Stocks Close Lower After Late-Day Rally Fades as Tariffs Weigh on Sentiment; Banks Lead Broad-Based Decline

S&P 500 Gives Back All of Its Post-Election Gains

4 minutes ago

U.S. stocks’ post-election run has come full circle. 

The S&P 500 on Tuesday closed at its lowest level since Election Day on Nov. 5. At just under 5,780, the benchmark index is down 6% from its all-time closing high, which was set less than two weeks ago.

Concerns about the effects of trade policy, with President Donald Trump’s tariffs on Canada and Mexico taking effect today, are currently in focus, but factors including stubborn inflation, the path ahead for interest rates and the health of the AI trade have also weighed on markets, pulling major indexes back from post-election highs.

The tech-focused Nasdaq is also below its Nov. 5 close; so is the small-cap Russell 2000. The Dow industrials are still holding onto post-election gains—but it, along with the other three indexes mentioned here, are all in the red this year. Concerns about the state of the US economy and markets have driven some investors to consider European equities. 

“Considerable downside risks to the growth outlook are mounting,” Deutsche Bank analysts wrote in a note published earlier today. “Trade policy uncertainty has hit historical levels, financial conditions are tightening, sentiment indicators signal weaker growth momentum, and more trade actions are likely to come.”

Trump is set to speak later today. His speech comes ahead of closely watched job-market data due Friday; personal spending fell in January, according to recently released data, while the Federal Reserve’s preferred inflation gauge suggested progress against inflation. 

–David Marino-Nachison

Auto Sector Stands to Be Hard Hit by Tariffs

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Tariffs are expected to dramatically increase costs for automakers Ford (F), General Motors (GM), and Stellantis (STLA).

All three manufacture parts and assemble cars in factories across North America. The North American auto industry is so intertwined that the U.S. National Highway Traffic Safety Administration doesn’t even distinguish between Canadian-made and American-made parts when calculating how much of each car is domestic.

Canada and Mexico accounted for 47% of U.S. automobile imports and 54% of car parts imports in 2023. They’re also major markets for U.S. auto exports, with the two receiving 75% of America’s exported car parts that year.

Bloomberg Intelligence analyst Michael Dean on Tuesday estimated that Jeep and Chrysler maker Stellantis could take a 3.44 billion euro hit to its earnings this year.

Stellantis shares fell more than 4% on Tuesday, as did shares of General Motors. Ford closed nearly 3% lower. Shares of each of the automakers have lost ground since the start of the year.

–Colin Laidley

What Companies are Saying About the Impact of Tariffs

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Some Target prices could soon rise after tariffs on Mexican imports are enacted, the retailer’s CEO said Tuesday.

Target (TGT) will try to shield consumers from as many price increases as it can, but charging more will be necessary for fresh produce and some other categories, Brian Cornell said on CNBC Tuesday morning.

Target, along with many U.S. grocers, is dependent on Mexico for fresh produce during the winter, Cornell said. The supply chain for fresh fruits and vegetables is “really short,” which means prices could go up within days, he said. Bananas, strawberries and avocados are among the items that could see higher prices.

“We’re going to try to make sure we can do everything we can to protect pricing,” he said on CNBC. “But if there’s a 25% tariff, those prices will go up.”

Target has reduced how much it imports from China. A few years ago, more than 60% of imports came from the country. That’s now down to 30% and on track to hit 25%, he said.

A number of other companies have also diversified their supply chain to avoid paying more in tariffs, including Steve Madden (SHOO) and Newell Brands (NWL), the latter which sells Yankee candles and Graco baby gear. Mattel (MAT) CEO Ynon Kreiz said Tuesday on CNBC that the toy company is on a years-long journey to diversify its supply chain so it can respond to tariffs and other changing market conditions.

And some companies say they have the wherewithal to hold off on raising prices, at least initially: Chipotle (CMG) CEO Scott Boatwright said over the weekend that the burrito giant will absorb higher import costs. 

