OPENING CALL

Stock futures were muted on Tuesday while major stock markets in Asia and Europe fell as Trump's tariffs came into effect, lighting up a trade war that has investors concerned about global growth.

China and Canada responded by slapping tariffs on U.S. goods, and Mexico is expected to do the same, increasing concerns that a trade war could damage economic activity.

Indeed, the tariff news comes as investors were already worried about recent data that indicated a slowing economy.

The revenues for the U.S. from its tariffs could reach almost $300 billion a year, or 1% of GDP, according to Capital Economics.

"That could be a significant hit to the U.S. economy if those revenues are used to reduce the federal budget deficit rather than recycling them into the economy by cutting taxes or boosting federal spending."

The softer data of late and the tariff news has seen traders increase bets on the Federal Reserve cutting borrowing costs this year - a sign that growth concerns are currently trumping inflation fears.

Stocks to Watch

Acadia Healthcare's 2025 outlook missed estimates, and the company logged lower-than-expected profit and revenue. Shares dropped 12%.

AST SpaceMobile gained 2% after the company, which is developing a space-based cellular network, reported a narrower-than-expected loss.

CubeSmart logged decline profit and revenue, and issued a lower-than-expected outlook for the current year. Shares slid 3.6%.

General Motors was down 0.1%, Ford Motor rose 0.2%, and Jeep maker Stellantis declined 0.7% Ford CEO Jim Farley has said the tariffs threaten to wipe out billions in auto-industry profits as the levies have the potential to raise prices for car buyers.

HP Inc. said it would lay off up to 2,000 more employees, bringing the total number of job cuts to as many as 9,000. Details of the layoff came shortly after HP reported higher revenue. Shares fell 3.6%

Okta jumped after it reported better-than-expected earnings and revenue, and its revenue forecast beat Wall Street predictions.

Tesla was down 0.5% after falling 2.8% on Monday as Trump's tariffs announcement sent Wall Street reeling. Tesla assembles all its vehicles for the domestic market in the U.S., but about 15% of the parts in a Model Y sold in the U.S. come from Mexico. Some parts come from Canada as well, though an exact amount is harder to pin down.

Nvidia rose 0.6% after stock dropped 8.7% in the previous session on tariff worries, including continued concerns about potential restrictions on exports of its AI hardware amid reports that advanced chips have been reaching China despite U.S. sanctions.

Walgreens Boots Alliance rose 6% after The Wall Street Journal reported the drugstore chain was nearing a deal with private-equity firm Sycamore Partners to be acquired for around $10 billion.

Watch For:

Earnings from Target, CrowdStrike Holdings, AutoZone, Ross Stores, On Holding, Best Buy, Box Inc., Plug Power, and Nordstrom.

Today's Headlines/Must Reads:

- Store-Brand Supplier Feels the Pain as Shoppers Pull Back Even on Lower-Cost Groceries

- This Scientist Left OpenAI Last Year. His Startup Is Already Worth $30 Billion.

- Greenland Has the Makings of a Mining Boom. So Where Is Everyone?

MARKET WRAPS

Forex:

The dollar fell on concerns that Trump's trade policies could hurt economic growth, Deutsche Bank said.

The dollar has previously tended to rise in reaction to tariffs on expectations that such policies could lift inflation and limit rate cuts.

However, there's been an apparent broader shift in market perspectives on tariffs, with the focus moving towards the negative implications for growth, and this has boosted Fed rate-cut expectations, it said.

The prospect of increased European defense spending is unlikely to provide a significant boost to eurozone growth or the euro, ING said.

Instead, softer U.S. economic data and increased Fed rate-cut expectations have largely driven the euro's recent appreciation against the dollar and the currency's outlook is a tough call, but looming tariffs are a "real threat to an open economy such as the eurozone."

Bonds:

U.S. activity might suffer more from the impact of Trump's policy in the short term than initially expected, favoring short-dated Treasurys, Natixis said.

It's one of a few reasons why it makes more sense to favor the short-end of the U.S. curve (2-year) than the intermediate/long end, it said.

Meanwhile, market pricing of the Fed's rate path should play only a limited role for long-dated Treasurys for now.

