WSJ What’s News - What’s News in Markets: Tariff Worries, Amazon’s AI Bet, Mattel Climbs

Episode Date: February 8, 2025

Which companies dropped on concerns about tariffs? And why did Amazon’s forecast worry investors? Plus, what drove gains in Barbie maker Mattel’s shares? 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

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Rise to rewards with the BMO Eclipse Rise Visa Card. Terms and conditions apply. Hey listeners, it's Saturday, February 8th. I'm Francesca Fontana for the Wall Street Journal, and this is What's News in Markets, our look at the biggest stock moves of the week and the news that drove them. Let's get to it. Welcome back, happy February. The stock market had a totally mellow, lazy start to the month. I'm kidding. We had trade drama thanks to Trump tariffs and another spate of earnings

reports. We can talk about some of the winners and losers in those later, because right now, we have a jobs report to unpack. The Fed's in wait-and-see mode right now in terms of interest rate cuts, so it's watching key indicators like the health of the labor market. And this jobs report was a mixed bag. The unemployment rate ticked down, but jobs grew by less than expected. In any case, not a showstopper and not likely to jumpstart any rate cuts. All three of the major indexes ended slightly lower this week.

The Dow and Nasdaq each lost about half a percent, while the S&P 500 fell about a quarter of a percent. So what stocks are the potential biggest losers of Trump's looming trade war? Well, we got a sneak peek on Monday by looking at which were reacting to the latest tariff moves from the White House. In case you missed it, the US struck last-minute deals with Mexico and Canada to delay new 25% tariffs while proceeding with an additional 10% tariff on China that went into effect Tuesday. China hit back with retaliatory tariffs that will start on Monday. So what stocks are moving on this?

First, automakers. Ford and General Motors use Mexico and Canada as a manufacturing base for the U.S. and may have to really scramble to adjust their supply chains. Then there's the tech companies like iPhone maker Apple and chip maker Nvidia. Companies whose supply chains run through China, which didn't get a delay on its levy like the other two countries. Plus, President Trump has been threatening new tariffs on chip imports. So we saw players in those industries moving lower during Monday's session.

We also saw the same from individual stocks like Constellation Brands. That's the importer of Modelo and Corona Beers, and, as you might guess, investors were considering the implication of Mexico tariffs on the company. Constellation shares ended up dropping 3.5% on Monday, and moved mostly lower the rest of the week. One stock that delivered its investors good news on its trade war prospects and earnings — Mattel, Barbies, Hot Wheels, etc. etc. The company posted better than expected fourth quarter results, forecast higher sales and profit in 2025, and announced a stock buyback.

But wait, there's more! The company also said it's prepared to offset any ill effects of Trump's tariff plans, in part by having a global supply chain that isn't overly reliant on any one country, and it's considering price increases down the road. The company expects those measures to contribute to that higher profit and revenue this year, and investors were really feeling that optimism. Mattel shares rocketed 15% higher on Wednesday and held onto those gains the rest of the week. Now this wouldn't be a stock market podcast if we didn't talk about AI at least once,

right? I mean, I'm joking, but seriously, in markets, politics, advertising, it is everywhere. Including in Amazon's earnings. The tech giant is joining other tech giants like Meta Platforms and Alphabet and spending big on AI. Amazon said Thursday that it planned more than $100 billion in capital expenditure for this year, a record amount, as part of a push to build generative AI infrastructure. Now, there's been some concern among some investors questioning whether such spending sprees are prudent and if AI stocks are overvalued. Plus Amazon also projected lower than expected sales and operating income. And after disappointing cloud results from Alphabet and Microsoft, investors took special

notice of Amazon Web Services revenue missing expectations in the latest quarter. The stock ended Friday's trading session down 4.1% and on a weekly basis, Amazon shares lost 3.6%. 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, with supervising producer Tali Arbel.

I'm Francesca Fontana. Have a great weekend and see you next Saturday.