Best Buy (BBY) imports no more than 3% of its merchandise, but many vendors in the tech industry source from China and Mexico, CEO Corie Barry said Tuesday morning. They’ll pass on at least some of the cost of tariffs to Best Buy, making price increases for consumers “highly likely,” she said on an earnings conference call.

The pre-existing 10% tariff on goods from China could cost Best Buy about 1 percentage point in comparable sales over the course of a year, Barry said, assuming that people buy fewer items because they cost more. 

If the tariffs put in effect Tuesday endure, the effect could be more significant, but it’s hard to gauge how consumers will react, Barry said.

“We’ve never seen this kind of breadth of tariffs,” Barry said, according to a transcript made available by AlphaSense. “It’s difficult for us to understand elasticities perfectly because you don’t have anything predictive in our history.”

Tesla Tumbles as BofA Cuts Price Target on Stock

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Tesla (TSLA) shares slid again Tuesday amid worries about tariffs, weak Chinese sales and souring brand sentiment, with analysts at Bank of America lowering their price target for the stock.

The Trump administration’s tariffs on Canada and Mexico, which went into effect Tuesday, “pose significant risk” to North American automakers including Tesla, Bank of America analysts said.

Declining European sales have also put pressure on the stock, they said, along with “sentiment on the brand potentially souring” as CEO Elon Musk has made headlines for his role in the Trump administration’s Department of Government Efficiency.

Sales of Tesla’s China-made vehicles have slipped as well, falling 49.2% year-over-year in February, Reuters reported Tuesday, citing data from the China Passenger Car Association.

BofA reiterated a “neutral” rating for the stock, but lowered its price target to $380 from $490, just slightly above the average of analysts polled by Visible Alpha at $368.

The electric vehicle maker’s stock was down 4.4% at $272 in recent trading and has lost about a third of its value since the start of 2025.

The stock had risen to a record high around $488 in in mid-December amid optimism that Musk’s close relationship with Trump would benefit the EV maker. Shares have since given up almost their entire post-election gain.

The reduced price target from BofA comes just a day after Morgan Stanley named the company its “Top Pick” in the U.S. automobile sector, saying Tesla’s lower-than-expected deliveries were “not particularly narrative changing.”

–Andrew Kessel

Sneaker Maker On Holdings Surges as Global Sales Jump

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On Holding (ONON) shares advanced when the Swiss sportswear maker posted better-than-expected results as sales climbed in all its global markets.1

The company, part-owned by tennis great Roger Federer, reported fourth-quarter adjusted earnings per share (EPS) of 0.33 Swiss francs ($0.37), with revenue jumping nearly 36% year-over-year to CHF606.6 million ($681.1 million). Both exceeded Visible Alpha forecasts.

Sales rose in every region, including by 28% to CHF385.1 million in the Americas.

Executive co-chairman David Allemann said On’s “partnerships with icons like Roger Federer, Zendaya, and FKA twigs have propelled On to become a beloved brand.”

On sees full-year net sales of at least CHF2.94 billion and adjusted EBITDA margin of 17.0% to 17.5%.

U.S.-traded shares of On Holding were up 5% in recent trading and have increased nearly 50% over the past 12 months.

What the White House Expects to Accomplish With Tariffs

5 hr 14 min ago

Commerce secretary Howard Lutnick made sweeping promises for what President Donald Trump’s tariff-heavy economic policies will accomplish.

Speaking in an interview with CNBC on Tuesday morning, Lutnick said the U.S. will have more manufacturing, lower taxes, a balanced federal budget and lower borrowing costs as a result of taxing imported goods.

Experts have warned that tariffs will push up the cost of living, but Lutnick dismissed those concerns as “whining and complaining.”

Read the full article here.

Best Buy Plunges as Retailers Cites Tariff, Inflation Concerns

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Best Buy (BBY) shares plunged nearly 15% Tuesday morning to lead S&P 500 decliners as the electronics retailer warned that new tariffs and inflation will negatively impact sales.