As long as the market continues to assume that the Fed's next move will be a rate cut rather than a rate hike, "monetary policy expectations will not be a significant driver for the curve in the long end."

Two-year Treasurys have room to rally, Natixis said separately, forecasting the 2-year Treasury yield to reach 3.85% at the end of the year.

In contrast, it expects the 10-year Treasury yield to hover around Natixis's year-end target of 4.50%, with some volatility.

UOB said the 10-year Treasury yield could fall below the key support area between 3.980% and 4.060%, UOB said, according to the weekly chart.

Ten-year Treasury yields fell below UBS's 2025 forecast of 4.25%, but entry points for buyers were expected to emerge later, it said.

Energy:

Oil prices extended losses after news that OPEC+ will start raising output in April and as U.S. tariffs took effect, raising fears of a trade war that could hurt the global economy and crude demand.

OPEC+'s decision "is motivated by the market pivoting from a strategy wherein OPEC+ had supported prices to a more long-run equilibrium wherein OPEC+ defends market share," MUFG said.

"The negative price reaction has been further exacerbated by the risk-off mood triggered by the U.S.-led escalations in the trade war."

Meanwhile the suspension of U.S. military aid to Kyiv raises further uncertainty over the future of peace talks following his clash with Ukrainian President Volodymyr Zelensky.

Goldman Sachs agreed that OPEC+'s decision to start raising output in April reflects lower global inventories and a shift in strategy to regain market share.

Goldman warns higher-than-expected supply and a potential demand hit due to softer U.S. activity and escalating tariffs pose downside risks to its oil price forecast.

The U.S. bank forecasts brent crude to average $78 and $73 a barrel in 2025 and 2026, respectively, and WTI at an average of around $74-$68 a barrel in the same periods.

DNB Markets expected brent crude to dip below the $70-a-barrel mark if OPEC+ doesn't quickly change its course.

Metals:

Gold futures rose reflecting the highest levels of uncertainty this year in the U.S. market, XS.com said.

Base metal prices fell, as Trump's tariffs on Mexico, Canada and China, as well as 25% levy on all aluminum and steel products, will be enforced from Tuesday.

Lithium Outlook

A lower cost curve should make it harder for lithium to rally and instead lead to flat prices in the absence of any more meaningful supply cuts, Morgan Stanley said.

Copper Outlook

While the copper market is clouded by uncertainty over potential tariffs, the metal's outlook is positive , according to UBS.

That's due to limited mine-supply growth, a potential developed-world manufacturing recovery, strong structural demand from electrification and low inventories.

TODAY'S TOP HEADLINES

Kraft Heinz Dips a Toe into Booze

Kraft Heinz, America's famed ketchup and bologna seller, is hoping you'll buy its vodka seltzers too.

The packaged-food giant is rolling out its first alcohol product for grocery stores, unveiling a new hard seltzer infused with Crystal Light, a powdered mix traditionally added to water. The "vodka refreshers" - available initially in lemonade and wild strawberry flavors - will make their debut in select northeast U.S. supermarkets this month, with plans for a broader expansion next year.

Founding Family of 7-Eleven Chain Says Buyout Proposal Scrapped

TOKYO-Seven & i Holdings' founding family said it decided to pull its proposal to privatize the Japanese owner of the 7-Eleven convenience-store chain as it found it difficult to secure enough financing in a short time.

"Given that Seven & i is in a situation where it is required to make swift management decisions and implement them to respond to the environment surrounding the company and the challenges it faces, the founding family has decided to withdraw the proposal to take the company private," Junro Ito, a top Seven & i executive and son of the founder of the Japanese retail giant, and Ito-Kogyo, the family's asset-management company, said in a statement.

Trump Tariffs Usher In New Era of Protectionism

The U.S. economy entered a new era at 12:01 a.m. Tuesday, as President Trump's tariffs on imports from Mexico and Canada took effect. The new tariffs on imported goods ended decades of free trade among the three countries, and stood to disrupt entire industries.

The 25% tariffs will be levied on imports from Mexico and Canada, with the exception of energy products such as crude oil and natural gas, which will be tariffed at 10%. Canada said it would impose retaliatory tariffs.

