!!️ Jerome Powell's Warning

+ China Retaliates With 34% Tariff on U.S. Goods

Author

investinq
April 04, 2025

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Good afternoon! Ryan Reynolds is back in the alcohol game, trading his $610 million Aviation Gin success for a new boxed wine brand called Ugly Estates. Launched in partnership with Gallo, the wine comes in one-liter cartons and features Peggy—the quirky, hairless dog from Deadpool & Wolverine—as its official mascot. The goal? Make wine feel more approachable and less intimidating for everyday drinkers.

Boxed wine is on the rise, especially among younger consumers looking for something easy to bring to picnics or parties. With playful ads and a $12 price tag, Ugly Estates skips the fancy packaging in favor of simplicity and humor. For Reynolds, it’s another bet that personality sells—and so far, it’s worked.

MARKETS

*Stock data as of market close*

  • Wall Street got steamrolled Friday as trade war alarms blared and recession fears took center stage. The Dow tumbled more than 2,200 points, logging just its fourth 2,000+ point drop in history, while the Nasdaq slipped into bear market territory. Powell didn’t help either—warning that tariffs could drive up inflation and drag down growth.

  • The S&P 500 sank nearly 6% to end its worst week since 2020, and the Nasdaq slid 5.8% in its steepest drop of the year. Just 14 S&P stocks managed to finish in the green, while nearly 30 plunged double digits. In just two trading sessions, U.S. stocks have shed $6.6 trillion in value.

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STOCKS
Winners & Losers

What’s up 📈

  • GameStop rose 11.33% after CEO Ryan Cohen bought 500,000 shares, signaling confidence in the company. ($GME)

  • Rocket Companies jumped 11.19% as falling mortgage rates revived interest in home loans. ($RKT)

  • The Gap gained 7.23% on optimism that Vietnam may negotiate tariff relief. ($GPS)

  • ON Holding climbed 5.21% in the wake of possible trade talks and cooling rate fears. ($ONON)

  • DR Horton added 4.55%, NVR rose 4.23%, and Lennar climbed 2.43% as homebuilders rallied on easing mortgage rates. ($DHI, $NVR, $LEN)

  • Nike ticked up 3% after reports of Vietnam potentially negotiating a reduction in tariffs. ($NKE)

What’s down 📉

  • Energy stocks plunged after crude prices crumbled and the sector ended the week as the S&P 500’s biggest loser. BP fell 9.44%, Chevron dropped 8.22%, and Exxon Mobil lost 7.20%. ($BP, $CVX, $XOM)

  • Semiconductor stocks were hit broadly after a tariff-driven tech selloff. Intel fell 11.50% despite earlier JV news with TSMC. TSMC dropped 6.72%, AMD sank 8.57%, Qualcomm lost 8.58%, and Broadcom declined 5.01%. ($INTC, $TSM, $AMD, $QCOM, $AVGO)

  • The Magnificent 7 continued their slide, shedding trillions in market cap. Apple lost 7.29%, Meta Platforms fell 5.06%, Alphabet tumbled 3.40%, Microsoft sank 3.56%, Tesla shed 10.42%, Amazon dropped 4.15%, and Nvidia fell 7.36%. ($AAPL, $META, $GOOGL, $MSFT, $TSLA, $AMZN, $NVDA)

  • China-regulated stocks dropped on fears of escalating investigations. DuPont sank 12.75% and GE HealthCare Technologies lost 15.96%. ($DD, $GEHC)

  • Bank and fintech stocks sold off amid fears of a U.S. economic pullback and drying consumer loans. JPMorgan, Morgan Stanley, and Wells Fargo each fell more than 7%, while Goldman Sachs and Citigroup lost 7.8% and 7.9%, respectively. Affirm slid 8.12% and PayPal dropped 5.41%. ($JPM, $MS, $WFC, $GS, $C, $AFRM, $PYPL)

  • Casino operators exposed to China also declined. Las Vegas Sands slipped 8.4%, Wynn Resorts and MGM Resortseach dropped more than 3.5%. ($LVS, $WYNN, $MGM)

FEDERAL RESERVE
Powell Warns of Higher Prices, Weaker Growth After Tariff Plan

Jerome Powell isn’t touching that rate-cut button just yet. Speaking Friday at a business journalism conference, the Fed Chair signaled the central bank is staying put—despite tariffs, market chaos, and pressure from President Trump’s Truth Social posts. Powell acknowledged the inflationary impact of Trump’s sweeping new tariffs is “significantly larger than expected,” but said the Fed needs more clarity before making any moves.

Caught Between Tariffs and Tweets

Powell’s job isn’t getting easier. March’s jobs report crushed expectations with 228,000 new roles, signaling a strong labor market—even as inflation remains stubbornly above target. Normally, that’d make for a Goldilocks scenario. But with Trump’s 10% blanket tariff and 34% China hike threatening both growth and prices, Powell’s balancing act has turned into a tightrope walk during an earthquake. And no, he’s not cutting rates just because Trump tweeted in all caps.

Tariff Shock Therapy: Markets aren’t loving the uncertainty. The S&P is down 11% year-to-date, and the yield on the 10-year has dropped below 4% as traders brace for recession risks. Powell didn’t sugarcoat the fallout: The tariffs could lead to slower growth, higher inflation, and a Fed stuck between a rock and an angry MAGA rally. For now, officials are betting this price shock won’t spark a longer inflation spiral—but if it does, they’ll act.

What’s Next?The Fed’s next meeting is May 6–7, but don’t expect fireworks. Powell’s message was clear: inflation expectations matter more than knee-jerk reactions. If inflation sticks while unemployment climbs later this year, then—maybe—rate cuts are on the table. But until then, the Fed’s keeping its powder dry. As Powell put it, “We’re well positioned to wait.” Wall Street, for now, will just have to do the same.