In a transcript of its fiscal 2025 fourth-quarter earnings call supplied by AlphaSense, CEO Corie Barry explained that the company anticipates “our vendors across our entire assortment will pass along some level of tariff costs to retailers, making price increases for American consumers.”

Barry called the tariffs situation “highly dynamic” with “uncertainty about the duration.” The CEO added that Best Buy was “operating in an uneven environment and expected there would be industry pressure,” and that even though it believes consumers will remain resilient, they are “still dealing with high inflation.”

The comments came after the company reported fourth-quarter adjusted earnings per share (EPS) of $2.58, with revenue falling nearly 5% year-over-year to $13.95 billion, in part because fiscal 2025 was 13 weeks long and fiscal 2024 was 14 weeks. Comparable store sales grew 0.5%. All three were better than Visible Alpha forecasts.

Best Buy sees full-year adjusted EPS of $6.20 to $6.60, revenue of $41.4 billion to $42.2 billion, and comparable store sales in the range of flat to up 2.0%. However, the company pointed out that its guidance did not take into account recently enacted or proposed tariffs. Analysts surveyed by Visible Alpha were looking for adjusted EPS of $6.60, revenue of $41.77 billion, and comparable store sales growth of 1.81%.

–Bill McColl

Target Warns About Consumer, Tariff Uncertainty

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Target (TGT) posted better-than-expected fourth-quarter results but warned that the uncertainty around tariffs would weigh on current-quarter results.

The company reported fourth-quarter adjusted earnings per share (EPS) of $2.41 on revenue that declined 3% year-over-year to $30.92 billion. Analysts polled by Visible Alpha expected $2.26 and $30.77 billion, respectively.

Target’s comparable sales rose 1.5%, above projections of 1.39% growth. In January, the company lifted its comparable sales projection to 1.5% growth from “approximately flat” following Q3 on the back of a stronger-than-expected holiday shopping season.

“In light of ongoing consumer uncertainty and a small decline in February Net Sales, combined with tariff uncertainty and the expected timing of certain costs within the fiscal year, the Company expects to see meaningful year-over-year profit pressure in its first quarter relative to the remainder of the year,” Target said.

For the full year, Target sees net sales growth “in a range around 1 percent,” comparable sales growth “in a range around flat,” and adjusted EPS between $8.80 and $9.80. Analysts were looking for sales growth of 2.66%, comparable sales growth of 1.81%, and adjusted EPS of $9.30.

Target shares were down more than 5% in early trading and have lost nearly a quarter of their value over the past 12 months.

–Nisha Gopalan

Walgreens Jumps as Company Nears Deal to be Taken Private

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Walgreens Boots Alliance (WBA) shares are jumped in premarket trading Tuesday after a report indicated the troubled drugstore chain is nearing a deal with Sycamore Partners to be taken private for around $10 billion.

According to The Wall Street Journal, citing people familiar with the matter, the drugstore company and the private equity firm are targeting a completion of the transaction as soon as Thursday barring a “last-minute snag” that derails the deal. The Journal reported that Sycamore would pay between $11.30 a share and $11.40 a share in cash for Walgreens and the deal would include “contingent value rights that would increase the value if certain targets are later reached.”

Walgreens shares were up more than 5% at $10.80 ahead of the opening bell.

The Journal also reported that if the deal passes, Sycamore would keep the core U.S. retail business and sell off or take public the other parts of the company.

Walgreens and Sycamore Partners didn’t immediately respond to requests for comment.

Walgreens shares had been rising this year on previous reports that the private-equity firm was in talks to take the drugstore chain private. The company has been struggling, announcing in October a plan to shutter some 1,200 “underperforming” stores over the next three years and temporarily suspending its quarterly dividend to conserve cash earlier this year.

Walgreens shares have gained 10% this year but have lost half their value in the 12 months through Monday. 

–Nisha Gopalan

Futures Point to Lower Open for Major Indexes

8 hr 53 min ago

Futures tied to the Dow Jones Industrial Average were down 0.3%.

S&P 500 futures were off 0.7%.

Nasdaq 100 futures fell 0.9%.