The stock market loved U.S. President Donald Trump when he swept to victory in November's election. But now investors are finding him hard to read.

It has led to a volatile few months -- a brilliant November was followed by a disappointing December, then a strong January was almost entirely undone by a weak February.

The market is doing its best to price in what's coming under Trump 2.0, but it hasn't always got it right -- despite many of the policies being heavily trailed.

For example, Trump's announcement of a crypto strategic reserve sent digital assets soaring over the weekend. But it's nothing new -- in fact, Trump promised to create one on the campaign trail.

Conversely, if the White House goes ahead with plans for 25% tariffs on Canada and Mexico Tuesday -- a policy about which Trump has been very vocal -- it would still likely catch the market by surprise, though this time to the downside.

OK, the intense meeting between the U.S. president and Ukraine's Volodymyr Zelensky was something very few could've predicted. Markets have again been caught off guard, with European defense stocks soaring Monday. However, Trump has long promised to end the war in Ukraine so such a scenario was always a possibility.

Then there are the indirect consequences of the administration's policies. Consumer spending data have been weakening recently, as the threat of tariffs weigh on Americans' minds. A flurry of retail earnings this week will reveal more.

The market's guessing game is likely to last the best part of four years but this week could answer some pretty big questions on the rules of engagement. If the tariffs on Canada and Mexico come into effect as threatened then it might be time to take the president's policy remarks at face value, however painful that might be for stocks.

-- Callum Keown

*** Join Barron's senior managing editor Lauren R. Rublin and deputy editor Ben Levisohn today at noon when they interview market technician Katie Stockton, founder and managing partner of Fairlead Strategies, about the current technical setup for stocks, bonds, gold, and other assets. Sign up here.

***

It's Jobs Week Amid Rising Worries About the Economy

Investors are awaiting this week's jobs report amid rising worries about the state of the economy, fears that have weighed on stocks in recent days. In addition to the government's jobs report on Friday, the week highlights an update on private-sector employment and initial unemployment claims for last week.

   -- The reports also come as President Donald Trump's 25% tariffs on imports 
      from Canada and Mexico are set to kick in, along with a 10% increase on 
      goods from China. Tariffs could exacerbate inflationary trends that have 
      already led the Federal Reserve to take it slowly on cutting rates. 
 
   -- The Trump administration's cost cutting and job elimination efforts will 
      make their way into employment data eventually. Trump will outline his 
      agenda during the first State of the Union address of his second term on 
      Tuesday to a Congress that is trying to pass $2 trillion of cuts. 
 
   -- ADP's private payrolls reading is expected to report a 148,000 gain in 
      jobs in February, down from January's 183,000. Initial jobless claims for 
      the week ended March 1 are expected to have increased to 243,000. 
 
   -- In addition, the Fed will release its periodic report of economic 
      conditions in its 12 regional districts on Wednesday. The survey, called 
      the Beige Book, will provide a snapshot of hiring, economic activity, and 
      business borrowing in the past few weeks. 

What's Next: Friday's February jobs report is expected to show a 158,000 increase, up from January. The unemployment rate is expected to remain at 4% from the prior month, despite an increase in initial jobless claims, and average hourly earnings are forecast to rise 0.3%, down from January.

-- Janet H. Cho and Matt Bemer

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Bitcoin Pops After Trump Names Cryptos for Strategic Reserve

The price of Bitcoin jumped more than 10% on Sunday, to above $94,000, after President Donald Trump said it would be part of a Crypto Strategic Reserve, along with a handful of other digital currencies. Trump has vowed to make the U.S. the world's crypto capital.

   -- Trump once criticized cryptos as a "scam," but embraced them during his 
      campaign. At a Bitcoin conference in Nashville last summer, he brought up 
      the idea of a national Bitcoin stockpile. In January, he directed the 
      working group to evaluate forming a reserve but didn't mandate creating 
      one. 
 
   -- On Sunday, in a post on social media, Trump said the executive order on 
      digital assets directed his working group to move forward on a Crypto 
      Strategic Reserve, and he named Ripple's XRP, Solana, and Cardano to be 
      in it. Later he added Bitcoin and Ethereum to the list. 
 
   -- XRP's price was up more than 30% as of Sunday evening, according to 
      prices on CoinDesk. Solana was up more than 20%, and Cardano was up 68%. 
      Ethereum's price jumped more than 12%. Bitcoin is the oldest and biggest 
      cryptocurrency, and prices of smaller digital assets are volatile. 
 
   -- Bitcoin first surpassed $100,000 in December on expectations for lighter 
      regulation under Trump, who named crypto-friendly Paul Atkins to lead the 
      Securities and Exchange Commission. Since then, the SEC has dropped 
      several crypto-related cases. 

What's Next: It's not clear how a crypto reserve would be created. Bo Hines, a 29 year-old former college football player, is in charge of Trump's plan to boost the crypto industry. Hines is expected to host crypto companies at the White House on Friday for a summit.

