WSJ What’s News - U.S. Stocks Bounce Back on Hopes of Trade War De-Escalation

Episode Date: April 22, 2025

P.M. Edition for April 22. Major U.S. indexes rose 2.5% or more today as the Trump administration offers fresh hope for de-escalation of the president’s trade war. Plus, Tesla’s net income fell more than 70% in the first quarter as the company struggled with competitive pressure and Elon Musk’s polarizing role. And the International Monetary Fund expects slower growth for the global economy. Economics editor Paul Hannon joins to discuss why the IMF predicts that the U.S. is expected to be hit particularly hard. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Okay, Martin, let's try one. Remember, big. You got it. The Ford It's a Big Deal event is on. How's that? Uh, a little bigger. The Ford It's a Big Deal event. Nice. Now the offer? Lease a 2025 Escape Active all-wheel drive from 198 bi-weekly at 1.99% APR for 36 months with $27.55 down. Wow, that's like $99 a week.

Yeah, it's a big deal. The Ford It's a Big Deal event. Visit your Toronto area Ford store or Ford.ca today. US stocks bounce back, lifted by optimism from the White House on tariff negotiations. Plus, dealmakers struggle to make sense of Trump's antitrust policy. And the International Monetary Fund anticipates that global economic growth will slow, with the U.S. hit particularly hard. Their problem is to do with protecting businesses in such a way that everybody gets a little bit kind of lazy and complacent. And that dynamism that the U.S. economy in particular is renowned for ebbs away, maybe slowly, maybe very quickly. It's Tuesday, April 22nd. I'm Alex Osala for The Wall Street Journal.

This is the PM edition of What's News, the top headlines and business stories that move the world today. US shares rebounded today, with big tech stocks regaining some of the ground they lost yesterday. Traders were cheered by optimism from the White House on tariff negotiations. According to people familiar with the matter, Treasury Secretary Scott Besant said at an investor summit that he expects the trade war with China to de-escalate and believes a deal can be reached. The bounce back came despite fresh fallout from the Trump administration's tariffs. Defense contractors were among the biggest losers in the S&P 500 today, after several of the industry's biggest names reported results.

Aerospace and Defense Specialist RTX said it expects to take an $850 million hit to operating profit from tariffs this year, without factoring in the higher reciprocal tariffs that the Trump administration has put on pause. Northrop Grumman slashed its full-year profit outlook, while Lockheed Martin kept guidance steady. The Dow rose more than 1,000 points, or 2.7%. The S&P 500 was up 2.5%. And the Nasdaq closed 2.7% higher. Gold retreated after surging earlier today to a new record high above $3,500 a troy ounce.

And reporting after markets closed, Tesla saw its net income slide 71% in the first quarter as the company struggled to overcome competitive pressure overseas and a reputational hit from CEO Elon Musk's polarizing role in the Trump administration. Tesla revenue fell also in the first quarter following a steep decline in automotive sales, including double-digit percentage drops in key markets including the U.S., China, and Germany. Tesla reported about $19 billion in revenue for the quarter, down 9% compared to the same period last year. It's been a slow period for mergers and acquisitions. According to data from the London Stock Exchange Group or LSAG, February marked the first time in 25 months that no deal valued over $10 billion

was announced globally. And April's been quiet, too. Some of that reticence is due to economic uncertainty from President Trump's tariff war and his threats to fire Federal Reserve Chair Jerome Powell. But dealmakers say uncertainty about approvals will persist even if the market calms down as they struggle to make sense of Trump's antitrust policy. Lead deals reporter Lauren Thomas joins me now. Lauren, what are some signs that are giving dealmakers some hope here?

When the Biden administration turned over, you had one individual in particular, Lena Cohn, was kind of notoriously against monopolies and really the idea of M&A in general. And so with her moving on, there was this celebration across Wall Street and in particular down in DC, an expectation that concerns around antitrust were going to lighten up and that there would be a wave of M&A under Trump. And of course, this hasn't materialized. going to lighten up and that there would be a wave of M&A under Trump.

And of course, this hasn't materialized. What's giving people hope though is now we have these new faces both in the FTC and the DOJ and the FTC you have Andrew Ferguson, the chair of that organization. And then in the DOJ, the head of the antitrust division, Gail Slater, has lawyers and bankers and companies are getting to know these individuals better, there's more clarity around just what they're thinking and how they're going to look at deals. It's kind of like time heals all wounds.

So we haven't had many deals yet to really be a test case. There's still some question marks. Generally, yes, you'd see a lull at the start of a new administration, but once you get a couple months into it, everyone's more comfortable with Ferguson and Slater, for example. You know, there haven't been as many big deals this year as you mentioned, but there have been a few. One of the big ones was Capital One acquiring Discover for $35 billion. That got the go-ahead from regulators.

But there's one deal that's expected to provide a bit of a litmus test with regulators, right? And that's Google's acquisition of Wizz for $32 billion. So that happened in March and it's still awaiting clearance from regulators. What are deal makers looking to learn here? What's so interesting, of course, about that deal is just in and of itself, it's a tech deal.

