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The Delta Dip
Stocks ended lower today after choppy trading. That thud you heard was the S&P flirting with a correction, down 9.3% from its February 19 record close. Breadth was weak, the equal-weight S&P trailed its cap-weighted counterpart by 60 basis points after a day in the sun Monday, and the Nasdaq nursed its worst drop since 2022.
Level Change 3/11/25 (%)
– – – – – – – – – – – – – – –
-1.1 Dow
-0.2 Nasdaq
-0.3 Nasdaq 100
-0.8 S&P 500
-0.5 S&P 400
-0.5 S&P 600
Bulls hoping for an oversold bounce were left holding the bag as traders opted to fade rallies rather than buy dips. A new phase on Wall Street: every uptick feels like a trap, every down day an air pocket.
But the real action happened off trading screens. Enter Donald J. Trump, stage right, with a fresh salvo in his tariff wars. In a Truth Social broadside, he promised sky-high auto tariffs on Canadian imports, predicting they would “essentially, permanently shut down the automobile manufacturing business in Canada.” The Great White North was unimpressed. Ontario Premier Doug Ford fired back with a 25% electricity surcharge on US firms before reversing course. Incoming Prime Minister Mark Carney vowed retaliatory tariffs of “maximum impact.” Trump’s press secretary insisted all this chaos was merely part of an economic “transition” underway. The market seems to agree, transitioning from bad to worse.
The uncertainty is bleeding into business results. Delta Air Lines (DAL -7.3%) plunged after issuing a rare negative preannouncement, blaming a hit to consumer and corporate confidence on — wait for it — macro uncertainty. It was the first major firm to openly pin deteriorating guidance on Washington-induced jitters. The news sent shockwaves through travel stocks, sinking cruise lines, hotels, and Booking Holdings.
Elsewhere, Oracle (ORCL -3.1%) delivered a weak quarter and soft guidance. The company blamed capacity constraints as demand for AI compute “continues to dramatically outstrip supply,” according to CEO Safra Catz. This should eventually become good news as Oracle remains the “destination of choice” for artificial intelligence.
Small businesses are feeling the heat of the Trump transition. The NFIB optimism index slipped to 100.7, as the percentage of owners who believe it’s a good time to expand cratered by five points — the biggest monthly drop in five years. The uncertainty index climbed four points to 104, proving that while optimism is scarce, confusion is abundant.
Some good news: the January JOLTS report came in slightly above expectations at 7.74 million, though December’s figures were revised lower. In this market, good news is ignored, bad news is amplified, and tariffs, it seems, are forever.
— Jason Kelly
You know what else is forever? Kelly Letter price reaction. To learn more, click here.
