Tuesday, March 4, 2025

Pre-market futures continue to attempt to price-in the overall effect of new tariffs being levied today by the U.S. federal government. Our biggest trading partners — Canada, Mexico and China — now see tariffs on imported goods from these countries by +25%, +25% and +20%, respectively. We have no major economic prints out ahead of today’s opening bell, so the tariffs are our main focus.

The Dow has shed an additional -135 points at this hour, or -0.31%. The S&P 500 is down -43 points, -0.74%. The Nasdaq is -178 points currently, -0.87%. The small-cap Russell 2000 has sunk -26 points, -1.25%. Year to date, the Dow is still in positive territory: +0.55%, but the S&P 500 is -2%, the Nasdaq -4.5% and the Russell 2000 -7.6%.

Going back to Election Day 2024, where these indexes rode all the way up to all-time closing highs, we’re now seeing much less impressive results: the Dow is +1.9% and the S&P 500 +0.07%, but the Nasdaq is now -0.32% and the Russell 2000, rather crushingly, is down -9.3% from the day President Trump was voted into the office.

Of course, not all of this is due to tariffs. The revelation of DeepSeek AI from China for pennies on the dollar has caused a continued unwinding of the AI trade among top American companies. NVIDIA NVDA, for instance, is down -3% in today’s pre-market and -15% year to date. Back on Election Day, NVIDIA was trading at $145 per share; today it trades at $109.

Retaliatory measures from Canada and China — and presumably Mexico, although President Claudia Sheinbaum has yet to make a formal announcement on this matter — will be forthcoming, complicating the tariff situation. During President Trump’s first term, a trade war began in January 2018. By the end of the year, all four major indexes finished lower — not by as much as the down year 2022, but still negative. Thus, concerns among market participants and widespread and apparently warranted.

Target Beats on Top & Bottom Lines in Q4

Big-box retailer Target TGT posted outperformance on both top and bottom lines in its Q4 report ahead of today’s open. Earnings of $2.41 per share outstrode the $2.25 in the Zacks consensus, though still below the $2.58 per share reported in the year-ago quarter. This is only the second earnings beat for Target in the past four quarters. Revenues of $30.92 billion amounted to a +0.48% beat compared to estimates.

That said, Target also made a point to mention that tariffs are going to lead to higher prices at Target, perhaps as soon as the next couple days. Same-store sales guidance is expected to remain in-line with earlier estimates. Shares are down -3% ahead of the open on this weak start to the trading day, and TGT shares are down -10.7% year to date. For more on TGT’s earnings, click here.

Check out the updated Zacks Earnings Calendar here.

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