The St. Louis Fed President Is Carefully Watching This Economic Indicator

St. Louis Fed President Alberto Musalem is optimistic that the outlook for the U.S. economy will remain solid this year, but he is carefully monitoring how much consumers and businesses expect prices to rise.

In remarks prepared for delivery to the NABE Economic Policy Conference in Washington, D.C., Musalem said that his base case for the U.S. economy is that inflation continues to decline toward the Federal Reserve's 2% target, while the labor market remains near full employment. That would require that monetary policy remains modestly restrictive until progress on inflation is assured, he added, as well as ensuring that inflation expectations remain well anchored.

RFK Jr.'s Health Department Heightens Scrutiny of Vaccines

Robert F. Kennedy Jr. is taking the first steps toward reshaping how the federal government oversees vaccines.

In Kennedy's first few weeks at the helm, the Health and Human Services Department scuttled meetings of infectious-disease experts and began scrutinizing vaccine contracts.

U.S. Pauses All Military Aid to Ukraine

The U.S. will pause all military aid to Kyiv until President Trump determines that Ukrainian President Volodymyr Zelensky is making a good-faith effort toward peace negotiations with Russia, according to a White House official.

"The president has been clear that he is focused on peace. We need our partners to be committed to that goal as well. We are pausing and reviewing our aid to ensure that it is contributing to a solution," a White House official said in a statement.

Write to clare.kinloch@wsj.com

TODAY IN CANADA

Earnings:

First National Financial 4Q

GDI Integrated Facility Services 4Q

Pet Valu Holdings 4Q

Economic Indicators $(ET)$:

- Nothing major scheduled

Stocks to Watch:

DRI Healthcare Trust 4Q EPS 12c; 4Q Adj EPS 76c

Alimentation Couche-Tard: Seven & I Holdings:Continuing Talks with Alimentation Couche-Tard; Seven & I: Continue to Consider All strategic Options, Including Couche-Tard Proposal;

Report Saying Company Is Rejecting Couche-Tard Takeover Proposal Is Not True; Seven & I Holdings' Founding Family: Decided to Pull Acquisition Proposal as It Was Difficult to Secure Financing; Seven & I Founding Family: Will Continue to Contribute to Growth of Seven & I- No items published

Other News:

Canada's Prime Minister Calls U.S. Tariffs 'Unjustified,' Vows Retaliation

Expected Major Events for Tuesday

00:01/UK: Feb Shop Price Index

05:00/JPN: Feb Consumer Confidence Survey

09:00/ITA: Jan Unemployment

13:55/US: 03/01 Johnson Redbook Retail Sales Index

15:00/US: Mar RCM/TIPP Economic Optimism Index

21:30/US: API Weekly Statistical Bulletin

All times in GMT. Powered by Kantar Media and Dow Jones.

Expected Earnings for Tuesday

2seventy bio Inc $(TSVT)$ is expected to report $-0.20 for 4Q.

908 Devices Inc $(MASS)$ is expected to report $-0.39 for 4Q.

ATN International Inc $(ATNI)$ is expected to report $-0.24 for 4Q.

Aclaris Therapeutics Inc (ACRS) is expected to report $-0.12 for 4Q.

Airsculpt Technologies Inc (AIRS) is expected to report $-0.05 for 4Q.

Amedisys Inc $(AMED)$ is expected to report $0.98 for 4Q.

American Hotel Income Properties REIT LP (HOT.UN.T) is expected to report for 4Q.

Amylyx Pharmaceuticals Inc $(AMLX)$ is expected to report $-0.66 for 4Q.

Angel Oak Mortgage REIT Inc $(AOMR)$ is expected to report $0.21 for 4Q.

Ascent Solar Technologies Inc $(ASTI)$ is expected to report for 4Q.

Best Buy Co Inc $(BBY)$ is expected to report $2.40 for 4Q.

CPI Card Group Inc (PMTS,PMTS-T) is expected to report $0.59 for 4Q.

Cohen & Co Inc $(COHN)$ is expected to report for 4Q.

