In recent developments, stock futures have shown a promising upward trend following remarks from Commerce Secretary Lutnick, who hinted at a potential compromise regarding the contentious tariffs imposed during the Trump administration.
As investors closely monitor the evolving landscape of trade policies, the possibility of a thaw in relations between the U.S. and its trading partners has sparked renewed optimism in the markets.
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Stock Futures Rise as Commerce Secretary Lutnick Hints at Potential Compromise on Trump Tariffs
U.S. stock futures climbed on Wednesday morning following significant declines across all three major indices for a second consecutive day.
Futures linked to the Dow Jones Industrial Average surged by 255 points, or 0.6%. Meanwhile, S&P 500 futures and Nasdaq 100 futures increased approximately 0.73% and 0.93%, respectively.
The Dow, a blue-chip benchmark, plummeted 670.25 points, or 1.55%, by the close of Tuesday’s trading session. The S&P 500 fell by 1.22%, and the Nasdaq Composite experienced a decrease of 0.35%. At one point, the Nasdaq dipped over 2%, nearing correction territory, defined as a decline of 10% from its most recent peak.
U.S. stocks have faced downward pressure for two days after President Donald Trump’s new 25% tariffs on imports from Canada and Mexico took effect on Tuesday. In retaliation, Canada, Mexico, and China—facing an additional 10% duty—have laid out plans for countermeasures.
However, Commerce Secretary Howard Lutnick mentioned on “Fox Business” Tuesday that there’s potential for the U.S. to find some common ground with Canada and Mexico, indicating discussions on the tariffs might yield a compromise.
Michael Green, chief strategist at Simplify Asset Management, highlighted the unpredictability that comes with Trump’s policies. “We’re at a juncture where a single tweet or piece of information can dramatically alter market perceptions,” he explained.
Green warned that escalating trade tensions, driven by retaliatory tariffs, could dampen economic growth moving forward, emphasizing the uncertainty surrounding long-term outcomes.
He noted, “This could lead to a forced savings cycle, negatively impacting employment and wealth, and that’s what the markets are currently pricing in. The unknowns loom large,” he told CNBC.
On a related note, new economic data is set to be released Wednesday morning, including the ADP private payrolls report for February, along with last month’s purchasing managers’ index.
Companies such as Thor Industries, Abercrombie & Fitch, Campbell’s, and Brown-Forman are scheduled to announce their quarterly earnings on Wednesday.
Investor Alert: Treasury Yields Surge Amid Growing Concerns Over Trump’s Tariffs
U.S. Treasury yields experienced an uptick on Wednesday as investors pondered the implications of President Donald Trump’s tariffs on Canada, Mexico, and China.
At around 4:55 a.m. ET, the benchmark 10-year Treasury yield increased by over three basis points to reach 4.242%. The yield on the 2-year Treasury rose by more than two basis points, hitting 3.982%.
One basis point corresponds to 0.01%, and it’s essential to remember that yields and prices maintain an inverse relationship.
Investor apprehension stems from the potential consequences of Trump’s tariffs, which enacted 25% duties on imports from Canada and Mexico on Tuesday, alongside an additional 10% tariff directed at goods from China.
In response, Canada, Mexico, and China have been actively preparing retaliatory approaches against U.S. policies.
Tariff Concerns Erase Election Progress, Spark Concerns of Stagflation Among Economists
President Donald Trump’s measures imposing 25% tariffs on Canada and Mexico, along with a 10% tariff on China, are now a reality, dispelling the notion that these actions were mere negotiation tactics as many hoped. Canada and China have already announced countermeasures, while Mexico is set to respond on Sunday.
Though international trade relations may seem strained, it’s domestic consumers and the economy that could bear the brunt of the fallout. Business leaders in shipping and retail—industries often considered economic indicators—expressed their concerns that these tariffs could lead to price hikes in the near term.
In the markets, investor sentiment was similarly rattled. All major U.S. indices showed declines. The S&P 500’s gains from the post-election excitement surrounding Trump have now evaporated. Since his inauguration in January, tech stocks have been particularly hard hit, as the taxes on foreign goods increasingly resemble taxes on stocks.
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Adidas Exceeds Fourth Quarter Sales Expectations with Successful Yeezy Collection Sell-Out
Adidas announced on Wednesday that its fourth-quarter sales surpassed expectations, bolstered by the sale of its remaining Yeezy stock, but cautioned over diminishing revenue growth in the coming year.
The German athletic wear titan reported a phenomenal 19% revenue increase at neutral currency rates, totaling 5.97 billion euros ($6.34 billion) for the quarter, outpacing the forecast of 5.72 billion euros predicted by LSEG analysts.
