The Rundown - House Passes Trump-Backed Budget Bill, Apple Shareholders Vote to Keep Diversity Policies

Episode Date: February 26, 2025

Stock market update for February 26, 2025. Follow us on Instagram @TheRundownDaily

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Wednesday, February 26. In today's episode, we preview Nvidia's earnings tonight and why it might be the most important earnings report ever. We also tell you about the latest budget passed by the U.S. House and Apple's latest move that has Trump kind of upset. Then stick around to the end of the show to find out what a golden card is,

and why Trump thinks it can help pay down the U.S. deficit. All right, let's go. Tuesday was another down day for the stock market, at least on the surface. The S&P 500 had its fourth red day in a row, dropping more than 0.5%, and the NASDAQ lost more than 1.3%. Now, despite the red day for the S&P, nearly 300 of the 500 stocks in the S&P 500 finished higher yesterday. It's just that the index was dragged down by the B&RQ. bad performance of big tech stocks, especially Tesla, which dropped more than 8% yesterday. Tesla's market cap is now under $1 trillion. The stock has lost more than 20% of its value

since the start of the year. Chip stocks also got hit hard yesterday. Invita, AMD, and Intel lost between 3 to 5% as the rumors started swirling of more chip export restrictions to China from the Trump administration. I talk more about the chip ban on yesterday's show and the potential impact that it could have on Nvidia's business, so go check that out if you missed it. Now, speaking of Nvidia, all eyes are going to be on Nvidia today because the company is reporting earnings today after the market close. And I'm not going to lie to you guys, I'm a little nervous. I feel like some of the sizzle is starting to come out from the AI rally. So it's going to be really interesting to see what Nvidia says, and not just the numbers that they report, but also what they forecast for their business moving forward.

If there is any hint of a slowdown, tomorrow could get pretty rough in the markets. So we're going to be watching Nvidia earnings tonight and breaking it all down on tomorrow's show. so make sure you're subscribed to the podcast so you don't miss it. It just feels like the weight of the stock market rests on invidious shoulders again. Let's run through some headlines. The U.S. House of Representatives has passed a budget blueprint that paves the way to cut taxes and spending by trillions of dollars. The bill that was passed proposes $4.5 trillion in tax cuts,

about $2 trillion in spending cuts that target programs like Medicaid, food stamps, and education funding. In turn, the agenda would shift about $300 billion in increased spending on defense and border protection. Now, the committee for a responsible federal budget says this new measure would add nearly $3 trillion to the deficit by 2034. But yet, the bill still passed, by a really slim margin, by the way, the only Republican to vote against it was Kentucky Representative Thomas Massey, who says this budget would add $20 trillion to the U.S. debt over 10 years. All Democrats oppose the budget arguing the plan benefits to wealthy at the expense of low-income Americans. Now, this bill is just a first step in officially getting signed into law.

The next phase is for the Senate to vote on it, where there's going to be many intense negotiations and all the fine print detail. The Senate is looking to avoid heavy cuts to Medicaid that the House is leaning on while also calling for a permanent extension to the Trump's 2017 tax cuts. So a lot has to be hashed out here, a lot of negotiations still left over at Capitol Hill. Now, sticking with politics for a little bit, let's talk about DEI, because corporate America has started to change their DEI initiatives since President Trump returned to the White House, because, you know, he's not a big fan of the policies.

But one company that doesn't plan to make any changes is Apple. In the recent investors meeting, Apple's DEI program was put to a shareholder vote, and 97% of Apple's shareholders voted against removing Apple's DEI program. And that's way different from other companies in corporate America, everyone from big banks to big tech that have scrapped their DEI initiatives recently. In fact, Bank of America announced on Tuesday this week they're no longer going to have goals for diversity and inclusion. City Group also made a similar announcement last week and big tech companies like Google and meta have also announced plans to drop DEI programs. Now, one reason these companies might be dropping their DEI programs

is just to comply with the law. Trump signed an executive order that bans diversity effort goals at federal contractors and a ton of these companies work with the U.S. government. And I think more importantly, these companies and the executives at these companies, don't want to be a target of one of Trump's early morning truth social posts and then have to deal with a fallout that comes from that. And that's why I think Apple keeping their DEI initiatives is noteworthy. Because, you know, Apple CEO Tim Cook has a pretty cordial relationship with President Trump. In fact, earlier this week, Trump thanked Tim Cook on Truth Social after Apple announced plans to invest $500 billion to build manufacturing facilities in the U.S.

