President Donald Trump could only watch as the Kansas City Chiefs' dreams of winning a third consecutive Super Bowl were emphatically crushed. But when it comes to markets he's likely to have more influence over the S&P 500's own three-peat hopes, which are hanging in the balance.

The index has jumped 20% annually in the last two years, but a third 20% rise looks uncertain to say the least.

If Trump's tariffs plan is just one big, global game of chicken then it's getting riskier by the day.

The stock market appears remarkably calm, though. After proposed levies on Mexico and Canada were averted at the last minute, traders seem convinced tariffs are a negotiating tactic.

But there's more--Trump said Sunday he wants to impose "reciprocal" trade taxes on all countries that have tariffs on the U.S., as well as 25% tariffs on steel and aluminum. It's harder to see how 11th-hour deals could scupper those.

His tariffs on China are very much real and Beijing's countermeasures are set to be imposed Monday.

The risk is that more of Trump's tariff threats become reality and fuel inflation in the process.

It's a big week for inflation data and all things macro. Economists expect consumer prices to rise 2.9% year-over-year when January's CPI data are published Wednesday. The producer price index is expected to rise 3.2% Thursday. That's higher than the Federal Reserve would like, even before the impact of any levies. Traders are already pricing in a lengthy pause in rate cuts.

Fed Chair Jerome Powell has consistently said the central bank will wait and see which policies Trump will enact and how they will impact the economy.

At some point, though, Powell will have to make a judgment and share it with markets. If he does that in his testimony before the Senate Banking Committee Tuesday, then the stock market's recent resilience may face its toughest test yet.

-- Callum Keown

*** Join Barron's senior managing editor Lauren R. Rublin and deputy editor Ben Levisohn today at noon when they discuss the latest market moves, earnings reports, and stocks in the news. Plus, we'll host an extended Q&A with listeners. What's on your mind? Let us know when you register for this call. Sign up here.

Retirement might come with a gold watch or its digital successor, but it doesn't come with a crystal ball. All the more reason to prepare financially for a world of possibilities -- good, bad, and inevitably expensive in the case of medical care. Join us on Feb. 11 at noon for conversations with experts on how to secure a nest egg in a pricey market, and how to estimate retirement healthcare costs. Sign up here.

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January Consumer Price Index, Retail Sales Coming This Week

Economists will be closely watching the January consumer price index report on Wednesday and the update on January U.S. retail sales coming out Friday. Consumers may be especially focused on what the government says about soaring egg prices.

   -- The Bureau of Labor Statistics is expected to say CPI increased 2.9% in 
      January from a year before, holding steady with December's annual pace. 
      Core CPI minus food and energy costs are expected to increase by 3.2% 
      from a year earlier, also matching December's rate. 
 
   -- The Census Bureau is expected to report that retail sales were flat in 
      January compared with a gain of 0.4% in December, the height of the 
      holiday shopping season. Retail sales excluding autos are expected to 
      increase by 0.3%, down from December's 0.4%. 
 
   -- Some investors who can't find eggs on their supermarket shelves are 
      investing in them instead. Cal-Maine Foods, the largest U.S. producer and 
      distributor of eggs, including Eggland's Best and Land O'Lakes brands, 
      has seen shares soar 95% over the past 12 months because of the bird flu 
      outbreak. 
 
   -- On Feb. 1, as retail egg prices were soaring, thieves stole 100,000 eggs 
      valued around $40,000 from Pete and Gerry's Organics LLC in Greencastle, 
      Pa. Waffle House's breakfast-all-day restaurants have begun charging a 50 
      cents-an-egg surcharge on meals. 

What's Next: Egg prices jumped 37% in December from the prior year, and on Friday hit fresh highs of $7.47 a dozen in the Midwest, $7.95 in New York, and $9.11 in California, according to Agriculture Department data. Egg prices are expected to rise 20% this year.

-- Janet H. Cho

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Trump Plan for Reciprocal Tariffs Sows Confusion

President Donald Trump plans to announce reciprocal tariffs this week on countries that have their own levies on U.S. imports, something that sowed confusion when he announced the plan last week. It isn't even a technical term used by international trade organizations, but it does fulfill a campaign promise.

   -- Trump is using "reciprocal tariffs" to refer to changes that U.S. customs 
      will make to, in his words, "ensure reciprocal and fair trade." He has 
      said if India, China, or another country imposes 100% or 200% tariffs on 
      American imports, the U.S. will impose the same percentage of tariffs 
      back. 
 
