Markets soar after Trump walks back tariffs

If ever there was a week for the history books, this was it.

Having set out a raft of half-baked trade tariffs on 60-odd nations last week, sending stocks, Treasury bonds and the dollar into a tailspin, President Trump promptly went back on his word on 9 April and suspended most tariffs for 90 days with the exception of those on China, which were hiked to a demand-crushing 125%.

In a remarkable about-face, just hours after the levies kicked in, Trump announced on his own social media platform he was instigating a universal ‘lowered reciprocal tariff’ of 10% on countries which had not retaliated against his raised import duties.

Cue the third-biggest one-day points gain in the history of US markets, with crowd favourites such as AMD (AMD:NASDAQ), Broadcom (AVGO:NASDAQ), Nvidia (NVDA:NASDAQ) and (TSLA:NASDAQ) all posting double-digit advances.

Shares in Apple (AAPL:NASDAQ), beloved of Warren Buffett but seen as a major casualty of the new tariff regime, enjoyed their biggest one-day rise since 1998.

A day later, however, even with the benefit of a softer-than-expected inflation print, investors were back in ‘Sell’ mode as concerns mounted over the impact of stop-start tariffs on the US economy.

CarMax

Shares in CarMax (KMX:NYSE) crashed 15% to $68.4 after America’s largest used-car retailer delivered a fourth quarter earnings miss and delayed its long-term growth targets.

Fourth-quarter earnings of $0.58 came in light of consensus, although revenue of $6 billon was up 6.7% year-on-year and a smidge above the $5.93 billion Wall Street was expecting.

Steered by chief executive Bill Nash, CarMax suspended the timelines for its previously-announced long-term targets citing ‘the potential impact of broader macro factors’.

During the final quarter, CarMax sold a total of 301,811 used vehicles, including 182,655 retail units and 119,156 wholesale units, with both figures missing consensus.

Despite the difficult market backdrop, Nash insisted CarMax’s staff, stores, technology and digital capabilities were ‘all seamlessly tied together’ enabling his charge to provide ‘the most customer-centric car buying and selling experience’.

‘This is a key differentiator that gives us the right to win and access to the largest total addressable market in the used car space, providing a strong runway for future growth,’ boasted Nash.

Delta Air Lines

A month after cutting its first-quarter outlook, US carrier Delta Air Lines (DAL:NYSE) warned second-quarter profit would also be below consensus amid stalling travel demand and pulled its full-year guidance.

Chief executive Ed Bastian told CNBC: ‘In the last six weeks, we’ve seen a corresponding reduction in broad consumer confidence and corporate confidence.’

Consequently, the US’s most profitable airline has deferred aircraft deliveries from Airbus (AIR:EPA), which faces tariffs and plans to cut capacity by 3% to 4% in the second half.

‘In this slower-growth environment, we are protecting margins and cash flow by focusing on what we can control,’ explained Bastian.

Second-quarter earnings per share ending June are now expected to be between $1.70 and $2.30, undershooting the consensus estimate of $2.30, while revenue is expected to flatline.

The revised update represents a big reversal from the start of the year when the company had forecast record profit for the year. The shares are down by around a third year-to-date.

UnitedHealth

Shares in health care provider UnitedHealth (UNH:NYSE) gained more than 10% this week after the Centre for Medicare & Medicaid Services (CMS) proposed an additional $25 billion in funding to all US health insurers.

The 5% average increase in the government's reimbursement rates for Medicare Advantage plans in 2026 was higher than the 2.2% initially proposed in January and could help lift margins in the sector after a post-pandemic surge in demand for medical procedures drove up costs.

Analysts at Baird Research said the increase in rates, which they called a "best-case scenario", along with rising tariff risk could make health insurance stocks a strong relative safe haven in a choppy market.

UnitedHealth is one of the largest private health insurers and provides medical benefits to around 51 million members globally, including one million outside the US (as of December 2024).

Julie Utterback, senior equity analyst at Morningstar commented that ‘vertically-integrated organisations like UnitedHealth have the opportunity to help bend the healthcare cost curve in the US,’ although ‘questions continue to swirl around whether managed care organisations’ pursuit of profits outweighs those broader benefits for the US health system’.