Wall Street Sentiment Sours After Trump's Assurances On Management of Economy Ring Hollow

Barry Adams
05 Mar, 2025
New York City

Market sentiment on Wall Street reflected the White House-induced chaos and ongoing federal government policy uncertainty.

The S&P 500 index gained 0.1%, and the Nasdaq Composite decreased 0.1%, as investors held out for a possible compromise in lowering tariffs on goods shipped from Canada and Mexico. 

The U.S. tariff uncertainty has already pushed investors to lower earnings expectations in 2025, and the Federal Reserve may delay its expected rate cuts later in the year or may never happen. 

Target, Best Buy, and other leading companies are planning price hikes as early as this week, reflecting higher tariffs on goods arriving from China and Mexico. 

Prices of tomatoes, avocados, and fruits are also expected to jump higher after Mexican goods face a 25% tariff starting March 4.

Automobile companies are looking to pass on higher tariffs to consumers, and many carmakers are looking to raise prices by as much as 25%.

On the campaign trail, Donald Trump promised to lower prices, kill inflation, and simplify the regulatory regime for businesses; instead, consumers are paying higher prices at the gas stations and grocery stores, and businesses are lost in the new uncertainty of the tariff regime.

 

Commodities, Currencies, Indexes, Yields

The S&P 500 index increased 0.1% to 5,785.68, the Nasdaq Composite edged down 0.01% to 18,23.34, and the Russell 2000 index was down 0.1% to 2,077.02.

The yield on 2-year Treasury notes edged lower to 3.92%, 10-year Treasury notes decreased to 4.21%, and 30-year Treasury bonds declined to 4.52%.

WTI crude oil decreased $1.72 to $66.53 a barrel, and natural gas prices edged lower by $0.04 to $4.31 a thermal unit.

Gold increased by $10.93 to 2,903.41 an ounce, and silver edged up by $0.14 to $32.06.

The dollar index, which weighs the US currency against a basket of foreign currencies, decreased 0.98 to 104.76 and traded at a two-year high.

 

U.S. Stock Movers

AeroVironment Inc. plunged 22% to $110.0 after the advanced robotics company reported weak 2024 results, and the company guided weak sales outlook.

Revenue declined to $139.75 million from $155.92 million, net income swung to a loss of $1.75 million from a profit of $13.88 million, and net loss per diluted share was 6 cents compared to a profit of 50 cents a year ago.

The company guided for fiscal 2025 revenue between $780 million and $795 million, compared to $716.7 million a year ago, and non-GAAP earnings per diluted share between $2.92 and $3.13, compared to 43 cents in 2024.

Ross Stores increased 1.1% to $135.40, and the off-price clothes retailer reported better-than-expected earnings in the holiday-driven fourth quarter. 

Abercrombie & Fitch decreased 10.2% to $85.83, and the specialty apparel retailer's fourth quarter results surpassed market expectations, but current quarter estimates fell short of market expectations. 

The company guided revenue in the fiscal first quarter to increase between 4% and 6% and earnings per share between $1.25 and $1.45.

Full-year 2024 revenue increased 16% to $4.95 billion, driven by a 17% rise in comparable store sales. 

The company also announced a new stock repurchase plan of $1.3 billion and plans to purchase $400 million of shares in 2025.