So I wonder if Trump's going to change his tone towards Apple now. Well, this is a interesting timing. Literally, as I'm recording this, Trump posted on truth social that he wants Apple to get rid of DEI. So I guess that didn't take long. I wonder how Tim Cook's going to respond to that. Let's talk about some stocks making moves today. Shares of super micro are skyrocketing this morning after the AI company finally reported its delayed earnings. The company's accounting auditor said its fiscal 2024 earnings were in line with standards and the report show, the revenues more than doubled. So that was a side of relief for super micro investors because remember the company has been dealing with accounting issues for months now. They got called out by the

short seller Hindenberg research last summer. Their previous auditor even quit, but it looks like everything is okay. And these updated accounting reports will save Super Micro from being delisted from the NASDAQ. And that's why shares of Super Micro are up more than 20% this morning on this news. They're having a pretty good morning. It's also a GM for GM. Shares of General Motors, are rising this morning after the company announced a 25% increase to its dividend and a $6 billion share repurchase program. Dividends will be brought up to 15 cents per share and $2 billion of share buybacks are expected for Q2. I'm pretty surprised by this move. I'm not going to lie. I wasn't expecting GM to start dishing out more dividends and doing share buybacks when they're dealing

with the threat of tariffs to Mexico and Canada, which could have a substantial impact on their business. Not to mention their net income dropped by more than 40% last year. I mean, yes, the revenues were up 9%, but they still got a lot of things to figure out. I guess GM is just trying to keep shareholders happy for now, and that seems to be working because shares of GM are up more than 4% today on this news. Now, on the flip side, Instacart shareholders are not having a good day because its parent company Maple Bear reported disappointing revenues for last quarter. To make matters worse, the company also projected underwhelming earnings for the current

quarter. As a result, shares are down more than 10% this morning in reaction to these earnings. I mean, this is a stark contrast to what DoorDash reported a couple weeks ago. They had a strong earnings outlook because DoorDash is moving beyond just food and starting to get into grocery delivery as well. And I guess that increased competition could be eating into Instacart's business. We actually did a deep dive episode on DoorDash and their rivalry with Uber Eats this past weekend. So go check that out if you missed it. I think some of you guys might be surprised with how dominant DoorDash is.

Let's wrap the show with the fun fact. Trump is launching a gold card immigration plan, which allows wealthy foreigners to get a passive. the U.S. residency and citizenship with a $5 million investment to the U.S. government. Trump is planning to launch this offering in two weeks, even though Congress still hasn't weighed in on this plan. Trump says he doesn't think this plan needs lawmaker approval. The administration believes a gold card plan should replace the current EB-5 program, which allows foreigners to get access to a green card after investing a certain amount of money into a U.S. business.

The gold card program would have the money go directly to the U.S. government, and I guess that could help pay down the U.S. deficit. I think my main question is, are they actually going to hand out golden cards to people who get access to this new program? I mean, gold is expensive these days, right? Prices are hitting all time highs. Well, all right, guys, that's the rundown for today. Thank you guys so much for listening. We are going to have a big show tomorrow, recapping in video earnings and the reaction of the overall markets to those earnings.

And we're going to try to do an instant reaction video on Instagram tonight as well. So make sure you're following our Instagram account as well. We'll put the link in the description. Thank you guys so much for listening. Shout out to Mike and Connor for all the help behind the scenes. We'll see you guys back here tomorrow. This is the rundown,

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