US stocks climb amid signs government may avert shutdown
Spencer Platt/Getty Images
(NEW YORK) — U.S. stocks climbed in early trading on Thursday, advancing amid signs the federal government may avert a shutdown and recovering some of the losses suffered during an escalating trade war.
The Dow Jones Industrial Average jumped 230 points, or 0.6%, while the S&P 500 increased 0.9%. The tech-heavy Nasdaq climbed 1.3%.
The market upswing comes after Senate Democratic Leader Chuck Schumer announced Thursday night that he plans to vote to keep the government open, signaling that there will almost certainly be enough Democratic votes to advance a House GOP funding bill before a shutdown deadline at the end of the day Friday.
The gains offered relief for investors reeling from a market decline set off last week by President Donald Trump’s tariffs.
On Thursday, the S&P 500 closed down more than 10% since a peak attained last month, meaning the decline officially qualified as a market correction. It marked the index’s first correction since October 2023.
Trump on Thursday stood firm on his tariff policy, despite the losses on Wall Street.
“I’m not going to bend at all,” Trump told reporters at the White House on Thursday. When asked whether he would reconsider a fresh round of tariffs set to go into effect on April 2, Trump offered a one-word reply: “No.”
The Dow Jones Industrial Average and the S&P 500 each closed down more than 1% on Thursday. The tech-heavy Nasdaq declined nearly 2%.
This is a developing story. Please check back for updates.
ABC News’ John Parkinson, Lauren Peller, Allison Pecorin and Rachel Scott contributed to this report.
(WASHINGTON) — President Donald Trump on Thursday stood firm on his tariff policy, hours after threatening to escalate a global trade war with a 200% tariff on champagne and other alcohol products from the European Union.
“I’m not going to bend at all,” Trump told reporters at the White House on Thursday. When asked whether he would reconsider a fresh round of tariffs set to go into effect on April 2, Trump offered a one-word reply: “No.”
U.S. stocks tumbled, erasing some gains in the S&P 500 and tech-heavy Nasdaq a day earlier. Shares of large European winemakers also fell on Thursday in apparent reaction to Trump’s tariff threat.
The threat of additional U.S. tariffs came after the EU announced plans to slap tariffs on $28 billion worth of U.S. goods, including a 50% tariff on whiskey. Those tariffs marked a response to U.S. duties on steel and aluminum imports.
Trump called on the EU to drop its tariff on whiskey, saying the U.S would otherwise “shortly place” a tariff on alcohol products from the EU.
Trump sharply criticized the EU, describing the organization as “one of the most hostile and abusive taxing and tariffing authorities in the World.”
In a post on X, French Trade Minister Laurent Saint-Martin said: “Donald Trump is escalating the trade war he chose to unleash. France remains determined to retaliate together with the European Commission and our partners. We will not give in to threats and will always protect our sectors.”
If Trump moves forward with his tariff threat, the move could have a significant impact on American consumers.
The US is the world’s largest importer of wine and champagne. The US imported nearly $4.9 billion worth of Wine each year, with $1.6 billion imported from France, according to World Bank Data. In 2023, the US imported more than $1.7 billion worth of champagne.
The Distilled Spirits Council of the U.S. is urging the U.S. and EU to come to a resolution that gets the industry back to “zero-to-zero tariffs.”
“This is a model that has allowed spirits exports between the U.S. and EU to flourish and is in line with President Trump’s vision for fair and reciprocal trade,” the council’s President Chris Swonger wrote in a statement.
In his first term, Trump also targeted the alcohol industry. A series of tit-for-tat tariffs hit alcohol products in the U.S. and the EU. The Biden administration suspended those tariffs, but now the industry is once again in the crosshairs. The industry has still been recovering from that first tariff spat.
For the past three years, “U.S. distillers have worked hard to regain solid footing in our largest export market,” Swonger added.
The tariff threats on Thursday mark the latest skirmish in a global trade war. In response to U.S. duties on steel and aluminum, Canada announced retaliatory tariffs applied to $20.7 billion in U.S. goods, government officials said. The U.S. imports more steel and aluminum from Canada than from any other country.
The Trump administration last week slapped a 10% tariff on China, doubling taxes on Chinese imports to 20%. In response, China imposed retaliatory duties on U.S. agricultural goods, deepening a trade war between the world’s two largest economies.
The trade tensions triggered recession fears on Wall Street. Goldman Sachs last week hiked its odds of a recession from 15% to 20%. Moody’s Analytics raised its gauge of the probability of a recession to 35%.
This is a developing story. Please check back for updates.
(NEW YORK) — While Elon Musk has vaulted into a powerful role overhauling government agencies and upending Washington, the world’s richest person has suffered a $106 billion drop in wealth due to steep decline in shares of his Tesla electric car company.
Tesla’s stock price has plummeted 30% from its all-time high in December, including a 21% selloff since Inauguration Day. The losses have sent Musk’s net worth tumbling from a peak of $486 billion on Dec. 17 to its current level of about $380 billion, according to Bloomberg.
The stock woes have divided current and former Tesla shareholders. Critics of Musk fault his new role and polarizing reputation, blaming recent reports showing lackluster sales in some regions on his foray into politics. They say Musk must step away from the Trump administration for the company to thrive. Supporters, on the other hand, say Musk’s role in the White House has little to do with the selloff, noting that Tesla shares remain higher than where they stood on Election Day. Instead, some say, the company is suffering growing pains as it weathers stiff competition in electric vehicles and pursues new ventures like self-driving taxis.
