket trading ($TGT).

• 🔧 Honeywell acquires Sundyne for $2.2B to expand industrial automation: Honeywell announced it will acquire industrial pump and compressor maker Sundyne from Warburg Pincus for $2.2 billion in cash. The deal strengthens Honeywell’s industrial automation business as it restructures into three separate entities. Shares remained flat on the announcement ($HON).

• 🍔 Delta to serve Shake Shack burgers in first-class: Delta Air Lines is partnering with Shake Shack to introduce a premium burger option for first-class passengers on select long-haul flights. The initiative is part of Delta’s broader effort to enhance its in-flight dining experience. Shares of both companies saw slight gains ($DAL, $SHAK).

• 🚀 SpaceX postpones Starship’s 8th test flight due to technical issue: SpaceX delayed its eighth Starship test flight after identifying an issue with the second-stage spacecraft. The company will attempt the launch again within days. The delay adds another challenge to SpaceX’s push for commercial space travel ($TSLA).

REGULATION
Google Urges DOJ to Reverse Course on Breaking Up Company

The search giant is scrambling to stop the antitrust hammer from dropping.

Google is pulling out all the stops to convince the Justice Department that breaking up the company would be a national security disaster. The tech behemoth, which was found guilty of running an illegal search monopoly, is now pleading its case behind closed doors, warning that dismantling its empire could give China the upper hand in AI and cybersecurity.

Big Tech’s Last Stand

The DOJ’s proposed “remedies” include forcing Google to sell Chrome, blocking its billion-dollar exclusivity deals with Apple, and unwinding its AI investments—like its stake in Anthropic. Google, unsurprisingly, hates all of this. It’s painting itself as a critical pillar of America’s tech dominance, hoping Trump will step in and tone things down.

Trump’s DOJ might be more business-friendly, but it hasn’t blinked yet. Acting antitrust chief Omeed Assefi is expected to finalize the government's demands this week, and Google CEO Sundar Pichai has already been grilled by regulators, with execs from Microsoft, OpenAI, and Perplexity AI also in the hot seat.

April Showdown Incoming

With a key court hearing set for next month, Google is running out of time. The government already won the monopoly case—this next phase is all about punishment. If the DOJ goes nuclear, Google could face the biggest forced breakup since Microsoft’s early 2000s legal drama.

Is Google Too Big to Fail? If the current administration sides with Big Tech, Google might get away with a slap on the wrist—think fines and some business tweaks. But if regulators hold firm, Alphabet’s entire business model could get ripped apart, reshaping the internet as we know it.

ACQUISITION
Walgreens Nears Roughly $10 Billion Deal to Go Private

Walgreens Boots Alliance is about to disappear from the public markets, as private equity firm Sycamore Partners nears a deal to take the struggling drugstore chain private for around $10 billion. The reported $11.30-$11.40 per share price tag marks a modest premium but is a far cry from Walgreens’ $100 billion peak valuation in 2015.

So, what’s the plan? Sycamore isn’t just buying Walgreens—it’s splitting it up. The firm plans to divide the company into three separate businesses: U.S. retail pharmacy, Boots UK, and its U.S. healthcare segment, each with its own financial structure. That playbook has worked before—Sycamore used a similar strategy with Staples after its $6.9 billion buyout in 2017.

For Walgreens, it’s the latest chapter in a decade-long decline. The company bet big on retail pharmacy while rival CVS diversified into insurance and pharmacy benefits. Cost pressures, competition from Amazon, and a misfire in primary care with VillageMD sent the stock into freefall. Under CEO Tim Wentworth, Walgreens has been in cost-cutting mode—450 store closures, dividend suspension, and layoffs—but it wasn’t enough to stop the bleeding.

Sycamore has reportedly cleared any financing hurdles, and Walgreens Executive Chairman Stefano Pessina, who owns 17% of the company, is expected to keep a stake. If all goes as planned, Walgreens’ Wall Street run, which started in 1927, could officially end by the end of the week.

Calendar
On The Horizon

Tomorrow

Markets will shift focus from tariffs to economic data tomorrow, with the ISM services PMI providing insight into the services sector and the ADP employment report offering a snapshot of private job growth. Both reports could help shape expectations for the Fed’s next move.

On the earnings front, Victoria’s Secret ($VSCO), The Campbell’s Company ($CPB), Zscaler ($ZS), and Marvell Technology ($MRVL) are all set to report.

