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With stocks seemingly set for a fifth-straight day of volatility since President Trump’s Rose Garden tariff announcement, we had a quick chat with Steve Sosnick, chief strategist at Interactive Brokers, about what, if anything, could quell the sell-off.

Describing the Trump tariffs as a “bombshell,” Sosnick said it’s difficult to find a good historical analogy for the shock of Trump’s proposition to return US trade barriers to levels that some experts say were last seen before World War I.

The issue, at its core, is that the tariffs seem to be simultaneously inflationary — likely to raise the price of goods Americans buy — and recessionary, as the disruptions and sharp increase in what are effectively import taxes are expected to drive down economic activity, prompt corporations to delay or abandon investment projects, and raise unemployment.

“In some ways Covid fits the bill, in the sense that we got this huge exogenous shock that rippled through the system very quickly,” Sosnick said, adding that there are also big differences that matter a lot to the markets.

His thoughts are worth quoting in full, with some edits for clarity and concision.

“The reason that markets did very well, even with the disruptions that were caused by Covid, was that the Fed was able to cut rates down to zero and massively expand their balance sheet, while at the same time, there was a huge fiscal response, right? The stimulus checks, among other things.

Neither of those responses is going to happen now, because the federal government is actively trying to shrink. So you’re not going to get fiscal expansion. As a matter of fact, the fiscal side is working in reverse. So that’s not going happen.

The Fed, yes, if things get bad enough, the Fed is likely to change policy, but they’re not going to do it preemptively, because Powell has told us enough times that they don’t know what this is going to do in terms of price and output... he knows it’s likely to raise prices and impede output, but does he want to be cutting rates at the same time that we may be creating a lot of inflation as a result of tariffs?

Until or unless the rest of the economy gets so bad that the Fed is forced to move... the cavalry is not coming to the rescue here.”

So what could credibly stop the pain?

“The market doesn't know where to look for relief,” he said. “Realistically, the only true relief would come from some sort of easing of these tariffs.”

VolkswagenVWAGY $9.55 (2.25%) deliveries grew 1.4% in the first quarter, with growth in nearly every market narrowly making up for a deep decline in China.

VW’s deliveries in China fell 7.1% to 644,100 vehicles. All-electric vehicle deliveries plummeted roughly 37% in the country. The automaker’s struggles in China are nothing new. After four decades at the top of the Chinese market, Europe’s largest automaker was bumped out of its position in 2023 by EV biggie BYDBYDDY $85.03 (2.94%).

North American deliveries grew 4.4%, including a more than 6% bump in the US as customers raced to snag vehicles before the Trump administration’s auto tariffs hike prices. US rivals experienced similar sales surges recently: General MotorsGM $42.11 (-0.87%) saw a 17% Q1 sales spike, while FordF $8.66 (-0.40%) said its dealership sales jumped 19% in March.

Last week, Volkswagen told US dealers it would be adding an “import fee” to cars affected by tariffs. And you can expect plenty of import fees: about 70% of Volkswagen’s US sales were Mexican-made vehicles last year.

JPMorganJPM $215.46 (-0.65%) CEO Jamie Dimon’s degree of economic angst appears to have ratcheted higher from Monday, when he sent a lengthy letter to shareholders.

“Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth,” he wrote.

He provided some detail on how he’d answer that question in an interview with Fox Business on Wednesday morning. A few headlines from the appearance:

*DIMON: ‘PROBABLY’ A RECESSION IS ‘LIKELY OUTCOME’

*DIMON: I EXPECT MORE CREDIT PROBLEMS THAN IN A LONG TIME

*DIMON: NOT SEEING DEFAULTS YET ‘BUT I EXPECT THEM’

*DIMON: PUT SOME HEADCOUNT CONTROLS IN PLACE, NOT FORCING CUTS

The CEO of America’s preeminent bank added that he’s hopeful any recession would be short, and that “fixing these tariff issues and trade issues would be a good thing to do.”

JPMorgan reports earnings on Friday morning before the bell.

