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Thursday, April 3

Noteworthy macro moves today: US Dollar Index -2.0%. Oil (WTI) -5.8%. Gold -1.9%. Noteworthy US mega-cap moves today: Apple Inc (AAPL) -7.8%. Broadcom Inc (AVGO) -7.3%. Amazon.com Inc (AMZN) -7.2%. 

Recent developments in global markets have been significantly influenced by the announcement of sweeping tariffs by U.S. President Donald Trump, which includes a 10% baseline tariff on all imports and higher rates for specific countries. This has triggered fears of an escalating trade war, leading to sharp declines across major equity indices globally; futures indicate that U.S. stocks could open down over 3%. The market's reaction reflects heightened risk aversion as investors anticipate potential economic slowdowns resulting from these protectionist measures.

In addition to the immediate impact on equities, there are notable shifts in currency dynamics with the U.S. Dollar experiencing substantial losses against its peers due to concerns about future growth prospects tied to Trump's tariffs. As traders reassess their positions amid this uncertainty, currencies such as the Euro and Pound Sterling have strengthened while safe-haven assets like gold reached new highs before paring some gains amidst ongoing volatility.

Economic data releases further complicate matters: initial jobless claims in the United States fell slightly below expectations but were overshadowed by rising layoffs reported at levels not seen since May 2020—275K cuts announced primarily linked to government efficiency initiatives raise alarms regarding labor market stability. Meanwhile, Canada’s exports dropped sharply alongside increasing import figures indicating shifting trade balances that may affect both domestic economies moving forward under current geopolitical tensions.

SPDR S&P 500 ETF Trust (SPY) [-3.5%]
The SPDR S&P 500 ETF Trust (SPY) has experienced a significant decline of 3.5% in pre-market trading, following President Trump's announcement of a 10% across-the-board tariff on all imports. This news coincided with a drop of 160 points, or 2.8%, in S&P 500 futures. SPY reached a low of 5,481 overnight, reflecting a peak-to-trough drop of approximately 5% in after-hours trading. The American Association of Individual Investors reported a bearish sentiment with a bull-bear spread of -40.1. Social media discussions highlighted that the S&P 500 lost over $1.5 trillion in market capitalization shortly after the tariff announcement. Additionally, concerns about market volatility and potential recession were raised, with Goldman Sachs revising its S&P 500 forecast amid these developments. Major contributors to SPY's performance included AAPL, NVDA, AMZN, MSFT, and META, all facing downward pressure due to the tariffs.

iShares China Large-Cap ETF (FXI) [-1.7%]
The iShares China Large-Cap ETF (FXI) has declined by 1.7% in pre-market trading, reflecting heightened concerns over escalating trade tensions following President Trump's announcement of new tariffs. The tariffs include a baseline rate of 10% on all imports and significantly higher rates for countries like China. In response, China has vowed to implement reciprocal tariffs, further intensifying market volatility. Additionally, FXI experienced a drop of approximately 3% in after-hours trading due to these developments. The Caixin Services Purchasing Managers Index for March reported a figure of 51.9, slightly exceeding expectations, yet this positive data was overshadowed by negative sentiment stemming from tariff announcements. Among FXI's holdings, JD.com faced a notable decline, affected by the closure of the de minimis tariff loophole, which will impact duty-free entries from China and Hong Kong.

NKE | -11.5% | -9.9B
Nike Inc | Footwear
Nike Inc. has seen a notable premarket decline, dropping significantly following the announcement of a 46% tariff on goods imported from Vietnam, a country critical to its supply chain. This news has heightened concerns about increased costs for consumers and potential impacts on profit margins. Social media discussions have intensified, with users expressing worries about Nike's vulnerability due to its reliance on Vietnamese manufacturing, where over half of its footwear is produced. Additionally, Lululemon Athletica Inc. has experienced a considerable decline following a downgrade and concerns over tariff increases affecting the retail sector, further contributing to broader market anxiety that may also influence Nike's stock performance. The overall market is also moving lower amid fears of escalating trade tensions, which has led to significant declines across global equity markets.

AMZN | -5.9% | -113.2B
Amazon.com Inc | Broadline Retail
Amazon.com Inc has faced a notable decline of 5.9% in pre-market trading. The company is currently challenging a newly introduced French book delivery fee, arguing it is discriminatory and violates EU law. This fee, which charges three euros for deliveries under 35 euros, aims to protect local bookstores but is seen by Amazon as a breach of the EU e-commerce directive. Additionally, RBC has revised its price target for Amazon from 265 to 235 while maintaining an outperform rating. Recent discussions on social media highlighted a significant drop in Amazon's market cap, which fell by over 6% after hours, amid broader market concerns regarding upcoming tariffs impacting large importers. Concurrently, the ProShares UltraPro QQQ experienced a significant decline, which may be influencing Amazon's performance.

AAPL | -7.7% | -243.0B
Apple Inc | Technology Hardware, Storage & Peripherals
Apple Inc. is experiencing significant downward pressure, moving in tandem with the broader market and the Technology Hardware, Storage & Peripherals sector. This decline follows the announcement of reciprocal tariffs by President Donald Trump, which will impose a 34% levy on imports from China starting April 9. Analysts at Citi estimate that this could reduce Apple's gross margin by 9%, leading to a potential market cap loss of approximately $221.7 billion. The overall market reacted negatively, with the “Magnificent Seven” tech stocks projected to lose a combined $685 billion in value. Social media discussions highlight concerns over the inability to pass on tariff costs, with Jefferies estimating a possible 14% decrease in Apple's FY25 net profit if tariffs affect 37 million iPhones manufactured in China. As a result, Apple shares have dropped significantly, reflecting broader market trends amid escalating trade tensions.

NVDA | -5.8% | -149.2B
NVIDIA Corp | Semiconductors
NVIDIA Corp's stock has dropped significantly, coinciding with a broader market decline influenced by the recent announcement of sweeping tariffs by U.S. President Donald Trump. These tariffs, which include a baseline duty on all imports and higher rates for specific countries, have led to fears of a global trade war, negatively impacting major tech stocks. Despite a surge in orders exceeding $16 billion from Chinese tech firms for NVIDIA's H20 server chips, the company's stock has declined over 20% year-to-date, with a notable drop attributed to market reactions following the tariff news. Social media discussions reflect concerns about the tariffs' impact on NVIDIA, particularly regarding unfavorable rates for Taiwan and China, while also highlighting ongoing demand for AI products and potential server leasing agreements involving NVIDIA technology. In correlated movements, NVIDIA has experienced a decline alongside the Invesco QQQ Trust and the S&P 500 Index.

TSLA | -6.0% | -50.9B
Tesla Inc | Automobile Manufacturers
Tesla Inc has experienced a notable decline in pre-market trading, coinciding with broader market downturns. The company's recent report of a 13% year-over-year drop in Q1 vehicle deliveries marks its weakest sales quarter, with total deliveries at 336,681 vehicles, a significant decrease from the previous quarter. This disappointing performance has raised concerns among analysts, particularly regarding CEO Elon Musk's political involvement and its potential implications. Additionally, social media discussions highlight a 42.5% plunge in Tesla sales in Germany, alongside reports of heightened competition. Analysts have adjusted their price targets for Tesla, with Goldman Sachs lowering its target from 320 to 275 and Truist from 373 to 280. The overall market sentiment has been further rattled by President Trump's recent tariff announcements, which have contributed to declines across global equity markets.

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