WSJ What’s News - What’s News in Markets: Banks' Warnings, CarMax Stalls, Delta Shares Fly

Episode Date: April 12, 2025

Why did banks report higher profit but also warn of a recession risk? And how did President Trump’s tariff announcements affect CarMax? Plus, what caused Delta’s shares to rise? Host Francesca Fontana discusses the biggest stock moves of the week and the news that drove them. Sign up for the WSJ's free Markets A.M. newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Thursday, May 8th is McHappy Day. When every menu item purchased at McDonald's helps support families with sick children. So you can feel the good that comes from doing good, just from ordering. So if I order a Big Mac, I'm helping. Yup. What about a McFlurry?

10 piece chicken McNuggets and apple pie? You got it. Every single order helps. Join us at McDonald's for McHappy Day on Thursday, May 8th. Do good, feel good. A portion of food and beverage sales will support RMHC chapters Hey, listeners. It's Saturday, April 12th. I'm Francesca Fontana for the Wall Street Journal and this is What's News in Market, our look at the biggest stock moves of the week and the news that drove them. Let's get to it. So what to talk about this week?

I mean, it was so slow, there was no big news. I'm fully kidding. This week, like last week, was full of trade turmoil and giant market swings. Really, we can divide it into before Wednesday and after Wednesday, aka before and after Trump's big about face on a bunch of the latest tariffs. So before Wednesday, the market was digesting all of the latest threats of retaliation from China in response to Trump's tariffs, as well as big Wall Street players weighing in and voicing their concerns like JP Morgan's Jamie Dimon and Black Rock's Larry Fink. In contrast, Trump told everyone to quote, be cool, via Truth Social, but clearly things

in the market were not cool. And then there was Wednesday. Trump interrupted the day's sell-off and announced the 90-day pause on certain tariffs to most countries, also via Truth Social, and we got a big old rally and the three major indexes notched some records. Now, after Wednesday. Thursday, stocks were falling again, despite the good news from the previous day.

For one, the White House said that the China tariffs added up to 145%, not the 125% it had indicated the day before. And then we got one last twist. On Friday, stocks were back to rallying to close out the wild ride. On a weekly basis, the Dow gained about 5 percent, the S&P 500 gained more than 5 percent, and the Nasdaq climbed more than 7 percent. In terms of individual movers, let's start with Delta Airlines. Delta predicted that 2025 would be its best financial year ever. But that view has gotten pretty cloudy. The

airline on Wednesday ditched its full-year financial outlook and said it's too soon to say how air travel demand is going to play out. On an earnings call, CEO Ed Bastion also said Delta's working to avoid paying tariffs on the dozens of planes it's set to receive from Airbus this year. Of course, you'll recall that Wednesday afternoon's tariff pause injected a bunch of optimism into the market, and man oh man, did airline stocks really fly. Delta shares rose 23% on Wednesday. American Airlines also rose 23%, and United Airlines rose 26%. On a weekly basis, Delta notched a 9.7% gain, American Now, not every company was relieved by the tariff pause.

Certainly not the ones affected by levies that remained in place. Like CarMax, the used car dealer, which on Wednesday posted disappointing quarterly earnings and said it could no longer give a timeframe for financial goals that it's been working toward for years. The 25% tax on automotive imports was not included in Trump's walk back. Now the tariffs could be a mixed bag for CarMax and its auto selling peers. Analysts say the levies will likely drive up the cost of both new and used cars. This could attract more used car buyers moving away from the higher cost of both new and used cars. This could attract more used car buyers, moving away from the higher cost of buying new. Or they could lose out on demand if shoppers hold

off on buying vehicles altogether. The stock rode the broader rally higher on Wednesday, but the next day it took a nosedive, dropping 17% on Thursday. And on the week, CarMax ended up losing more than 9%. It's that time again. Bank earnings. On Friday, traders were celebrating the latest quarterly results from JP Morgan, Wells Fargo, Morgan Stanley, higher quarterly profits reported by each, while also digesting executives' warnings about the recession risks looming over us all. JP Morgan chief executive Jamie Dimon, for one, warned that the economy, quote, is facing considerable turbulence. Even accounting for Trump's tariff pause, the bank's economists see a likely recession on the horizon this year, and the other bank's executives echoed those concerns.

On Friday, it was back on the rise. Shares gained 4% on the day, bringing the stock's weekly gain to more than 12%. And now you know what's news in markets this week. You can read about more stocks that moved on the week's news in The Score, my column in the Wall Street Journal's Exchange section. Today's show was produced by Zoe Kolkin and Anthony Bansi, with supervising producer Michael Kosmides. I'm Francesca Fontana. Have a great weekend, and I'll see you next Saturday!