“I don’t have a problem if Elon wants to save a bunch of money for America. I say, ‘Where’s the good part in this for Tesla'” Ross Gerber, a prominent Tesla investor, told ABC News, referring to cost-cutting efforts undertaken by Musk’s Department of Government Efficiency. Tesla representatives did not respond to ABC News’ request for comment.
Despite disagreement over the effect of Musk’s government role, both current and former Tesla shareholders who spoke to ABC News broadly acknowledged the company’s recent business hiccups.
Tesla sold fewer cars in 2024 than it did the year prior, marking the company’s first year-over-year sales decline in more than a decade, earnings released in January showed. As rivals have challenged Tesla’s dominance over the electric vehicle market, the company has promised a future revenue stream from autonomous taxis, also known as robotaxis.
Musk announced in late January that the company would roll out its robotaxi test program in Austin, Texas, in June. But within days, China-based competitor BYD unveiled advances in self-driving technology, which the company said was set to be included in models costing as little as $9,600. Gary Black, managing partner of The Future Fund, which manages $100 million in assets, including Tesla shares, said the recent selloff of Tesla is primarily the result of investor jitters about whether the company can dominate self-driving technology the way it did electric vehicles.
“Over time, you will see Teslas and other cars self-drive. But Tesla is not going to be the only one,” Black told ABC News’ Elizabeth Schulze.
The stock also faced downward pressure this week when a Musk-led group of investors offered to buy OpenAI for $97.4 billion, making possible a scenario in which Musk would sell some of his Tesla shares to finance the deal, Black said. Black said that, in his opinion, the downturn has nothing to do with Musk’s government role.
“It’s always good to know the president of the United States — to be able to pick up your phone and say, you know, ‘I need this favor, that favor,'” Black said.
A jump in Tesla shares after Trump’s victory suggests many investors viewed the relationship that way. The stock price soared about 85% over a six-week period following Election Day.
But some investors lay the blame for the downturn squarely at Musk’s feet.
Nell Minow, Vice Chair of ValueEdge Advisors and a longtime critic of Musk, said Musk has been “absent” from the company.
“I think that he is a huge drag on the stock right now,” Minow told Schulze. “No question, he’s a problem.”
“Elon Musk is to the Tesla brand what the Green Giant is to corn,” Minow said. “He has made himself the brand and that is always very risky.” Minow, who said she donated nearly all of her Tesla shares to charity last year, also criticized the Tesla board for what she said was a failure to hold Musk to account, or update shareholders and the public about a leadership plan while Musk runs DOGE.
“We don’t know what the board is thinking. They have not spoken out in any way,” Minow said. “They have not made a filing with the SEC about what the impact of this side hustle is, and the employees and the shareholders need some kind of certainty.”
New York City Comptroller Brad Lander echoed concerns about the board’s ability to rein in Musk. Lander, who oversees $1.25 billion in Tesla stock through the city’s five pension systems, said the lack of oversight was a “long-standing problem.”
“Independent governance is designed to provide a voice for shareholders at the table,” Lander, who is running for New York City mayor and has publicly sparred with Musk, said in a statement to ABC News. “When companies are controlled by a set of directors with either family or aligned interests, they lose this.”
For his part, Musk has looked to hype up Tesla’s prospects, saying on an earnings call last month that he believes there is an opportunity for it to be “the most valuable company in the world.”
During the call, AllianceBernstein Research analyst Daniel Roska questioned Musk on how Tesla plans to meet its ambitious projections given its high valuation.
Musk emphasized Tesla’s focus on real-world AI, claiming the company is making significant strides.
“We’re working on perfecting real-world AI and making rapid progress week over week, if not month over month,” Musk said. “I go where the problem is, essentially … I focus where the challenges are the greatest.”
Some Tesla shareholders remain bullish on the company despite its short-term drop. Angel investor Larry Goldberg, known as “Tesla Larry,” posted on X that he supports Musk’s political efforts, even if they impact the company’s stock price.
“If the Trump administration (and DOGE) does not fix the deficit, my Tesla shares — and everyone’s US stocks and bonds will be worthless,” Goldberg wrote.
(NEW YORK) — The major U.S. airlines thought they were going to have a strong first quarter, but things are not going as well as expected.
Each of the major U.S. airlines has put out guidance pointing to significant economic uncertainty that is directly affecting their domestic bookings this spring.
For its part, Delta was sure this would be a strong first quarter, but this morning the airline’s CEO admitted they were wrong.
Speaking out Tuesday during the J.P. Morgan industrials conference in New York, Southwest, United and American all echoed the same message.
The reasons: Two major plane incidents — including the deadly midair collision between an American Airlines regional jet and U.S. Army Black Hawk helicopter over Washington, D.C. — the uncertain economic future, plummeting government travel and reductions to corporate travel.
Overall, bookings fell after the deadly Jan. 29 D.C. crash, rebounded a bit, and then fell again after the Feb. 17 crash in Toronto, in which a regional jet crashed upon landing, overturned and caught fire.
“It caused a lot of shock amongst consumers. There’s a whole generation of consumers that didn’t realize these things can happen,” Delta CEO Ed Bastian said during the J.P. Morgan conference on Tuesday.
Consumer confidence is unsettled and companies are waiting to see how things shake out. While companies wait, they are booking fewer seats.
Delta expects revenue to be down $500 million — or 4% less than it anticipated this quarter.
Airlines say they will cut capacity — reducing the number of seats they are flying — in order to stabilize the market.
American Airlines has taken a significant hit at the D.C.’s Ronald Reagan National Airport from both the January crash and reductions in government travel.
The airline is reducing capacity there to limit the losses.
United says government travel is down 50%.
One bright spot: Airlines say despite the domestic bookings being weak, international travel remains strong — and airlines believe this summer will still be strong.