And Big Tech, Ferguson himself and Slater too, like everyone's always looking at Big Tech and they are more under the spotlight than other industries. And so that will certainly test just the appetite in general for a big tech deal. Alphabet is already facing its own challenges elsewhere and then it goes and does a deal. What's interesting about that deal,

of course the company tried to frame it as, this is not us like buying another business where're going to just take more market share. And so it tried to frame the deal as something that's good for national security, just in general here in the U.S. So it'll be interesting to see that one. But yeah, we just, we haven't had as many big deals to really put some of these new folks like Ferguson and Slater to the test. That was Lead Deals reporter Lauren Thomas. Thanks so much, Lauren.

Thank you. Coming up, the IMF forecasts a global economic slowdown with the U.S. impacted significantly in the wake of President Trump's tariffs. That's after the break. Unwrap the early days of your favorite hockey stars with Tim's new Retrospective Rookies hockey cards featuring exclusive NHL and PWHL players and retired legends. Collect them all only at Tim's, at participating restaurants in Canada for a limited time. The sharp rise in tariffs since the start of the year marks the onset of a new era that

will see most economies grow more slowly than previously expected. In its quarterly outlook on the world economy out today, the International Monetary Fund projected the global economy to grow 2.8% this year, down from 3.3%. According to the IMF, the U.S. is forecast to suffer one of the largest hits to its prospects, with growth in 2025 now expected to be 1.8%, down from a January forecast of 2.7%, and with the inflation rate expected to be one percentage point higher than anticipated this year.

These forecasts are based on tariffs announced through April 2nd, before the 90-day pause that President Trump announced. For more, I'm joined by economics editor Paul Hannan. Paul, why is the IMF expecting the U.S. to be hit particularly hard? Well, there are two things going on. One is the tariffs themselves, they make imports more expensive. So for a lot of businesses, it's just going to become more costly to produce the stuff that they produce,

and then it will become more difficult for them to find buyers. And then there's a kind of more general feeling of uncertainty about where exactly the US is going this year. And when businesses see a lot of uncertainty, what they tend to do is sort of freeze or pause decisions to invest or hire people. This sense of not really knowing how things are going to roll out in the next sort of nine months or so. The Trump administration has said that higher tariffs will ultimately benefit the U.S. economy since they'll help bring back manufacturing.

Does the IMF see globalization as an issue? They acknowledge that a lot of people feel pretty bad about the loss of factory jobs, but they argue that this is more to do with technological change, automation, the introduction of robots. And so the IMF's argument is that if it isn't globalization that's causing this problem, then tariffs really aren't something that are going to fix it. That this is just a consequence of economies growing more sophisticated over time. And you have to bear in mind that we've got artificial intelligence to deal with in the coming decade. What is the IMF's longer-term outlook beyond this year? That really depends on whether they're right about this being the start of a new era.

That's one of the claims they made today that we're seeing the end of something that lasted for eight decades. Barriers to moving things across borders were getting lower and lower, and it was easier and easier. If it turns out that we're now heading in the other direction and we've either just reached that level very quickly or there's more to come, then their outlook is not great. That was economics editor Paul Hannan. Thank you, Paul. Thanks very much. Someone else who's keeping a careful eye on the economic future? Young women. They're already starting to recession-proof their lives, making small changes to their lifestyles to bulk up their savings. Ann Marie Alcantara, who covers internet culture for the Wall Street Journal, told our Your Money Briefing podcast

about what American women are doing to save a little green. One big theme across almost every single person I spoke to included not eating out as much anymore, or even when you're grocery shopping, cutting back on little treats like a pint of ice cream and things like that. Just anything where they can cut back in a way that feels okay. You know, it's not a big sacrifice, but definitely helps their wallet. Manicures, I spoke to one woman who thought about going back to being a brunette after being a blonde because it's really expensive to get highlights. Some are cutting out those subscriptions, like Amazon Prime, Netflix.

Another woman mentioned she's not doing sober Ubers anymore, so anytime she can take the subway, she's doing that versus spending money on an Uber. So it's all sorts of these quote unquote little luxuries that we have in our lives that people are cutting back on. For more from Anne-Marie, listen to tomorrow's episode of Your Money Briefing.

When it comes to personal information, humans may forget, but the internet remembers. If you don't believe me, check out Google's updated Results About You tool. WSJ personal tech columnist Nicole Nguyen used it, and as she told our tech news briefing podcast, she was surprised to find a trove of her personal information on the internet, even when she'd already asked for it to be deleted. You feel a little uneasy. A home address is something that we think of as private because it's where our physical presence is. But in fact, it's data that appears in hundreds, if not thousands, of databases because every time we shop online, we input our address.

It's a part of public record. If you own a home, if you have applied for a driver's license or subscribe to a magazine, this information is out there. And these websites, people search sites or data brokers can purchase this information from a variety of sources or request it from the government. And they collate it in this dossier that includes other information including your birthdate maybe, one site included my grandma's name that I found from the Google's results about you tool. There's a lot of our data out there. To hear more from Nicole and what you can do to remove that information about you, listen

to today's episode of Tech News Briefing. And that's what's news for this Tuesday afternoon. Today's show is produced by Pierre Bienaume and Anthony Bansi with supervising producer Michael Kosmidis. I'm Alex Osolo for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.