It’s time to press bets that Tesla’s stock price, which has already fallen in half from its December peak, will continue to sink. That’s according to JPMorgan analyst Bram Kaplan, who recommends a bearish options wager against the stock based on a mix of fundamental and technical factors.

TeslaTSLA $230.96 (4.10%) tops the list of “attractive 3M 95% put buying candidates” listed in his Tuesday note to clients. The specific recommendation, in this case, is to buy put options that expire in July with a strike price about 5% below its current level at time of publication.

The many struggles that have been contributing to Tesla’s nosedive include:

• An epic delivery miss

• Falling popularity among its core market

• Increased competition from larger automakers

• Oh, and tariffs that will make it way harder to offer the new, cheaper vehicle it’s been promising

Ryan Brinkman, JPMorgan’s analyst covering the company, has a $120 price target and “underperform” rating on the shares, per Bloomberg.

Interestingly, Kaplan also highlights General MillsGIS $56.43 (-0.49%) and Dollar TreeDLTR $70.96 (1.81%), two typically defensive stocks that have meaningfully outperformed the S&P 500 during this drawdown, as attractive put-buying opportunities.

President Trump’s reciprocal tariffs went into effect last night, including ones that would effectively more than double the price of Chinese imports, and the stock market and analysts are angry.

In a note this morning, Wedbush’s Dan Ives threw the analyst equivalent of haymakers, calling the move the “worst US policy mistake since Smoot-Hawley.” He went on to again debunk the idea that tech hardware could realistically be produced in the US since the “hearts and lungs of the supply chain are cemented in Asia.”

“A US tech company CEO cannot decide last night... ‘Let’s call Smith Semi Fab Operations in the Midwest to get those semi chips’... as there is one slight problem... IT DOES NOT EXIST... and would take 4-5 years to build a manufacturing plant... and the labor force does not support this in the US... the IP of the supply chain is cemented in Asia after 30 years of making US tech products... and the products will go up 3x-4x once implemented after years... being paid by the US consumers/companies. In essence, this tariff policy unveiled last week by the Trump Administration has turned the global supply chain upside down and US consumers are the ones paying the tariff/tax... it’s not a debate.”

These remarks are seemingly a direct response to comments made by White House Press Secretary Karoline Leavitt, who was asked if Trump thought Apple’sAAPL $177.80 (3.12%) iPhones could be made in the US, and responded: “Absolutely. He believes we have the labor, we have the workforce, we have the resources to do it.”

For all their big ideas, American tech billionaires Jeff Bezos, Elon Musk, and Mark Zuckerberg spend a lot of time working on the same ideas.

To wit: TechCrunch just reported that AmazonAMZN $173.19 (1.48%) founder Jeff Bezos has been secretly funding an electric vehicle company called Slate Auto, bringing him closer in league with his nemesis, TeslaTSLA $230.96 (4.10%) CEO Elon Musk.

In true comic book fashion, Bezos and Musk also have matching space companies, Blue Origin and SpaceX, respectively.

Both billionaires also have media companies: X, formerly Twitter, for Musk and The Washington Post for Bezos. And Amazon is reportedly making a last-minute play to buy TikTok, which would make Bezos and Musk both leaders of social media companies.

The odd man out here? MetaMETA $511.54 (0.21%) CEO Mark Zuckerberg.

Zuckerberg, like the others, has a social media company. (Everyone’s company, of course, considers itself an AI company.) Earlier this year, to join the club, Zuckerberg began a foray into AI-powered humanoid robots, much like Tesla’s Optimus venture and the everyday robotics happening in Amazon warehouses.

Yet, it’s now apparent that Zuckerberg isn’t like the other guys: he doesn’t have an EV or a space company — yet.

Photo credits: Andrew Harnik (Musk), Taylor Hill (Bezos), and Drew Angerer (Zuckerberg) via Getty Images.

After hiking its odds of a recession for the second time in a week (to 45%) on Monday, Goldman SachsGS $457.24 (-1.08%) on Tuesday lowered its outlook for the US airline industry and slapped American AirlinesAAL $9.38 (3.41%) with a downgrade from “neutral” to “sell.”

