Traders work on the floor of the New York Stock Exchange on March 28, 2025, in New York City.
Spencer Platt | Getty Images
Monday was the last trading day of the quarter. U.S. stocks took a heavy beating during the period: Both the S&P 500 and Nasdaq Composite broke their five-quarter winning streaks and suffered their heaviest three-month losses since 2022. The Nasdaq remains in correction territory.
But it won’t be the last tumult stocks will experience. Reciprocal tariffs on “all countries” will start Wednesday, U.S. President Donald Trump said Sunday. While Trump has described the start of his tariffs as “liberation day,” others aren’t seeing it in quite so glowing terms.
Goldman Sachs, for one, cut its forecast for U.S. economic growth and raised its expectation for the inflation rate in 2025, suggesting the possibility of stagflation. And if not stagflation — recession. The Wall Street giant also slashed its projection for the S&P 500 accordingly.
If the first quarter of the year was bumpy, the second could be much more treacherous.
What you need to know today
Tariffs on ‘all countries’
U.S. President Donald Trump said that his reciprocal tariff will target “all countries” when they are announced Wednesday. He explicitly dismissed suggestions that tariffs will only apply to the “Dirty 15” — a group of countries making up 15% of U.S. trading volume while imposing hefty tariffs on American goods. Goldman Sachs raised its recession probability in the next 12 months to 35% from 20% because of Trump tariffs.
Tariffs will hit Japanese carmakers hard
Shares of Asian automakers have been reeling since Trump’s announcement last Wednesday of sweeping 25% tariffs on cars “not made in the U.S.” Japanese carmakers, in particular, are in dire straits — automobiles were the country’s top export to the U.S. in 2024, based on customs data. Among those firms, Toyota is likely to be the worst hit, given its huge U.S. sales, according an analyst at research firm Frost & Sullivan.
Bloody quarter for U.S. stocks
U.S. markets traded mixed Monday, capping off a dismal first quarter. The S&P 500 rose 0.55%, the Dow Jones Industrial Average increased 1% but the Nasdaq Composite dropped 0.14%. For the quarter, the S&P 500 dropped 4.6%, the Dow lost 1.3% and the Nasdaq tumbled 10.4%. Asia-Pacific stocks rose Tuesday. Australia’s S&P/ASX 200 climbed over 1% as the country’s central bank kept interest rates at 4.1%, in line with expectations. Japan’s Nikkei 225 hovered around the flatline after falling into correction territory the previous day.
OpenAI’s humongous funding round
OpenAI on Monday announced it had closed a $40 billion funding round — the largest private tech funding round on record — which values the ChatGPT maker at $300 billion, including the fresh capital. Japan’s SoftBank is leading the round with $30 billion, and is joined by Microsoft, Altimeter and Thrive. However, funding would decrease to $30 billion if OpenAI doesn’t restructure into a for-profit entity by Dec. 31, CNBC has confirmed.
Is DOGE slashing Tesla monies too?
Tesla’s stock plunged 36% in the first three months of the year, its worst quarter since 2022, when the stock cratered 54%. Tesla’s first-quarter drop wiped out over $460 billion in market cap. CEO Elon Musk acknowledged at a town hall event in Wisconsin, U.S., that his role with the so-called Department of Government Efficiency is creating backlash against Tesla and hurting the stock.
[PRO] Goldman cuts S&P forecast
In addition to lowering its forecast on economic growth, Goldman Sachs also slashed its projection of where it thinks the S&P 500 will be at the end of 2025. It’s the lowest estimate among major Wall Street firms, according to the CNBC Market Strategist Survey.
And finally…
Taiwanese Coast Guard personnel work on a vessel off the coast of Nangan Township, in the Matsu Islands on Oct. 15, 2024, a day after China conducted the “Joint Sword-2024B” military drills around Taiwan.
Daniel Ceng | AFP | Getty Images
China kicks off military drills near Taiwan, warns island’s ‘independence’ means war
China’s military said Tuesday its army, navy and rocket forces launched a joint exercise off the coast of Taiwan, in what it described as a “stern warning” against forces looking to undermine peace in the Taiwan Strait.
The military drills, designed to “close in on Taiwan from multiple directions,” are a “resolute punishment” for the island’s President Lai Ching-te’s administration’s “provocations for independence,” said Zhu Fenglian, a spokesperson for China’s Taiwan Affairs Office of the State Council.
The drills focused on practicing assaults on maritime and ground targets, as well as blockades of key areas and sea lanes to test the joint operation capabilities of its troops, Senior Colonel Shi Yi said in a statement released by the People’s Liberation Army.
