Markets retreat on fears Trump tariffs will lead to a global recession

Dow dropped 674, decliners over advancers a hefty 5-1 & NAZ sank 186.  The MLP index tumbled 8+ to the 314s & the REIT index fell 4+ to the 416s.  Junk bond funds were a little lower & Treasuries had limited buying which lowered yields.  Oil was off 1 to the 67s & gold rose 15 to 2916.

Dow Jones Industrials

Pres Trump imposed tariffs on Canada & Mexico and an additional levy on China on today, escalating tensions with key trading partners.  The US began imposing a 25% tariff on goods from Canada & Mexico today, & an additional 10% levy on Chinese imports as Trump looks to curtail drug trafficking & illegal immigration.  Earlier this year, the administration delayed these tariffs to allow Canada & Mexico time to negotiate trade deals aimed at addressing US border security & halting the flow of drugs like fentanyl.  Last week, Trump reaffirmed his decision to impose the levies, stating that "drugs are still pouring into our Country from Mexico and Canada at very high and unacceptable levels."  "We cannot allow this scourge to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled," Trump wrote, adding that "China will likewise be charged an additional 10% Tariff on that date."  He also teased other tariffs launching Apr 2, but did not offer details.  Shortly after his restoration to power, the White House said Trump is working "to hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country."  These levies are sending a message "that the flow of contraband drugs like fentanyl to the United States, through illicit distribution networks, has created a national emergency, including a public health crisis," the White House continued.

Tensions escalate with key trading partners as Trump's sweeping tariffs take effect

Treasury Secretary Scott Bessent projected confidence in Pres Trump's expansive plans to tariff foreign nations even as the stock market slumped in reaction to the first round of levies on Canada & Mexico.  “Over the medium term, which is what we’re focused on, it’s a focus on Main Street. Wall Street’s done great, Wall Street can continue to do fine, but we have a focus on small business and consumers,” Bessent said. “So we are going to rebalance the economy.”  Bessent argued that there would be a transition period as the tariffs kick in this month & next, but he argued that the market selloff was only temporary.  “With the China tariffs, I am highly confident that the Chinese manufacturers will eat the tariffs — prices won’t go up,” Bessent added.  “With Canada and Mexico, I think we’re in the middle of a transition, and as you mentioned, Honda moving to Indiana is a great start.”  So far, Trump has imposed 25% tariffs on all Mexican imports & most Canadian ones — except for energy products, which face a 10% rate.  He also has doubled his new charge on China to 20%, while 25% tariffs on steel & aluminum imports are due to take effect next week.  He's also pledging to implement reciprocal levels of tariffs on foreign nations, & to place additional levies on lumber, pharmaceuticals, semiconductor chips, copper & auto imports, beginning as soon as Apr 2.

Bessent shrugs off tariff sell-off, says Wall Street isn't the focus

Best Buy (BBY) posted fiscal 4th-qtr earnings & revenue that topped expectations, but CEO Corie Barry projected that prices for US consumers would rise as Pres Trump's tariffs on China & Mexico go into effect.  Barry said China & Mexico are the company's top 2 supply chain sources, with about 55% & 20% of its products sourced from those countries, respectively.  “Trade is critically important to our business and industry. The consumer electronic supply chain is highly global, technical and complex,” Barry added.  “We expect our vendors across our entire assortment will pass along some level of tariff costs to retailers, making price increases for American consumers highly likely.”  Barry added that the company directly imports only 2-3% of its products & that it's reviewing & adjusting its supply chain sourcing. The company typically carries 6 weeks of supply at a time & that she expects pricing changes to affect the 2nd thru 4th qtrs of the fiscal year.  “The giant wild card here, obviously, is how the consumers are going to react to the price increases, in light of a lot of price increases potentially throughout the year and a general consumer confidence that is showing a little signs of weakness at the moment,” CFO Matt Bilunas said.  4th-qtr EPS was 54¢, compared with $2.12 during the year-ago period.  Adjusting for a noncash goodwill impairment charge related to Best Buy Health & 4th-qtr EPS was $2.58.  Comparable sales, revenue from online sales & stores open at least 14 months, rose 0.5% year over year for the qtr, excluding the additional week in fiscal 2024.  BBY had forecast a change ranging from flat to down 3%.  In the US, quarterly comparable sales rose 0.2% year over year.  Full-year fiscal 2025 revenue came in at $41.5B, down 4.4% from $43.4B in fiscal 2024.  Fiscal 2025 had 1 fewer week than the prior-year period, which the retailer estimates added $735M in revenue to its fiscal 2024 total.  For fiscal 2026, the company issued full-year guidance of $41.4 - $42.2B in revenue - comparable sales growth of 0% - 2% year over year.  “We believe consumer behavior will be largely similar to last year – remaining resilient but still dealing with high inflation that is driving expenses up across their lives, making them value focused and thoughtful about big ticket purchases. And, at the same time, we continue to see a consumer that is willing to spend on high price point products when they need to or when there is technology innovation,” Bilunas said.  BBY said the guidance does not account for the impact of recent or proposed tariffs.  The stock fell 12.93 (15%).

Best Buy shares plunge as CEO warns price increases are ‘highly likely’ due to Trump tariffs

Markets eliminated all of their post-election gains as stocks deepened their sell-off with fresh tariffs on Canada, Mexico & China now officially in effect.  Notably, NAZ is set to close down at least 10% from its record closing high on Dec 16, which would mark correction territory for the tech-heavy index.  Rising fears of a full-on trade war drove yesterday's sell-off after the pres said there was "no room left" for Canada or Mexico to strike a deal to mitigate promised tariffs.  Stocks are retreating as markets assess the likely impact of Trump's broad tariffs on America's top trading partners.  The measures, fresh 25% tariffs on Canada & Mexico, & a doubling in China duties to 20%, were signed into effect today.