Nasdaq Composite Futures Sink After China Retaliates: Apple (Nasdaq: AAPL) Down Again
Key Points
- Markets are down on Wednesday morning. The drop is being caused by China issuing retaliatory tariffs and the yield on Treasuries skyrocketing.
- Nvidia made early investors rich, but there is a new class of ‘Next Nvidia Stocks’ that could be even better; learn more here.
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Bessent Speaks to Press
Scott Bessent just spoke to the press and made a few notable comments:
- He said Trump ‘goaded’ China into making poor decisions and they will now face even worse tariffs while the rest of the world has a 90-day pause.
- It’s notable that neither Lutnick nor Navarro spoke to the press since they’ve been seen as trade hawks in favor of larger tariffs.
- Bessent also claimed Trump’s plan was always to let tariffs go into effect before taking a next action. That’s likely more spin than reality.
Breaking: 90 Day Pause on Tariffs Just Announced
Trump is pausing tariffs for 90 days for almost every country excluding China, which will receive additional tariffs. The Nasdaq is up nearly 9% in response.
Volatile Morning Trading
The opening bell just rang and stocks are generally down. The S&P 500 is down .53% and the Dow Jones is down .95%.
The Nasdaq Composite is up .13%. Technology stocks continue to lead the market.
European Indexes Down
It’s pain in European indexes as well today. The FTSE is down 3.53%, CAC down 4.14%, and Germany’s DAX is down 4.13%.
Walmart Pulls Guidance
One expectation for this earnings season is that you’ll see many companies pull guidance amidst tariff uncertainty. Walmart pulled their operating earnings guidance at an investor event in Dallas.
In premarket trading, Walmart’s stock is down about 1%. Overall, earnings expectations for stocks across the S&P 500 have been slipping. Headed into the year, the expectation was stocks would see a year of strong earnings growth in 2025.
As of right now, the big question is whether earnings will fall from their 2024 levels.
After the S&P 500 sank into the close yesterday to post one of the worst four-day stretches on record, futures today are a sea of red. As of 8:05 a.m. ET, here’s how major indexes look:
- Dow Jones: -1.90%
- S&P Futures: -1.86%
- Nasdaq: -1.56%
What’s causing another day of pain in markets? Let’s dive into the major storylines below.
China Retaliates Against U.S. Tariffs
After U.S. tariffs of 104% went into effect against China at midnight last night, the Chinese government responded by raising its rate on U.S. imports from 34% to 84%. The U.S. exports $143.5 billion worth of goods to China, whereas it imports $438.9 billion in goods.
That’s an overall small piece of America’s $28 trillion economy. However, China retaliating continues stoking fears that we’ll see a protracted trade war that could destabilize the global economy and leave the United States in a recession.
10-Year Treasuries Surging
Another bad piece of economic news this morning is that the yield on 10-Year Treasuries is surging. One of the common thoughts on Wall Street has been that the Trump Administration is prioritizing the yields of Treasuries over the stock market. Lower treasury rates would help close the deficit by lowering interest costs and would also provide relief to parts of the economy that have been battered by higher rates – like housing.
However, after rates initially plummeted following the announcement of Trump’s tariffs last Wednesday, they’re now surging. Across the past day the yield on the 10-Year Treasury has jumped an incredible .20%, and now stands at 4.46%.
Overall, 10-Year Treasury rates have now jumped more than 50 basis points from where they traded on Monday morning. While the market has been selling off mostly on the potential for tariffs to cause a recession, rising rates are a new threat to the valuation of stocks.
Stocks to Watch on Wednesday Morning
With indexes down, there will be pain across most sectors today. Apple (Nasdaq: AAPL) is down another 2% premarket after dropping 22% in the past five days. Nike (NYSE: NKE) is another stock that’s been hit hard by tariffs and is down 2% premarket.
Some stocks that have been battered recently are holding up better than indexes. For example, NVIDIA (Nasdaq: NVDA) is actually up slightly in premarket trading even though indexes are sharply down.
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