NEWS
Market Movements

TRADE
China Retaliates With 34% Tariff on U.S. Goods

Just 48 hours after Trump unveiled his tariff poster board of doom, Beijing fired back with a chart of its own. China is slapping a 34% tariff on all U.S. goods starting April 10, matching Trump’s fresh levies on Chinese exports. But they didn’t stop there: Beijing is also cutting off exports of rare earths (essential for tech and defense), launching investigations into American-made X-ray equipment, and banning imports from several U.S. poultry and defense firms.

No chill this time

In a sharp pivot from the wait-and-see strategy of the last trade war, China acted before Trump’s tariffs even took effect. Analysts say the move was calibrated: tough enough to sting, but not wild enough to derail everything. Trump, of course, took to social media to say China “PANICKED” and made the “wrong” move. Meanwhile, markets weren’t exactly calm—the Dow futures dropped 900 points and Alibaba shares tumbled nearly 10%.

Fallout spreading fast: Global markets went into risk-off mode. European bank stocks nosedived more than 9%, U.S. stocks slid deeper into correction territory, and commodities like soybeans and oil took hits too. UBS lowered its S&P 500 target by 600 points and warned the U.S. might be steering into a recession unless Trump blinks soon. China, for its part, filed a formal complaint with the WTO and hinted that more retaliation could come if things escalate further.

Rare earths, rare chill

Beijing’s rare earths move might be the biggest wildcard. These minerals power everything from iPhones to electric vehicles to military tech—and China dominates their global supply. Cutting off access to elements like samarium, gadolinium, and terbium could trigger headaches for U.S. manufacturers. Bottom line: the gloves are off, and unless both sides reach for a deal soon, the economic damage might get a lot worse before it gets better.

Calendar
On The Horizon

Next Week

Anyone hoping for a quiet week ahead might want to cancel those plans to relax.

The front half of the week barely stirs—just a credit update Monday and small business sentiment Tuesday. But Thursday flips the switch with March’s CPI report, the last clean inflation read before tariffs start muddying the waters. And with markets already jittery after a hotter-than-expected PCE, this CPI could hit different. Friday adds to the tension with PPI data and a first glimpse at April consumer sentiment.

Earnings season also stretches its legs. It’s still early, but by Friday, Wall Street’s biggest banks will step up to the mic and kick off the reporting season in earnest.

Earnings:

  • Monday: Levi Strauss ($LEVI)

  • Tuesday: Walgreens Boots Alliance ($WBA), WD-40 ($WDFC), and Cal-Maine Foods ($CALM)

  • Wednesday: Delta Air Lines ($DAL) and Constellation Brands ($STZ)

  • Thursday: CarMax ($KMX)

  • Friday: JPMorgan Chase ($JPM), Morgan Stanley ($MS), Wells Fargo ($WFC), and BlackRock ($BLK)

NEWS
The Daily Rundown

  • 🐧 Tariffs Even Hit Penguin-Populated Islands: Trump's sweeping trade measures included uninhabited regions like the Heard and McDonald Islands, Svalbard, and the British Indian Ocean Territory. The remote areas, home mostly to wildlife and military personnel, are subject to 10% tariffs. The move highlights the extreme breadth of the new policy.

  • 🌍 World Leaders Slam Trump’s Tariffs, Pledge Retaliation: Canada hit back with 25% auto tariffs, while China accused the U.S. of “unilateral bullying.” France and Germany called the move catastrophic and urged companies to freeze U.S. investments. The EU promised a united front, and Japan labeled the decision “extremely regrettable.”

  • 🧼 Essential Goods Stocks Hold Up Amid Market Chaos: With Canada and Mexico exempted from the new tariffs, sectors like household goods, groceries, and beverages stayed afloat. Utilities and personal care companies—those seen as “recession-proof”—also avoided steep losses. Auto stocks fared better than expected, despite facing a separate 25% levy.

  • 🚙 Stellantis Idles Plants and Lays Off 900 Workers After Auto Tariffs: The automaker is temporarily halting production at Canadian and Mexican plants and furloughing U.S. workers tied to those operations. Models like the Chrysler Pacifica and Jeep Compass are affected. Stellantis says it's still evaluating how the tariffs will impact long-term operations.

  • 🎮 ‘Minecraft Movie’ Aims for $140M Opening Weekend: Warner Bros. is betting big on its video game adaptation, starring Jack Black and Jason Momoa. Despite mixed reviews, advance ticket sales have been strong, and the brand’s massive fanbase could deliver a box-office win. The film follows the success of Sonic and Super Mario. ($WBD)

  • 🏆 U.S. and U.K. to Host Women’s World Cups in 2031 and 2035: FIFA awarded hosting rights for the 2031 Women’s World Cup to the U.S., while the U.K. will host in 2035. It marks the U.S.’s third time as host and reflects rising global investment in women’s soccer.

  • 🔄 Trump Fires Six NSC Officials After Meeting with Laura Loomer: A shake-up in the National Security Council followed Trump’s meeting with the far-right activist. Loomer reportedly questioned officials’ loyalty, leading to their dismissal. The incident has raised eyebrows among political insiders and national security analysts.

  • 🎵 Bruce Springsteen to Release 'Tracks II' With 83 Unheard Songs: The Boss will drop Tracks II: The Lost Albumson June 27, featuring previously unreleased material from 1983 to 2018. The 7-album box set includes 83 tracks, many of which were cut from earlier records. Fans are calling it one of his most anticipated releases yet.

RESOURCES
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