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Correction Mode: Stocks Sink On Trump 2.0 Uncertainty
Stocks ended today’s session in a fashion best described as not great, Bob.
The S&P 500 slumped into correction territory, now more than 10% below its February 19 high, while the Nasdaq and Russell 2000 extended their own losing streaks.
All three are on track for their fourth straight weekly drop, and six downers in the past seven weeks. If these indices were prizefighters, the ref would be stepping in.
Level Change 3/13/25 (%)
– – – – – – – – – – – – – – –
-1.3 Dow
-2.0 Nasdaq
-1.9 Nasdaq 100
-1.4 S&P 500
-1.6 S&P 400
-1.7 S&P 600
Yesterday’s feeble bounce attempt barely registered, and stocks found no love today even after another cooler-than-expected core inflation print.
It’ll take more than a whiff of disinflation to calm investors bracing for more Trumpian economic chaos. Trade worries are parked center stage as the commander-in-chief threatened a 200% tariff on EU wines and other alcoholic imports unless the bloc scraps its tariff on American whiskey. A shot across the bow? More like an entire case.
Treasury Secretary Bessent, keeping with the administration’s new laissez-faire attitude toward market meltdowns, assured the world he wasn’t concerned about volatility. The market, in turn, assured him it wasn’t concerned about his assurances.
On Capitol Hill, shutdown fears made a cameo, with the usual funding brinkmanship back in full swing. Senate Majority Leader Schumer declared Senate Democrats would not support the House’s continuing resolution, adding full paralysis to the growing list of anxieties. For now, expectations of a government closure remain muted.
Earnings did little to lift spirits. American Eagle Outfitters (AEO) slumped 4.1%, underscoring consumer spending concerns, while UiPath (PATH) plunged 15.7% to an all-time low after issuing bleak guidance. The culprit? Almost needless to say: Trump administration spending cuts and changing economic conditions.
Through it all, algorithmic traders kept hitting “sell” like it was a broken elevator button, liquidity was scarcer than a decent sequel, and technical support levels gave way faster than a Jenga tower at a toddler’s birthday party.
At least the economic calendar delivered some pleasant surprises: Producer Price Index (PPI) data came in softer than expected, with core PPI down 0.1% month-over-month. Weekly jobless claims were a smidge below consensus, but little changed from last week.
Elsewhere, Trump met with Republican senators to strategize on another multi-trillion-dollar tax cut package, because, at this point, why not?
Adobe (ADBE) cratered 13.9% despite solid results and reaffirming guidance. Investors fixated instead on its AI plans, now about as welcome as a screen-free iPhone but sure to pay off down the road.
Intel (INTC), on the other hand, pulled off a 14.6% moonshot after naming Lip-Bu Tan as its next CEO. Tan bet on semiconductors back when everyone else chased software, built a venture capital empire at Walden International, and turned Cadence Design Systems into a $65B juggernaut in chip design software.
And so, the market lurches toward another week of losses, balancing policy uncertainty, trade wars, and the possibility that this all ends with another fiscal finance-killing tax cut. Somewhere, Mark Twain is smirking at the rerun.
— Jason Kelly
The Kelly Letter isn’t smirking, but preparing to put these low prices to work. Click here to learn more.
