China Cranks Up Tariff "Pain" to +84%

Trade War Impact - The U.S. has increased tariffs on Chinese imports by 50%, while China has reciprocated with a 50% tariff on U.S. goods, raising tariffs on American goods to 84% and on Chinese goods to 104% [1][2] - The ongoing trade war is expected to cause significant economic pain, with the potential to bring negotiators to the table, although the timeline for resolution remains uncertain [2] Market Reactions - Pre-market trading shows significant declines: Dow down 850 points, S&P 500 down 95 points, and Nasdaq down 280 points, indicating market distress due to the trade situation [3] - Spot oil prices have dropped to four-year lows, with WTI crude at approximately $56 per barrel, reflecting broader economic concerns [3] Economic Indicators - Wholesale inventories for February are expected to show moderated growth of 0.3%, down from 0.8% the previous month, suggesting companies may be adjusting to current trade conditions [4] - The minutes from the latest Federal Open Market Committee meeting will provide insights into Fed members' concerns regarding the economy affected by heavy tariffs [5] Federal Reserve Projections - Analysts have revised expectations for Fed funds rate cuts from 1-2 to 5 in 2025, indicating a forecast of a significant economic downturn likely due to prolonged tariff impacts [6] Delta Air Lines Q1 Results - Delta Air Lines reported Q1 earnings of 46 cents per share, exceeding expectations of 40 cents, although revenues of $13.0 billion fell short of the $13.8 billion consensus [7] - Guidance for the next quarter has been lowered, with expected earnings per share between $1.70-2.30, down from a previous estimate of $2.62, and revenues projected to change between -2% to +2% [8] - Despite the mixed results, Delta shares have seen a modest increase, likely due to the earnings beat and a year-to-date decline of 40% [8]