How will tariffs hit your wallet? 04/02/2025

                                           Hot stories for today


How tariffs will hit your wallet?

• President Donald Trump’s planned tariffs on Mexico, Canada, and China could disrupt markets and drive up food prices. These countries account for nearly half of U.S. farm exports, with the U.S. heavily reliant on its neighbors for fresh produce. Retaliatory measures could curb exports, raise fertilizer costs, and push grocery prices higher. Mexico and Canada supply nearly 90% of U.S. vegetable imports and over half of fruit shipments. Mexico is also the top buyer of U.S. corn and pork, impacting companies like Tyson Foods and Smithfield. Meanwhile, soybeans risk another hit if China retaliates.
• Fertilizer costs may rise as Canada supplies 85% of U.S. potash. Lawmakers are pushing for an exemption to avoid higher costs ahead of spring planting. The housing market could also be affected, with Canada supplying 70% of U.S. softwood lumber. New tariffs, on top of existing duties, could further inflate homebuilding costs.

 
Stocks on the move:       

• Palantir Technologies (PLTR) surged 21% after the defense technology firm outperformed fourth-quarter estimates and provided an optimistic full-year outlook. The company reported adjusted earnings of 14 cents per share, surpassing analyst expectations of 11 cents per share, according to LSEG.
• Healthpeak Properties (PEAK) gained about 2% after delivering strong quarterly results and raising its dividend by 1.7%.
• Woodward (WWD) slipped 2.9% following underwhelming fiscal first-quarter revenue. The company reported $773 million in revenue, slightly missing FactSet’s forecast of $775.4 million.
• NXP Semiconductors (NXPI) climbed nearly 2% after reporting fourth-quarter adjusted earnings of $3.18 per share on revenue of $3.11 billion, both marginally exceeding analyst estimates of $3.14 per share and $3.10 billion, per LSEG.

 
Today’s action

• Asia-Pacific markets climbed on Tuesday after Donald Trump delayed tariffs on Mexico for a month, with Canada also confirming that proposed U.S. levies on its exports were put on hold. Japan’s Nikkei 225 rose 1.64%, while the broader Topix index gained 1.27%. Stock futures advanced Monday night following Trump’s tariff pause. Dow Jones Industrial Average futures were up 154 points, or 0.3%, while S&P 500 futures added 0.5%. Nasdaq 100 futures climbed 0.7%, boosted by a rally in Palantir.
• On the economic calendar, the Job Openings and Labor Turnover Survey for December and durable goods orders are set for release Tuesday. Meanwhile, investors are gearing up for a major earnings week, with Alphabet, Merck, and PepsiCo scheduled to report.

Wahtclist: PLTR, GOOGL, PEP, MRK, PFE, KKR, UBS, SPOT, PYPL

Bitcoin

• Bitcoin rebounded above $100,000 by Monday evening after President Donald Trump announced a temporary pause on tariffs for Mexico and Canada. The largest cryptocurrency by market capitalization had experienced a sharp weekend decline, hitting a low of $91,229 early Monday—its weakest level since January 13, according to Dow Jones Market Data. The initial tariff announcement on Saturday, which targeted imports from Canada, Mexico, and China, had driven the U.S. dollar higher while causing cryptocurrencies and Asian equities to tumble. Ether also dropped to $2,814, its lowest since August 5, 2024, before recovering to $2,881.
• Cryptocurrencies often lead the selloff in risk assets during macroeconomic uncertainty, especially over weekends, said Matt Mena, crypto research strategist at 21Shares. While many Bitcoin advocates view it as a store of value, it has largely traded in line with risk assets, particularly tech stocks.
  Watchlist: Bitcoin: 89 000-108 000, Ethereum: 2200-3000, Solana: 180-276

Forex

• The Japanese yen weakened as safe-haven demand faded, with the USD/JPY pair staying above the 155.00 level during Tuesday’s Asian session. Trump’s decision to postpone tariffs on Canada and Mexico contributed to yen selling, while concerns that Japan could eventually face similar trade measures added further pressure. However, expectations of policy divergence between the Bank of Japan and the Federal Reserve may help limit losses for the yen.
• Meanwhile, EUR/USD declined as markets reacted to sweeping U.S. tariff threats. The initial sell-off eased after Trump granted a 30-day extension on tariffs for Mexico and Canada, helping markets stabilize. However, the euro remains under pressure amid concerns that the European Union could be next in line for U.S. trade measures, though Trump has yet to provide concrete details.
  Watchlist: EUR/USD: 1.0200-1.0550, USD/JPY: 153.6-158.80

Basic Materials

• West Texas Intermediate (WTI) crude oil extended its decline for the second straight day on Tuesday, hovering near a one-month low around $72.00 per barrel. Trump’s decision to delay tariffs on Mexico and Canada eased concerns over supply disruptions, putting pressure on prices. However, support remains from OPEC+’s commitment to a gradual phase-out of production cuts.
• Gold maintained gains, rising 0.87%, as markets weighed the impact of U.S. tariffs on global trade. The U.S. Dollar Index initially surged to a two-week high before retreating as the tariff delay dampened momentum. Investors are now focused on upcoming U.S. Nonfarm Payrolls data and Federal Reserve communications for further market direction. Gold had reached a record high on Monday following the initial tariff announcement, attracting safe-haven demand. As of now, XAU/USD is trading at $2,821.
  Watchlist: GOLD 2600-2822, US Oil: 70.00-79.00

Key Economic Events Today:

EST time:
10:00 am: USD ISM JOLTS Job Openings
10:00 am: USD ISM Factory Orders
08:45 pm: CNY Caixin Services PMI

Earnings

BMO (Before the US Market opens)
MRK      Merck & Company Inc.
PEP       Pepsico Inc. 
PFE       Pfizer Inc.
KKR       KKR & Co Inc
UBS       UBS AG
SPOT     Spotify 
PYPL     PayPal Holdings

AMC (After the US Market closes): GOOGL, AMD, AMGN, CMG, MDLZ

The TEFS Analyst team wishes you a successful day!