Stocks rally on tariff hopes, China vows to fight: 3 things you need to know
It could be Turnaround Tuesday for stocks after a bruising three-day stretch. Futures on the Dow Jones Industrial Average are jumping, as traders focus on the Trump administration reportedly beginning trade discussions with Japan. The S&P 500 and Nasdaq Composite are also set to open higher. President Trump's broad tariffs are set to kick in tomorrow, with many now seeing them as a negotiating tactic. China, however, vowed today to quote “fight to the end” on the tariff front.Here is what you need to know about the markets today:Levi’s puts investors through the spin cycle: Shares of the jeans maker surged 10% in early trading following better than expected quarterly earnings. The company maintained its full year profit outlook. Walmart is in focus: While Wall Street tries to estimate what tariffs could mean for companies, veteran retail analyst Greg Melich of EvercoreISI is estimating a worst-case scenario of tariffs on Walmart. Melich said, "If 50% incremental [tariffs] on China and 20% rest of the world [tariffs] are maintained, AND no carrots of tax cuts or deregulation are implemented, we estimate the EPS pressure for Walmart of 2% could grow 3x higher." BrIIt could be the year of lost profits for companies due to tariffs: The bottom up consensus earnings per share expectation for the S&P 500 assumes 9.6% growth. Some of the biggest EPS gains are seen in tech darlings Nvidia, Broadcom, Netflix and Microsoft. But long-time strategist Adam Parker at Trivariate Research says investors no longer believe those numbers. Parker thinks the tariffs are such a headwind, investors may see NO earnings growth for the S&P 500.
