👋 Good morning! Stocks had an interesting Thursday, opening deep in the red before paring back the losses after news broke about Iran drafting a protocol with Oman to manage ship traffic in the Strait of Hormuz.
As managing traffic means there must be traffic to manage, investors grasped that news and cast aside some of President Trump’s comments Wednesday evening about escalating the conflict and leaving in a few weeks, with the Strait maybe or maybe not in control.
The S&P 500 (^GSPC) gained 0.1%, the Dow (^DJI) lost 0.1%, and the Nasdaq (^IXIC) gained 0.2%. Domestic oil prices (CL=F) remained over the $110 mark on Thursday while global Brent (BZ=F) sat just under that.
On the agenda this morning:
🇺🇸 What we’ve learned in the year since ‘Liberation Day’
💰 OpenAI buys its way into tech media
⚡️ Tesla posts disappointing delivery numbers as bulls look to AI pivot
The picture is likely to show a fragile pre-war labor market. Economists expect to see 65,000 jobs added, which would be a breakeven number to keep the delicate balance. Check out our jobs report preview here.
🛒 Walmart shoppers aren’t breaking under the weight of $4 gas — yet. Jefferies analyst Corey Tarlowe met with Walmart execs and noted only sentiment changes, not behavioral ones.
A year ago, President Trump enacted sweeping tariffs that hit more than 100 trading partners, allies and economic adversaries alike, in a monumental shift away from the global economic order.
Responding to what the White House deemed an economic emergency, the tariffs were sold as a way to spark a manufacturing renaissance and rejigger a rigged trade regime. America first, in a nutshell.
It’s easy to pinpoint that period on a zoomed-out, five-year stock chart because on a screen, it looks like a disaster. Some policy analysts might describe it that way too. Judging the trade upheaval by the numbers and the administration’s stated goals — of jobs growth, trade surpluses, and merely transitory inflation — shows the protectionist swerve fell short of its aims.
President Trump signing the April 2, 2025 executive order on “Liberation Day.” (SAUL LOEB / AFP) ·SAUL LOEB via Getty Images
The record is messy and mixed. But so much has changed in a year, from the rollbacks and trade deals to a thundering Supreme Court decision and the reverberations of the war in Iran.
Here’s a look back at one of the most important days for investors and what we can take away from “Liberation Day.”
Where we are now
The average effective tariff rate stands at 11.0%, according to the Yale Budget Lab, marking the highest level since 1943, not including last year’s peak.
President Trump reissued a 10% global tariff in February after the Supreme Court struck down the use of his emergency powers to enact sweeping “reciprocal tariffs.”
On Thursday, new data from the Commerce Department showed that the US trade deficit jumped almost 5% in February to $57.3 billion from January’s $54.5 billion. And even as trade figures were volatile last year as importers scrambled to react to shifting policies, the US trade deficit remains similar to what it was on April 2, 2025.
The big list. (Chip Somodevilla/Getty Images) ·Chip Somodevilla via Getty Images
There and back again: A market journey
Following erratic trade policy last year may have felt disorienting. The Dow plunged almost 1,700 points, and the S&P 500 shed almost 5% in a single day, echoing the chaos of the early phase of the COVID pandemic.
But once Trump backed down from executing the most devastating levies, markets began their march upward. In a sudden reversal, Trump walked back dozens of country-specific tariffs, sending Wall Street into a dizzying rally.
Where Congress and public opinion failed to keep the president from pursuing a trade overhaul, markets acted as a powerful restraint. Trillions of dollars in stock losses and a surge in Treasury yields appeared to persuade Trump to change course.
Containers at the Taiwanese Port of Keelung on April 4, 2025. (Annabelle Chih/Getty Images). ·Annabelle Chih via Getty Images
In the weeks that followed, markets continued to rally on news of coming trade deals with other nations, agreements to negotiate further, and inklings of a detente with Beijing.
AI bullishness and muscular corporate earnings overrode lingering trade drama. And the doldrums of last April gave way to S&P 7,000.
A few lessons we’ve learned
Liberation Day showed the strength of the TACO trade (“Trump Always Chickens Out”) as a tool for understanding US policy and informing investment strategies. But the market response to the Iran war highlights the limits of that framework too. Unlike a trade war, the president has less of a say about when an actual war will end.
The Fed is still watching tariff inflation wind its way through the economy. During the Fed’s policy meeting last month, Chair Jerome Powell said he sees some progress on inflation: “It should come as we start to see in the middle of the year, progress on tariffs — going through once and then tariff inflation coming down.”
