Breakfast News: Trump Defends Tariffs
March 5, 2025
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Tuesday's Markets |
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| Dow 42,521 (-1.55%) |
| Bitcoin $87,298 (+1.3%) |
Source: Image created by JesterAI.
1. President Acknowledges Economic Pain
In his address to a joint session of Congress last night, President Trump acknowledged some likely economic discomfort for Americans as a result of tariffs, but only sees it as a short-term problem, saying "Tariffs are about making America rich again ... and it will happen rather quickly. There'll be a little disturbance, but we're OK with that. It won't be much."
- The S&P 500 closed 5.6% down from last month's all-time high: The stock market has suffered its biggest two-day slump since December, giving up all its gains since November's election, as the sweeping tariffs have heightened worries about the U.S. economy.
- Meeting Canada and Mexico halfway?: Commerce Secretary Howard Lutnick said Trump might offer a way to reduce tariffs on the two neighbors as early as today. Index futures rose in after-market trading in response.
2. Chip Maker Pain, Oil and Gas Gain
President Trump urged Congress to kill 2022's law to give $52.7 billion in subsidies to semiconductor manufacturers. Government grants under the Biden administration persuaded global chip makers to locate factories in the U.S.
- "CHIPS Act is a horrible, horrible thing": The president said the money spent should be used to reduce debt. New York Governor Kathy Hochul countered, saying it's the reason Micron (MU 0.14%) "is bringing $100 billion and 50,000 jobs to Central New York."
- "More liquid gold under our feet than any nation on earth": Trump pledged to boost domestic energy output, while also promising to expand minerals and rare earth production.
3. "Please Don't Break Up Google"
A Reuters report claims Alphabet's (GOOG 5.15%) Google met with Trump officials last week, to urge the government to rethink its approach to two antitrust cases being pursued by the Department of Justice.
- Targeting market dominance: Google fears it might have to sell its Chrome Web browser, and end agreements with companies including Apple (AAPL 0.05%) regarding search engine defaults.
- Bad for the U.S.: A Google spokesperson claimed these remedies "would harm the American economy and national security."
4. Qualcomm Ups the Modem Game
Qualcomm (QCOM 0.76%) has announced its newest high-end modem, the X85. The company says it will provide significantly better performance than Apple's new modem, the C1, launched last month with the iPhone 16e.
- "It's the first modem that has so much AI": CEO Cristiano Amon told CNBC that AI demands will make modems "more important than they have ever been."
- Apple independence: Apple's in-house modem development aims to reduce its reliance on other developers, and it could stop using Qualcomm modems by 2027.
5. Next Up: Fourth-Quarter Earnings
Marvell Technology (MRVL 0.91%) will post fourth-quarter results after today's closing bell. In Q3, the semiconductor designer beat revenue and earnings estimates. Data center revenue soared 98% from the previous year. We should look for more of the same this time, spurred by rising AI demand. Restructuring and cost initiatives could be a concern.
- "2025: The year to become Quantum-Ready": A Microsoft (MSFT -0.23%) blog post in January gave quantum researcher Rigetti Computing (RGTI -1.68%) a boost. A Q4 update is due after today's market close, as the company could be a benefactor from Amazon's (AMZN -0.45%) new quantum chip.
- Up 595% in five years: Abercrombie & Fitch (ANF -3.29%) will post a Q4 update before the opening bell, after beating earnings expectations in the previous four quarters. As competitors in the clothing business report upbeat results, analysts expect a 19% year-over-year earnings rise, with revenue up 4.7%.
6. Foolish Fun
Abercrombie & Fitch has seen a dramatic turnaround in the last couple of years, having kept faith with CEO Fran Horowitz. Can you name a public company going through a sticky period whose leadership you trust to turn fortunes around? Discuss why with friends and family, or become a member to hear what your fellow Fools are saying.