American’s shares were down more than 7% in afternoon trading. Its rivals in the big four — United AirlinesUAL $58.86 (4.83%), DeltaDAL $38.75 (8.00%), and SouthwestLUV $25.84 (4.40%) — were all down more than 3%.

Analyst Catherine O’Brien lowered her price targets for American, United, Southwest, JetBlue, and Alaska Air, among others. The price target of Delta, which reports its first-quarter earnings on Wednesday morning, remains unchanged.

Tariffs and their expected effects on travel spending and US tourism have been squeezing airlines, which were already facing pressure from customers’ increased safety concerns. Last month, aviation analytics firm OAG said that US-Canada ticket bookings between April and September were down by up to 76%.

US tariffs are now squeezing Canadian gamers (and those in the US who planned on preordering a Switch 2 to a PO box in Vancouver). After delaying Switch 2 preorders in the US on Friday on account of — you guessed it — tariffs, NintendoNTDOY $16.25 (-0.98%) is now doing the same for early orders in Canada, according to a statement provided to Sherwood News by Nintendo of Canada.

“Pre-orders for Nintendo Switch 2 in Canada will not start on April 9, 2025 in order to align with the timing of pre-orders to be determined in the U.S. Nintendo will provide updated information at a later date. The launch date of June 5, 2025 is unchanged.”

The ability to snag a spot in line for the console is already live in the UK and Japan.

Why Nintendo of Canada must align its preorder date with the US isn’t exactly clear. The delay could be an effort to disincentivize US buyers from making Canadian preorders, or there could be a necessity for Nintendo to iron out its Canadian logistics (i.e. avoid US ports and tariffs).

In an interview with CNBC yesterday, Nintendo of America President Doug Bowser said that the Trump administration’s tariffs were not factored in to the console’s $450 price tag — something that doesn’t exactly bode well for those hoping the gaming juggernaut doesn’t pass tariffs on to consumers through higher prices.

Thanks in large part to ongoing tariff escalations between the US and China, AppleAAPL $177.80 (3.12%) has erased pretty much all of the market cap it built up over the last year. At the end of 2024, Apple was worth nearly $4 trillion. Now, after the White House confirmed 104% tariffs on China, where the vast majority of iPhones are made, Apple’s market cap is about $2.65 trillion, or nearly a trillion and half less than it once was.

AppleAAPL $177.80 (3.12%) hit a new low for the year after news that the US would indeed impose 104% tariffs on China, where the company produces many of its products. Apple had already been reeling from the 54% reciprocal tariffs, which could increase the price of iPhones by hundreds of dollars, before the latest round of retaliatory tariffs.

In a rare bit of good news for Apple, it seems the tariffs have finally pushed consumers to buy new iPhones, if only to avoid higher costs later.

US stocks are falling out of bed, with the S&P 500 completely retracing an advance of 4% on confirmation that an escalating trade war is indeed happening.

White House Press Secretary Karoline Leavitt said the additional 50% tariffs imposed on China following its retaliatory tariffs on the US are going into effect.

Here’s this headline, which is definitely real:

*LEAVITT: US TO IMPOSE 104% TARIFFS ON CHINA TOMORROW: FOX BIZ

A Goldman Sachs basket of US stocks with high exposure to China (ex semiconductors) is in the red and lagging the benchmark US stock index, with the underperformance swelling after that headline hit the wires.

One lesson from Monday’s mayhem — and a factor behind Tuesday’s early gains — is that traders are desperately looking for, and believing in, potential off-ramps from highly disruptive trade levies. The recent price action may serve as a portent of what awaits if the current policy course we’re on stays intact.

If the US does spiral into a self-induced recession, as economists are increasingly predicting, history shows consumer staples may be one of the safest places to invest, according to Bank of America analysts.

Some of the companies it recommends are Zyn maker Philip Morris InternationalPM $147.80 (-0.96%), sugary drink staple Coca-ColaKO $67.73 (-1.01%), and condiment and spice seller McCormickMKC $71.83 (-0.53%). Those industries have outperformed in most recessions, with the exception of COVID-19.

They have also outperformed this year as President Trump’s tariff threats have rattled global markets.