-- Janet H. Cho

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Retailer Earnings This Week Could Show More Consumer Strain

Walmart's downbeat profit outlook set the tone for retailers due to report this week. All around there are added signs of stress for consumers. With sky-high prices for staples like eggs, shoppers are still focused on buying basics in the grocery aisle and walking past the higher-profit general merchandise.

   -- This week's reports include Target and Costco Wholesale. Bargain hunting 
      has been popular at retailers, even from affluent shoppers. Consumer 
      confidence is at an eight month low, and rising uncertainty about the 
      jobs picture and a slowing economy could mean further belt-tightening. 
 
   -- Consumer boycotts are also a factor. Last Friday was an "economic 
      blackout" day when shoppers urged each other not to spend money at major 
      retailers and abstain from all but essential purchases. More such days 
      are planned for later in the year as consumers protest the corporate 
      retreat from diversity goals. 
 
   -- At Target budget-conscious shoppers have veered away from clothing and 
      electronics, the type of discretionary purchases it relies on more so 
      than Walmart with its large grocery business. Still BofA analysts expect 
      strong holiday-period sales and higher demand for winter-season items., 
      MarketWatch reported. 
 
   -- At the same time warehouse club Costco has seen bigger opportunities 
      courting wealthier shoppers and promoting its pharmacy business, 
      MarketWatch adds. Target found itself under boycott pressure after 
      dropping its diversity initiatives, while Costco kept its DEI efforts 
      going. 

What's Next: Fears about inflation and the effect of tariffs on consumer prices and supply chains have prompted analysts to cut first quarter estimates for earnings per share at S&P 500 companies by more than normal, according to FactSet. The median estimate is down 3.5%.

-- Liz Moyer

***

Elon Musk Makes Another Bold Prediction On Tesla's Future

Bold predictions on Tesla's valuation by CEO Elon Musk have typically had a negative effect on the stock in the days after the forecasts, according to Barron's research. He made another big call over the weekend, saying the electric vehicle company's earnings could grow tenfold over the coming five years implying earnings per share of about $25, or roughly three times what Wall Street currently projects.

   -- Barron's looked at 10 times in the recent past that Musk has made a bold 
      prediction about Tesla's valuation. Tesla stock fell seven times the day 
      following the predictions. Most of them followed an earnings report. Two 
      were made outside of earnings, at Tesla's annual shareholder meetings. 
 
   -- These range from July 2021 when he said developing self-driving cars 
      could be "one of the most valuable things that is ever done in the 
      history of civilization," to a few weeks ago when he said Tesla could 
      eventually be worth more than the next five companies combined. 
 
   -- While Musk has generated long-term gains for investors, he has also 
      caused volatility with his controversial comments. Tesla stock was about 
      $220 a share after the 2021 prediction. Shares traded above $400 in 2022. 
      Shares closed February at just under $293, but they traded above $480 in 
      December. 

What's Next: Tesla reports first-quarter earnings on April 29, and analysts expect earnings per share of 54 cents. However, the stock often trades more optimistically around future inventions and on confidence in Musk than it does on fundamentals.

-- Al Root and Elsa Ohlen

***

Future of AI Will Dominate This Year's Mobile World Congress

Nvidia CEO Jensen Huang's theory that AI agents will become the next big thing for artificial intelligence will be tested starting today at the Mobile World Congress trade show in Barcelona. The event, which runs through Thursday, is both a smartphone showcase and a technology show.

   -- Telecommunications companies such as AT&T and Verizon, along with global 
      competitors, are ideal proving grounds for AI agents, programs that can 
      take simple directions and complete multistep tasks, because of their 
      huge customer-service teams and complex networks ripe for automation. 
 
   -- Amazon, Microsoft, Google's parent Alphabet, and others are vying to 
      convince big telecom companies to choose their public cloud 
      infrastructure, with AI as the bait on the hook. 
 
   -- Although Microsoft won the single biggest deal so far by bringing AT&T's 
      5G mobile network onto its cloud back in 2021, Amazon Web Services has 
      since won a string of deals, including bringing Comcast's 5G network onto 
      its cloud in December. 
 
   -- Software providers like Salesforce will make their case that the real 
      path to AI rewards is through adopting their agents for everything from 
      customer service to data analysis. Nvidia is pitching its hardware and 
      software platforms as the solution for supporting AI applications and 
      agents. 

What's Next: Whoever makes the biggest splash at MWC will indicate how the next stage of the AI race could play out. Major deals announced at MWC could help validate for investors the tens of billions that the companies are pouring into AI data centers.

-- Adam Clark and Janet H. Cho

***

MarketWatch Wants to Hear From You

The housing market is changing, and becoming a buyer's market. Sellers haven't quite accepted that yet. Are lower house prices next?

A MarketWatch correspondent will answer this question soon. Meanwhile, send any questions you would like answered to thebarronsdaily@barrons.com.

***

-- Newsletter edited by Liz Moyer, Patrick O'Donnell, Rupert Steiner

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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March 03, 2025 07:12 ET (12:12 GMT)

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