   -- The U.S. and other developed economies have kept tariffs low to encourage 
      free trade. Australia, the U.S., Japan, and Canada have some of the 
      lowest tariffs in the world, according to a Capital Alpha Partners 
      analysis. The average U.S. tariff rate was 3.3%. 
 
   -- Broadly increasing tariffs would require agencies to reset "tens of 
      thousands" of tariff codes, said Christine McDaniel, former senior trade 
      economist in the White House Council of Economic Advisers. Business 
      executives also have been grappling with how to gauge the effects of new 
      tariffs on their bottom lines. 
 
   -- From mid-December through last Thursday, 146 companies in the S&P 500 
      mentioned the word "tariff" or "tariffs" on their earnings calls, 
      according to FactSet. That's the highest number since the second quarter 
      of 2019, and was about half the 291 index companies that had calls during 
      that period. 

What's Next: Trump is eyeing tariffs on the European Union, which has tariffs on cars and agricultural products. Sunday afternoon, Trump said he would announce 25% tariffs on steel and aluminum from all countries after saying Friday he would support a plan for Nippon Steel to invest in, not buy, U.S. Steel.

-- Sabrina Escobar and Janet H. Cho

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Super Bowl Is a Big Bet for Sportsbooks After Regular Season

Gambling companies bet big on the Super Bowl, after NFL fans scored big by betting on games during the season, leading to hundreds of millions of dollars worth of losses for sportsbooks such as DraftKings and Flutter Entertainment-owned FanDuel. The betting sites are looking to get back some of their losses.

   -- One of the most popular bets was how many rushing yards Kansas City 
      Chiefs wide receiver Xavier Worthy would get, according to MarketWatch. 
      About 99% of all bets took the over. At BetMGM and DraftKings, the 
      leading bet to score a touchdown was Philadelphia Eagles running back 
      Saquon Barkley. 
 
   -- FanDuel said that the Eagles drew 59% of the bets to win--which they did. 
      And gamblers also predicted the Eagles-Chiefs matchup to be a 
      high-scoring one. About 83% of all bets on FanDuel are on the game's 
      point total to be higher than 48.5, MarketWatch reported. 
 
   -- Sportsbooks' struggles go back to the 2024 Super Bowl. A year ago, BetMGM, 
      partly owned by MGM Resorts, lost $5 million from bets just in New York 
      state after the game went into overtime. Flutter took a $74 million loss 
      in December when the Detroit Lions beat the San Francisco 49ers 40-34. 
 
   -- With an estimated $1.34 billion in legal bets this year, the Super Bowl 
      draws the most bets of any single event in the U.S. The college men's 
      basketball tournament can generate a higher total betting handle but it 
      is spread over three weeks. 

What's Next: DraftKings is expected to report earnings on Thursday, with analysts predicting a loss of 16 cents a share and revenue of $1.4 billion. Sports betting is expected to generate sales of $996 million, which would be down from $1.1 billion in the year-ago quarter, according to FactSet.

-- Liz Moyer

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BP Stock Jumps as Activist Elliott Takes Stake

BP, the oil major that has significantly underperformed peers over the past few years, has attracted the attention of influential activist investor Elliott Management, The Wall Street Journal reported, citing people familiar with the matter.

   -- Elliott, a U.S.-based hedge fund, will push for transformational change 
      at the U.K. energy giant. Elliott is known for pressuring companies to 
      fire management or split into pieces to drive higher returns for 
      shareholders. It wasn't clear how big a stake it has built in BP. 
 
   -- BP's decline has accelerated in recent years following a big and 
      ultimately bad bet on the green energy transition. Rival energy companies 
      that stayed focused on oil and gas have fared better. 
 
   -- BP's total return, taking dividends into account, came to 39% for the 
      past 10 years, compared with Shell's 49%. It is even further behind 
      Exxon's 80% total return and Chevron's 98%. BP didn't immediately respond 
      to a request for comment early Monday. 
 
   -- BP shares jumped in early London trading on Monday. Traders have been 
      frustrated by BP's increased focus on wind, solar, and other 
      renewable-energy sources, which haven't been as profitable as oil and 
      gas. 

What's Next: Elliott is yet to make its intentions clear, but BP CEO Murray Auchincloss will now be under even more pressure. Investors will learn about his plans when the company reports earnings Tuesday and hosts a Capital Markets Day on Feb.26. Without an improvement, BP may be forced to split up or merge with a rival.

-- Brian Swint

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February 10, 2025 07:17 ET (12:17 GMT)

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