Good morning! President Donald Trump made history on Tuesday by delivering the longest presidential address on record to Congress.
Over the course of nearly two hours, Trump touched on a variety of topics, including DOGE, tariffs, tech companies, tax policy, and more. Here are the major takeaways.
In today's big story, the stock market gave back its post-election gains over concerns about the ongoing trade war.
What's on deck
Markets: Billionaire investor Bill Gross shared four stock picks with us.
Tech: Declaring Google's death at the hands of OpenAI was a bit premature.
Business: Millennials are once again getting screwed by the housing market.
But first, where did the gains go?
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The big story
Tariff sell-off
The markets finally got their answer on tariffs. They don't seem to like it.
The first full day of trading following the official escalation of the trade war saw plenty of chaos, writes Business Insider's Filip De Mott.
Most notable was the end of the "Trump bump." Stocks surged following President Donald Trump's November victory, fueled by the belief that his pro-growth policies would boost the economy.
But all those early gains have been slowly wiped out this year. On Tuesday, the S&P 500 ended the day down 1.2% to close at 5,778, just a hair below where the index finished on Election Day (5,783).
Even things people thought would benefit from Trump's tariffs, like the US dollar, aren't acting as expected. Despite predictions it would benefit from inflationary tariffs, it's losing ground.
(It won't be all bad. In addition to those who will feel the pain from tariffs, BI's Christine Ji shares the corners of the market that stand to benefit.)
The tariff-driven pain could be short-lived, though, as a resolution might already be on the horizon. Commerce Secretary Howard Lutnick said Tuesday afternoon that the president could announce a compromise deal with Mexico and Canada as early as today.
US stock futures are up in premarket trading following the comments, and this administration has traditionally kept a close eye on the stock market.
Throughout his first term, the president often used the stock market as a scorecard for his administration. (He even autographed a market chart for Fox News host Lou Dobbs after a particularly successful day.)
In the meantime, companies didn't waste time talking about tariffs' impact on prices.
Target and Best Buy's CEOs said on their respective earnings calls that costs could go up for consumers due to the tariffs, writes BI's Dominick Reuter. Brian Cornell, Target's CEO, said grocery prices could increase as early as this week.
Cars could be hit particularly hard. And don't think buying from a US automaker will save you.
Plenty of domestic brands still cross North American borders during the manufacturing process. BI's Graham Rapier and Benjamin Zhang compiled a list of 39 cars and trucks that could get more expensive.
For some, the tariffs could be a chance to show customers you're committed to keeping prices low. (Even if the tariffs might not be hitting you that hard in the first place.)
News brief
- A former Miss Universe judge says CEO Anne Jakrajutatip wanted to meddle with the 2023 pageant results.
- DOGE deleted another $4 billion from its 'wall of receipts.'
- Balyasny is closing its Madrid office after cutting its only portfolio manager based there.
- Education secretary Linda McMahon has three goals to overhaul the American school system in Trump's vision.
- Cerebral's former CEO just raised seed funding from Morningside for a new mental health startup.
- US agency that pushed for mass firings quietly clarifies it doesn't have the power to fire workers.
- Adtech darling AppLovin is in talks to sell its gaming unit to Tripledot Studios in a $900 million deal, sources say.
3 things in markets
1. Goldman's underperformers are already on the chopping block. Goldman Sachs cuts headcount every year, but this year the chop is coming in spring instead of the fall. Reports suggest between 3% to 5% of employees could be at risk and the bank's eyeing those at the vice president rank.
2. "Bond King" Bill Gross is worried about the markets. The billionaire investor told BI he's concerned about Trump's tariffs slowing the economy by fueling inflation and choking growth. Gross recommended investors bet on defensive stocks, from tobacco to Verizon, to ride out the economic storm.
3. Trump's chaotic first month in office is straight out of his real estate playbook. The flurry of executive orders and rapid-fire policy flip-flopping didn't shock the attorneys and real-estate execs who worked with Trump when he was active in the business. They said his unpredictable style was well-known in an industry full of big personalities.
3 things in tech
1. Google-ing it still reigns supreme. OpenAI's ChatGPT may pose an ongoing threat to Google's business, but the numbers don't indicate that just yet. On Monday, Google said it sees more than 5 trillion search queries a year, and basic math from Barclays analysts suggests it may have grown over 20% since ChatGPT's debut in 2022. Although, the arrival of AI agents is a different story.
2. The internet's viewing stats show old habits die hard. NFL games, the most-viewed live television program, are also the most-viewed live program on the internet. So despite the internet's many offerings, our tastes in TV haven't changed. We've just changed the way we consume it.
3. Why the job market is tough for software engineers right now, according to one chart. Job openings for software engineers on Indeed are at their lowest level in five years, and that drop-off likely feels even steeper. While AI is helping employed coders become more efficient at their job, it can be worrisome for job seekers in the field. But for those with strong technical skills, all hope isn't lost.
3 things in business
1. A Zelenskyy advisor told BI what he's concerned about after Trump cuts Ukraine aid. President Trump's pause on military aid to Ukraine is fueling concern about the future of the country's key weapons. An advisor to Ukrainian President Volodymyr Zelenskyy told BI the decision puts a spotlight on its American-made Patriot defenses. Patriot interceptor missiles have been crucial in defending Ukraine against Russia attacks, and halting supply could be detrimental.
2. Shopify slashed DEI funding before it was trendy. According to two people familiar with the matter, Shopify froze funding to resource groups for its Black, Latino, and LGBTQ+ employees, among others, as early as 2023. It also laid off employees working on programs to help Black and Indigenous merchants grow their businesses on Shopify, shuttering resources for those merchants.
3. The millennial homebuying paradox. After years of high demand plaguing the housing market, young Americans are finally buying homes. But population forecasts for the 2030s, like baby boomers "aging out of the housing market," suggest a monumental shift is on the horizon, and it could ultimately weaken housing demand. Cheaper housing is a good thing overall, but millennials could end up with the short end of the stick — again.
In other news
- Four mistakes you should never make if you're on a PIP, according to the CEO of Teal.
- A startup plans to make money from reviving the woolly mammoth. Here's how.
- Rumors are flying over Trump's deportations and shopkeepers say it's having a chilling effect on business.
- Big Tech is starry-eyed over quantum computers, but scientists say major breakthroughs are years away.
- Aberdeen restores the 'e's after admitting 'abrdn' rebrand wasn't that clvr.
- David Zaslav says ditching the NBA was a 'great decision' for WBD.
- Amazon is spending $100 billion on data centers this year. Energy firm GE Vernova will help power a slice of it.
What's happening today
- Federal Reserve Beige Book released.
- Campbell's reports earnings.
The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Grace Lett, editor, in Chicago. Ella Hopkins, associate editor, in London. Hallam Bullock, senior editor, in London. Amanda Yen, associate editor, in New York. Elizabeth Casolo, fellow, in Chicago.