Before Market Open:

• Abercrombie & Fitch pulled off an impressive revival in 2023, only to spend 2024 dealing with the curse of high expectations. Even though sales and earnings improved, the stock wavered as investors waited for the next big thing. But analysts haven’t given up—most expect the retailer to keep expanding margins and growing sales, with price targets nearly 88% above current levels. If Abercrombie can keep the momentum going, it might just shake off last year’s slump. ($ANF)

• Foot Locker has been trying to reinvent itself since mid-2023 with its “Lace Up” strategy—a name that’s almost as ambitious as the plan itself. The goal? A fresh brand and a more focused store lineup. But nearly two years in, the results have been underwhelming. Sales missed expectations last quarter, guidance was slashed, and Nike ($NKE) is squeezing margins by forcing Foot Locker to discount its shoes. Investors will be hoping for a sign that the plan is working, but they might want to keep expectations in check.  ($FL)

NEWS
The Daily Rundown

• 🧀 Domino’s finally launches stuffed crust pizza in U.S.: After decades of resisting the trend, Domino’s has introduced stuffed crust pizza in the U.S. to better compete with rivals like Pizza Hut and Papa John’s. The company hopes the offering will attract younger customers, who already purchase nearly 13 million stuffed-crust pizzas from competitors each year. While many assumed Domino’s already had the item, executives now see it as key to boosting sluggish sales growth.

• 📉 DOGE quietly revises taxpayer savings claims: The government efficiency initiative DOGE erased or altered 40% of the taxpayer savings it claimed on its website, including five of its seven largest listed reductions. Initially reporting $16 billion in recovered funds, the total has now been revised to under $9 billion. The DOGE site now states that reported figures come directly from federal agencies, shifting responsibility for accuracy.

• 🩸 James Harrison, ‘Man with the Golden Arm,’ dies at 88: James Harrison, whose rare antibody-rich blood donations saved 2.4 million babies from Rhesus disease, passed away at 88. His commitment to donation began after a life-saving transfusion at 14, leading to 1,173 lifetime donations. His legacy has been honored by blood banks worldwide for his extraordinary contribution to medical science.

• ⚖️ SEC drops lawsuit against Kraken with no penalties: The Securities and Exchange Commission has agreed to dismiss its lawsuit against crypto exchange Kraken, marking a shift in regulatory posture under the Trump administration. Kraken announced the settlement, stating there were no penalties, no admission of wrongdoing, and no changes to its business. The decision follows similar moves to scale back cases against Binance, Coinbase, and Robinhood.

• 🇨🇦 Canadian shoppers boycott U.S. products amid trade tensions: A recent survey found that 66% of Canadians are reducing their purchases of U.S.-made products, while 55% have cut back on Amazon orders. The boycott comes in response to Trump’s tariff policies and anti-Canada rhetoric, fueling a push for domestic alternatives. With the Canadian dollar weakening, higher prices on American imports are further discouraging cross-border spending.

• 📱 Honor unveils deepfake detection in new smartphone: Chinese smartphone maker Honor has introduced the Magic 7 Pro, featuring built-in deepfake detection technology. The feature aims to combat growing concerns over AI-generated media by alerting users to potential manipulations. Honor showcased the device ahead of the Mobile World Congress, positioning it as a step toward more secure digital communication.

• 💉 RFK Jr. endorses measles vaccine amid Texas outbreak: Robert F. Kennedy Jr., known for his past vaccine skepticism, publicly endorsed the measles vaccine as cases surge in Texas. He emphasized the importance of immunization in protecting children and preventing the disease’s spread. The endorsement comes as Texas faces one of its worst outbreaks in years, prompting renewed public health efforts.

• 🇷🇺 Kremlin praises Trump’s foreign policy alignment: Russian government spokesperson Dmitry Peskov said the Trump administration’s policies “largely align with our vision.” The statement underscores perceived synergies between U.S. strategic decisions and Russia’s geopolitical interests. The comments come amid shifting global alliances and uncertainty over future U.S.-Russia relations.

RESOURCES
The Federal Reserve Resource

Join our small yet growing subreddit 🚀: https://www.reddit.com/r/investinq/

Wall Street Reads 💎 (Best Books):

• Stock Market Books📚
  https://drive.google.com/file/d/1NQ-vdLE1afXFcc5PwDRp1d5VSHzDly88/view?usp=sharing

• Options Trading Books📗 https://drive.google.com/file/d/1xeYL3IpjT623CJpO_Ole1Z-GuzHQQJzg/view?usp=sharing

• Business Books 📖https://drive.google.com/file/d/1VfuTqhPVB2YjDOd0N56UhF6kmZU-kLci/view?usp=sharing

Check out our latest issues 🎯: https://investinq.beehiiv.com