Compugen Ltd (CGEN,CGEN.TV) is expected to report $0.07 for 4Q.

Consolidated Communications Holdings Inc $(CNSL)$ is expected to report for 4Q.

Credo Technology Group Holding Ltd (CRDO) is expected to report $0.11 for 3Q.

Denali Therapeutics Inc $(DNLI)$ is expected to report $-0.80 for 4Q.

EVgo Inc $(EVGO)$ is expected to report $-0.10 for 4Q.

Enterprise Group Inc (E.T) is expected to report for 4Q.

Esperion Therapeutics Inc $(ESPR)$ is expected to report $-0.14 for 4Q.

Gossamer Bio Inc $(GOSS)$ is expected to report $-0.14 for 4Q.

InfuSystems Holdings Inc $(INFU.UK)$ is expected to report $0.08 for 4Q.

LB Foster Co $(FSTR)$ is expected to report $0.29 for 4Q.

MGE Energy Inc (MGEE) is expected to report for 4Q.

Matterport Inc $(MTTR)$ is expected to report $-0.10 for 4Q.

Netlist Inc (NLST) is expected to report $-0.04 for 4Q.

Neuronetics Inc $(STIM)$ is expected to report $-0.23 for 4Q.

Olaplex Holdings Inc $(OLPX)$ is expected to report $-0.02 for 4Q.

Pet Valu Holdings Ltd (PET.T) is expected to report for 4Q.

Praxis Precision Medicines Inc $(PRAX)$ is expected to report $-3.09 for 4Q.

Renovaro Inc $(RENB)$ is expected to report for 2Q.

SOPHiA GENETICS SA (SOPH) is expected to report $-0.21 for 4Q.

Seres Therapeutics Inc $(MCRB)$ is expected to report $-0.20 for 4Q.

Smart Share Global Ltd - ADR (EM) is expected to report for 3Q.

Spirit AeroSystems Holdings Inc $(SPR.UK)$ is expected to report $-0.43 for 4Q.

Target Corp $(TGT)$ is expected to report $2.27 for 4Q.

Village Super Market Inc - Class A (VLGEA) is expected to report for 2Q.

Vivid Seats Inc $(SEAT)$ is expected to report $0.03 for 4Q.

Yield10 Bioscience Inc (YTEN) is expected to report for 3Q.

Zentalis Pharmaceuticals Inc $(ZNTL)$ is expected to report $-0.69 for 4Q.

Powered by Kantar Media and Dow Jones.

ANALYST RATINGS ACTIONS

ACNB Corp Raised to Overweight From Neutral by Piper Sandler

AES Corp Cut to Sell From Neutral by Seaport Global

Agco Cut to Neutral From Outperform by Baird

Bowhead Specialty Holding Raised to Outperform From Market Perform by Keefe, Bruyette & Woods

Chipotle Mexican Raised to Overweight From Equal-Weight by Morgan Stanley

ChoiceOne Financial Svcs Raised to Buy From Neutral by Janney Montgomery Scott

Deere & Co Cut to Neutral From Outperform by Baird

Dollar General Cut to Hold From Buy by Deutsche Bank

FTAI Aviation Cut to Hold From Buy by Stifel

Gray Television Raised to Equal-Weight From Underweight by Wells Fargo

Kinder Morgan Raised to Overweight From Equal-Weight by Barclays

Middlesex Water Raised to Outperform From Neutral by Baird

Mosaic Raised to Overweight From Neutral by JP Morgan

Pliant Therapeutics Cut to Market Perform From Outperform by Leerink Partners

Sempra Cut to Hold From Buy by Jefferies

Southwest Airlines Cut to Underweight From Neutral by JP Morgan

Sunnova Energy Intl Cut to Neutral From Buy by Roth MKM

Sunnova Energy Intl Cut to Neutral From Overweight by JP Morgan

Tandem Diabetes Care Cut to Equal-Weight From Overweight by Wells Fargo

Thor Industries Raised to Buy From Neutral by B of A Securities

UWM Holdings Raised to Outperform From Market Perform by Keefe, Bruyette & Woods

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

March 04, 2025 06:14 ET (11:14 GMT)

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