Rollercoaster Markets: Tariffs turmoil hits Wall Street 10/02/2025

HOT stories for today

US market wrap:
 

• Stocks tumbled on Friday as a mix of tariff concerns and inflation fears unsettled investors, closing out a turbulent week. Markets took a sharp downturn after President Donald Trump announced plans for reciprocal tariffs on trade partners, suggesting a move to raise duty levels across the board to match those imposed on U.S. goods. The Dow Jones Industrial Average dropped 444.23 points, or 0.99%, to finish at 44,303.40. The S&P 500 slid 0.95% to 6,025.99, while the Nasdaq Composite sank 1.36% to 19,523.40. With these losses, all three major indexes ended the week in negative territory.
• Even before Trump's comments, markets were on edge following fresh economic data that signaled rising inflationary pressures. A preliminary reading from the University of Michigan showed consumer sentiment dipped to 67.8 in February. Meanwhile, the January jobs report revealed the unemployment rate declined to 4% from 4.1%. Among individual stocks, Amazon slid 4% after issuing lackluster guidance, projecting first-quarter revenue growth between 5% and 9%—its slowest pace on record.

Rollercoaster Markets: Tariffs turmoil hits Wall Street 

• U.S. stock futures bounced back Sunday after President Donald Trump announced a 25% tariff on all steel and aluminum imports starting Monday. He also plans to unveil reciprocal tariffs on Tuesday or Wednesday, potentially targeting China, Japan, the EU, and Taiwan for their existing duties on U.S. goods. “If they are charging us 130% and we’re charging them nothing, it’s not going to stay that way,” Trump told reporters aboard Air Force One.
• He also suggested that Elon Musk’s team uncovered irregularities at the U.S. Treasury, hinting that some debt obligations may be fraudulent. “Maybe we have less debt than we thought,” he said, without elaborating. Trump did not specify when the new tariffs would take effect. He has already imposed a 10% tariff on Chinese goods and delayed a 25% tariff on Canadian and Mexican imports for a month. Critics warn tariffs could drive up prices for American consumers, while supporters argue they will reduce reliance on foreign imports and boost domestic industry.

 
Stocks on the move:       

• Expedia (EXPE): The online travel company’s stock soared nearly 15% after delivering stronger-than-expected fourth-quarter results. Expedia reported adjusted earnings of $2.39 per share on revenue of $3.18 billion, surpassing analysts' forecasts of $2.04 per share on $3.07 billion in revenue, according to LSEG.
• Doximity (DOCS): Shares skyrocketed 37% after the digital healthcare platform posted better-than-anticipated fiscal third-quarter revenue. The company also projected fiscal fourth-quarter revenue between $132.5 million and $133.5 million, well above analysts' expectations of $123.8 million.
• Frontier Airlines (ULCC): Shares jumped 17%, reaching their highest level since July 2023 in late-morning trading, following an optimistic outlook and a return to profitability for the final quarter of 2024.
• Deckers Outdoor (DECK): Citi analyst Paul Lejuez upgraded the footwear company’s stock to a "buy" rating from "neutral" in a Friday note to clients. Deckers' shares have climbed 24% over the past year.

 
Today’s action

• Asia-Pacific markets mostly gained Monday, rebounding from an early dip as trade tensions kept investors cautious. U.S. President Donald Trump said Sunday he plans to impose a broad 25% tariff on all steel and aluminum imports, adding fresh uncertainty to global markets, according to Reuters. Japan’s Nikkei 225 edged up 0.22%, while the Topix index remained flat in volatile trading. Loan growth slowed slightly to 3% year over year in January from 3.1% in December. Hong Kong’s Hang Seng jumped 1.73%, and China’s CSI 300 reversed early losses to gain 0.14%. China’s consumer inflation hit a five-month high in January, driven by increased spending ahead of the Lunar New Year. European markets were set to open higher, while U.S. stock futures edged up ahead of a busy week of economic data and corporate earnings.
• Dow Jones futures rose 63 points (0.14%), S&P 500 futures gained 0.32%, and Nasdaq 100 futures climbed 0.54%. Investors remain wary of inflation and the potential economic fallout from Trump’s tariff plans. Key data releases this week: January consumer price index (Wednesday, 8:30 a.m.). January producer price index (Thursday, 8:30 a.m.). Initial jobless claims for the week ending Feb. 8 (Thursday, 8:30 a.m.)

Wahtclist: AMZN, EXPE, GOOGL, JPM, MCD, ON, INCY, X

Bitcoin

• Bitcoin network activity has dropped to its lowest level in a year, with a significant decline in transaction volume. However, growing demand from long-term holders could provide price support. The slowdown appears linked to reduced usage of the Runes Protocol, a relatively new system for issuing fungible tokens directly on Bitcoin’s network, which may have contributed to the sharp drop in transactions.
• As of Friday, the total daily number of Bitcoin transactions stood at 346,000, marking a 53% decline from its peak of 734,000. Despite this, interest from long-term accumulator addresses has been rising, suggesting underlying strength. At the same time, bitcoin is struggling to break past the $100,000 mark, currently trading at $97,000. Valuation models indicate it may be overvalued, with the red and blue Metcalfe valuation bands estimating its fair value between $48,000 and $95,000.
  Watchlist: Bitcoin: 89 000-108 000, Ethereum: 2200-3000, Solana: 180-276

Forex

• EUR/USD remains under pressure near 1.0310 in Monday’s Asian session. Persistent trade war concerns and uncertainty bolster demand for the US dollar, weighing on the euro. The European Central Bank’s dovish stance and signals of multiple interest rate cuts further drag down the shared currency. Traders will keep an eye on the Eurozone Sentix Investor Confidence data for February and ECB President Christine Lagarde’s speech later in the day for further direction.
• Japanese yen struggles amid trade tariff worries. The Japanese yen remains weak against the US dollar amid renewed concerns that Japan could be a target of President Donald Trump’s trade tariffs. A modest uptick in the US dollar supports USD/JPY, keeping the pair near 152.00 during Monday’s Asian session. However, expectations that the Bank of Japan may raise interest rates again this year limit deeper losses for the yen, contributing to an uptick in Japanese government bond yields.
  Watchlist: EUR/USD: 1.0200-1.0550, USD/JPY: 153.6-158.80

Basic Materials

• Gold prices climb to $2,880 during Monday’s Asian session, supported by concerns over President Donald Trump’s plan to impose a 25% tariff on all steel and aluminum imports. Fears of a global trade war and inflation expectations boost gold’s appeal as a hedge. However, a stronger US dollar and steady Fed interest rate expectations—amid solid US jobs data and inflation concerns—could limit further gains.
• WTI crude rises for the second straight day, recovering from last week’s low of $70.25 to trade around $71.25, up 0.60%. Concerns over potential disruptions to Iran’s oil supply support the rebound. Still, worries that Trump’s tariffs could slow global growth and weaken fuel demand are capping gains, while a firmer US dollar adds pressure on crude prices.
  Watchlist: GOLD 2600-2822, US Oil: 70.00-79.00

Key Economic Events Today:

EST time
09:00 am: EUR ECB President Lagarde Speaks
Tentative: USD Cleveland Fed Inflation Expectations

Earnings

BMO (Before the US Market opens)
MCD          McDonald’s Corp.
ROK          Rockwell Automation Inc
ON            ON Semiconductor Corp.
INCY         Incyte Corp.

AMC (After the US Market closes): VRTX, ACGL, BAP

The TEFS Analyst team wishes you a successful day!