Combined with the energy disruption in Iran, that progress may be undermined, and instead of a rate cut, there’s growing chatter about the possibility of a rate hike if pricing pressures worsen.
Globalization isn’t dead, and job losses in American manufacturing have continued to be significant. Trade flows and supply chain sourcing shifted, and alienating traditional trading partners has spurred other nations to strengthen ties to China.
3 lingering questions we have
How can the Fed separate inflation winding down from tariffs from the new oil shock — and is that even possible or useful?
Is the tariff washout — a chaotic phase that the market now registers as a blip — a useful model to understand the consequences of the Iran war?
What will a new high-tariff era accomplish?
(OpenAI) ·OpenAI
OpenAI is buying TBPN, the buzzy tech news show that livestreams on X and YouTube, in another instance of everything becoming TV. Tech world luminaries are looking for ways to bypass traditional media outlets to reach new audiences and get their points across. Why not just buy a successful video podcast?
The terms of the deal were not disclosed. But OpenAI is pulling a media outlet into its orbit that’s popular within the tech and investing community. Even without interfering with TBPN’s content, OpenAI can guarantee the success of an innovative broadcast that’s largely sympathetic to entrepreneurs and tech firms.
TBPN’s co-founder and co-host of the company’s daily livestream, John Coogan, said in a post on X that the show won’t change as a result of the acquisition. And in an email, TBPN said it’s retaining full editorial control and enacted a contractual agreement to “preserve its independence and limit OpenAI’s influence.”
From OpenAI, TBPN gets a resource-rich patron and proximity to the company at the heart of the AI transition — with all the tech talent, industry connections, and business growth that comes with it.
(Justin Sullivan/Getty Images) ·Justin Sullivan via Getty Images
Tesla is explicit about wanting to be seen as more than a car company. But it still has to sell cars, and its first quarter deliveries posted on Thursday missed estimates, underscoring a challenging EV landscape.
EVs are getting renewed attention as the war in Iran forces gas prices higher. But it will likely take months before more painful stops at the pump actually translate into lifting EV demand. An electric car without a subsidy — in this economy?
Whatever the social standing of EVs, Tesla and its backers don’t see fading support for its vehicles as a reason to stay down. On the contrary, it’s more reason to lean into its AI transition.
“While the delivery numbers were quite underwhelming, this was not a shock to us given the current EV backdrop across geographies while the company shifts gears to focus more on its AI strategy,” said Wedbush analyst Dan Ives in a note on Thursday.
“All eyes remain on the company’s AI rollout including the company’s switch in long-term mission of developing a sustainable revenue stream from AI and robotics with ~$20 billion in capex tied to new factories for cybercab, Optimus, battery, and AI compute expansion to reshape the company.”
“Wow. Incredible amount of [state of the art] training data now just available to China thanks to @mercor_ai leak. Every major lab. Billions and billions of value and a major national security issue.”
— Y Combinator president and CEO Garry Tan
Hiring startup Mercor, whose customers include OpenAI and Anthropic, became the latest AI company to have a data snafu as a hacking group apparently gained access and published some of the company’s customer data.
Coming on the heels of Anthropic’s source code breach (that time related to human error), the breach shows that the AI world has the makings of a major problem, though perhaps too niche to be one of mere PR.
Still, the tech bigwig community sees this as a potential beginning of a new paradigm.
Last year, Starbucks mandated that its employees write something handwritten and personalized on customers’ cups to foster more of a personal connection.
Whether that was the problem for Howard Schultz’s famous “third place” vision is debatable. And certainly those messages and counter small talk feel different if news of that corporate dictum managed to drift to your ears.
Now, CEO Brian Niccol and co. are doubling down, offering $1,200 annual bonuses to the highest-performing cafés to further incentivize the friendly faces.
Economic data: Change in nonfarm payrolls, March (65,000 expected, -92,000 previously); Change in private payrolls, March (+55,000 expected, -86,000 previously); Change in manufacturing payrolls, March (-12,000 previously); Average hourly earnings, month-on-month, March (+0.3% expected, +0.4% previously); Average hourly earnings, year-on-year, March (+3.8% expected, +3.8% previously); Unemployment rate, March (+4.4% expected, +4.4% previously); Labor force participation rate, March (62.1% expected, 62% previously); S&P Global US services PMI, March final reading (51.1 previously); S&P Global US composite PMI, March final reading (51.4 previously)
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