The Rundown - Inflation Cools Down More Than Expected, Tesla Rebounds After Trump Shows Support

Episode Date: March 12, 2025

Stock market update for March 12, 2025.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Wednesday, March 12th. In today's episode, we'll recap the tariff drama from yesterday and how the EU is ramping up the trade wars. We also recap the CPI inflation report and why it might not be telling us the full picture. Then stick around to the end of the show to find out why weather men and women are starting to earn seven-figure paychecks from Wall Street. All right, let's go. Tuesday was a wild ride for the stock market,

as we had another day of tariff flip-flops and confusion. Yesterday started off with Trump threatening Canada with additional 25% tariff on steel and aluminum imports, bringing the total tariff to 50%. Those tariffs were supposed to go into effect starting Wednesday morning. Trump said these tariffs were in response to Ontario increasing taxes on electricity going to the U.S. So that set off a back and forth between the two countries all day yesterday. And then guess what?

Both sides agreed to back down. I've seen that movie before. Ontario said they're going to pause any increased taxes on electricity going to the U.S. And Trump says he won't be slapping Canada with an additional 25% tariff on steel and aluminum imports. So that was some good news. The markets tried to rally off that good news. It even got in the green yesterday for a few minutes. But it couldn't sustain that rally and ultimately finish in the red with the red with the markets.

the S&P 500 losing 0.8%, and the NASDAQ dropping 0.2%. The S&P 500 is now within 1% of a correction territory, which is a 10% decline from recent highs. And the NASDAQ has already been in a correction territory, down more than 13% from its highs. It's set in mid-February. Now, if you were looking for a break in the headlines today, too bad, because we got even more tariff drama coming.

While Trump did remove the 25% additional tariffs on Canadian steel and aluminum imports, there is a blanket 25% tariff on all imports of steel and aluminum going into effect today. And that's going to have a big impact on the European Union, which exports a ton of steel to the U.S., and they're ready to retaliate. They announced today they're going to be slapping a 50% tariff on imports of American whiskey, motorcycles, and motorboats going to the EU. Those tariffs will go into effect in April, along with some more.

And don't forget, Trump has promised retaliatory tariffs starting April 2nd. So this trade war continues. Now, we did get some good news this morning, finally. The February CPI report just came out, and numbers weren't so bad. CPI inflation in February was 2.8% compared to a year ago, which is less than the 2.9% that was expected. So that has to be a side of relief for the markets, because if the number came in hotter than expected, our retinas would have been burned from all the red on our screen. Now, inflation is still higher than the Fed's 2% target, and this February CPI report,

doesn't take into account the impact of tariffs because the tariffs are going into effect this month. So while it's great to see that inflation isn't a problem just yet, the next two reports, March and April, are going to be key. Because we'll get a clearer picture to see what impact tariffs are having on prices. So I do wonder how the markets are going to react to this inflation report. Is it a good enough report to where markets start to rally? I'm not so sure. But we could definitely use a nice rally right now because it's been a brutal few weeks.

Let's run through some headlines. TSMC is looking to take over Intel's foundry business, and they're hoping that big names like Nvidia, AMD, and Broadcom might be part of the deal. Reuters reported that these talks are still in the early stages, and any deal for Intel would require approval from the Trump administration. You know, there have been calls for Intel to break up their company for months, probably years now. See, Intel has two main businesses, the chip design business,

which is similar to what Nvidia and AMD do, and they also have a manufacturing business similar to TSM. Intel is unique. They design and manufacture their own chips. But they're not the best at either. Intel's chips aren't as good as AMD or NVIDias and their manufacturing process is nowhere near as good as TSMs. So TSM taking over Intel's manufacturing business to help turn it around would make sense, but the Trump administration doesn't want Intel to be foreign owned. That's why TSM is hoping to make this a joint deal with American partners like Nvidia, AMD, Broadcom, and even Qualcomm. So we'll see if this happens. I mean, something definitely needs to happen with Intel because they're struggling big time right now.

And this has led to some turmoil inside Intel with layoffs and their CEO even getting fired last year. And that's why the stock price has lost half its value over the last 12 months. Intel investors are seeing a glimmer of hope, though their stock is up around 6% today in reaction to this report. Now, sticking with the big tech theme, big tech and big energy companies are joining forces to triple the globe's nuclear capabilities by 20%. Companies like Amazon, Meta, Occidental Petroleum, and Dow Inc. are coming together through the large energy users group during a time when Big Tech is looking to bolster its energy capacity to run artificial intelligence models. Governments have also become interested in nuclear energy again due to its clean energy capabilities, according to Bloomberg. Now, we've talked about this a lot

over the last few months. Big Tech has already been working on deals to set up nuclear infrastructure, but it's going to take some time. Amazon and Dow Incs agreed to a nuclear deal with X energy, but the company won't have a working reactor for years. Last year, Google signed a deal with Caro's power to build small model nuclear reactors that can be built quicker. But still, Caros' first reactor won't hit the floor until 2030. And Microsoft also has a nuclear deal for an energy plant that's set to kick into operation during 2028.

So we're still a couple years out. And while Amazon, Meta, Occidental, and Dow are the first members of the large energy user group, other companies are still expected to join in the near future. So it's definitely a space to watch. Investors and energy companies saw a huge payoff last year with some of the best performing stocks in the S&P 500 being energy and nuclear companies. Let's talk about some stocks making moves today. Tesla shares are on the rise this morning after Donald Trump said he would buy a Tesla to support the company. Yesterday, Trump basically turned the White House into a pop-up Tesla dealership and showed off a few Tesla vehicles while praising the company.

So, yeah, the bromance between Elon and Trump is still going strong. Morgan Stanley also boosted optimism for Tesla as well, calling for a buying opportunity for Tesla shares after the poor start of the year. Tesla's shares have fallen more than 30% in the past month alone, but they're seeing a nice bounce back today up more than 6% this morning. Now, on the flip side, shares of PepsiCo are falling after the soda and snack giant was downgraded by the investment bank Jeffries to a hold rating with a price target of $170.

Jeffrey says that Pepsi's U.S. business is struggling, pointing to the free-to-lay snack business continuing to lag. Free-to-lay business experienced a 2% sales declined and an 11% deterioration in operating profits in Q4. So as a result, PepsiCo's stock is down around 2% this morning on this news. Let's wrap the show with a fun fact. Hedge funds are scrambling to hire weather experts and they're willing to pay up to a million dollars to do it. These non-traditional Wall Street hires are not the people that you see on the weather channel giving you your local seven-day weather forecast. Instead, they're data scientists and meteorologists that would otherwise likely be working in a government or academic job. But hedge funds are recruiting them in waves to help traders

navigate the increasingly volatile commodities market, which is heavily impacted by the weather. Hedge funds hired 23% more weather experts in 2024 than they did the year before, according to the executive search firm Proco Group. And according to this Bloomberg report, paying pay packages between $750,000 all the way up to a million bucks. So shout out to the weathermen and women for getting the bag. Well, all right, guys, that's the rundown for today. It's been another roller coaster of a week. Hope you guys have been enjoying the show.

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