Wall Street Braces for More Pain

FINANCE
Wall Street Braces for More Pain

U.S. stocks are set to extend their steep losses as futures pointed to more market panic over President Trump’s aggressive new tariffs. On Sunday night, Dow futures dropped 1,302 points (3.3%), while S&P 500 and Nasdaq futures fell 3.9% and 4.9% respectively. This follows the worst week for markets since the early days of the COVID-19 pandemic. Oil prices also fell 3.7%, and the 10-year Treasury yield slipped to 3.906%.

Trump’s tariffs, including a baseline 10% rate and higher levies on 57 nations—34% on China, 20% on the EU, and 24% on Japan—could raise the effective rate to 25%, the highest in over a century, according to Fitch Ratings. Former Treasury Secretary Larry Summers warned of more turbulence, calling last week’s $6 trillion selloff the fourth largest two-day loss in 85 years.

Despite the fallout, Trump and top officials signaled they won’t reverse course. Treasury Secretary Bessent said the selloff is short-term and praised market stability. Fed Chair Jerome Powell warned tariffs could worsen inflation, potentially delaying rate cuts. This week, markets await inflation data and earnings from JPMorgan, Wells Fargo, and BlackRock, where executives’ outlooks on tariffs will be closely watched by investors.

FINANCE
Buffett’s Moves Look Brilliant Now

The stock market crash triggered by President Trump’s global tariffs has cast Warren Buffett’s recent investment decisions in a new light, highlighting his foresight during a time of market euphoria. As U.S. stocks lost over $6 trillion in market value since Trump’s “Liberation Day” tariff announcement, Buffett’s move to trim Berkshire Hathaway’s equity exposure appears prescient. In 2024, Berkshire sold $134 billion in stocks, including slashing its Apple holdings by two-thirds before the iPhone maker’s 28% drop. Buffett also shed shares of Bank of America and Citigroup, both now down over 20% this year.

Meanwhile, Berkshire built a record $334 billion cash pile—mostly in short-term Treasury bills—offering both safety and solid returns. As tech and financial stocks crater, Berkshire’s diversified portfolio, with heavy U.S. exposure in insurance, rail, and energy, has outperformed. Berkshire’s Class B shares are up 9% this year, and Buffett’s net worth has grown by $12.7 billion to $155 billion, placing him just behind Bill Gates. As the market reels, many now wonder if Buffett will seize this downturn to make a major acquisition. In his February letter, he hinted at patience but reaffirmed his long-term belief in American equities and high-quality businesses over cash.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.