In the fourth quarter, operating profit rose to 57 million euros, a stark contrast to the loss of 377 million euros recorded during the same period last year.
Shares dipped by 2.6% shortly after the market opened on Wednesday.
For the full year, sales climbed 12% at currency-neutral rates, reaching 23.7 billion euros, slightly above the anticipated 23.5 billion euros. Operating profit amounted to 1.34 billion euros, compared to the 1.27 billion euros forecasted.
These figures exceeded the company’s previously raised guidance from October of a 10% revenue growth at currency-neutral rates and operating profit around 1.2 billion euros.
CEO Bjorn Gulden characterized the Wednesday report as “much better than we had anticipated.”
“Although we are not yet where we desire to be in the long run, it was a remarkably successful year that affirmed the adidas brand’s strength, our company’s potential, and the outstanding work our teams have accomplished. Although we have much room for improvement, I am immensely proud of what our people achieved in 2024,” he conveyed in a statement.
Looking ahead to 2025, the company anticipates currency-neutral sales growth in the high single digits and an operating profit increase to between 1.7 billion euros and 1.8 billion euros.
“For 2025, we are positioned very well,” Gulden stated. “While macroeconomic uncertainty looms large, we believe we have trendy products and an agile, localized approach that will drive our success.”
Adidas aims to expand its footprint in North America, particularly as Nike experiences declining sales and retailers shift away from an excess reliance on a weakening Chinese market.
Adidas’ North American sales dropped 1.6% at currency-neutral rates in 2024, hindered by struggles to rebound from the discontinuation of its lucrative Yeezy sneaker line. This shift occurred after terminating its partnership with Ye, formerly known as Kanye West, due to his controversial remarks in 2022.
On Wednesday, the company confirmed it had sold off the last of its Yeezy inventory in the fourth quarter.
Since stepping into the CEO role in January 2023, Gulden has sought to distance Adidas from its unprofitable Yeezy brand, aiming for a broader turnaround of the company.
Analyst Yanmei Tang from Third Bridge noted the phase-out of the Yeezy brand and the lack of significant sporting events as challenges for the year ahead. She emphasized the need for further innovation beyond popular lines like Samba and Gazelle to achieve growth targets.
“While Adidas has recaptured market share in lifestyle footwear, especially with its Terrace line (Samba, Gazelle, and Spezial), the trend may have peaked in critical markets like Europe,” Tang mentioned in her Tuesday note.
“The brand is now pivoting its focus toward new styles like the SL 72 and potentially reviving the Superstar, though these may not fully offset the anticipated slowdown in the Terrace trend,” she added.
Recently, Adidas has been gaining ground against its main competitor, Nike, with its market share rising to 8.9% in 2024 compared to Nike’s 14.1%, as reported by Globaldata referenced by Reuters. However, the arrival of newer brands such as On, Hoka, and New Balance brings heightened competition in the global sportswear landscape, as each of them has been increasing their market share over the past year.
Qualcomm CEO touts groundbreaking modem outperforming Apple: Insights into the ‘huge delta’ in performance
Qualcomm’s CEO, Cristiano Amon, shared insights with CNBC about how its latest modem will set a significant performance gap between itself and Apple, which has just entered the modem market.
Modems are vital components in smartphones, enabling devices to connect to mobile networks. Qualcomm has long been a leading supplier of modems for Apple’s iPhones.
However, in 2019, Apple acquired Intel’s modem operation with ambitions to develop its own modem technology, akin to how it produces its smartphone processors.
After a delay, Apple quietly launched its first modem, named the C1, alongside the debut of the iPhone 16e last month.
In response, Qualcomm unveiled the X85, its newest high-end modem, and during an interview with CNBC, Amon showcased its enhanced performance capabilities, suggesting it would create a notable distance between Qualcomm’s offering and Apple’s.
“It’s the first modem infused with significant AI technology, enhancing its performance range to better handle weaker signals,” Amon told CNBC.
“This advance will result in a stark contrast in performance between premium Android devices and iOS devices, showcasing the superiority of Qualcomm’s technology compared to what Apple is offering.”
The iPhone 16e represents Apple’s budget-friendly option in its latest lineup. Multiple reports indicate Apple is developing modems for its premium iPhones.
Amon reiterated his expectation that Qualcomm would cease modem supplies to Apple by 2027.
Addressing possible technological advancements from Apple’s end, Amon remarked that modem capabilities are crucial for AI applications, and Qualcomm aims to address these needs.
“If modems continue to be relevant, there will always be a role for Qualcomm’s technology,” Amon stated.
“In the AI era, modems will be more critical than ever. I believe this will drive consumer preference for the best possible modem integrated into their everyday devices,” he concluded.
