WSJ What’s News: Banks' Warnings, CarMax Stalls, Delta Shares Fly
Released April 12, 2025

Introduction

On the April 12, 2025 episode of WSJ What’s News, host Francesca Fontana delves into the tumultuous week in the financial markets, highlighting significant stock movements, economic policies, and corporate performances that have shaped investor sentiment. This edition, titled “What’s News in Markets: Banks' Warnings, CarMax Stalls, Delta Shares Fly”, offers a comprehensive analysis of the week's key events, providing listeners with essential insights into the factors driving market volatility.

Market Overview: A Week of Turmoil and Triumphs

Francesca Fontana opens the discussion by acknowledging the seemingly slow week, only to reveal the underlying chaos that characterized the financial markets. She emphasizes the stark contrast in market behavior before and after a pivotal announcement by former President Donald Trump.

"This week, like last week, was full of trade turmoil and giant market swings," Fontana states at [00:45]. She explains that the week can be bifurcated into pre-Wednesday and post-Wednesday periods, primarily influenced by Trump's stance on tariffs.

Pre-Wednesday: Tariff Tensions and Market Anxiety

Before Wednesday, the markets were grappling with the uncertainty surrounding Trump's tariffs on China. Heightened tensions arose as potential retaliation from China loomed, causing investors to remain jittery. Glenn Fontana highlights influential voices from Wall Street, including J.P. Morgan's Jamie Dimon and BlackRock's Larry Fink, who voiced their apprehensions about the escalating trade conflicts.

"The market was digesting all of the latest threats of retaliation from China in response to Trump's tariffs," Fontana notes [01:10]. Despite Trump's public calls for calm via his social media platform, Truth Social, market participants remained unsettled, leading to significant fluctuations in stock prices.

Wednesday: The Tariff Pause and Market Rally

The turning point came on Wednesday when Trump announced a 90-day pause on certain tariffs targeting multiple countries, delivered through Truth Social. This unexpected move injected optimism into the markets, triggering a substantial rally. Fontana highlights the impressive gains across the major indexes, with the Dow Jones Industrial Average, S&P 500, and Nasdaq reaching new heights.

"Trump interrupted the day's sell off and announced the 90 day pause on certain tariffs to most countries," Fontana explains [02:05]. This declaration temporarily alleviated investor fears, resulting in a surge in stock prices and a temporary stabilization of market sentiment.

Post-Wednesday: Volatility Persists Amid Mixed Signals

However, the respite was short-lived. On Thursday, stocks began to decline once more, despite the previous day's positive news. The White House clarified that the China tariffs amounted to 145%, an increase from the initially reported 125%, adding complexity to the trade dynamics.

"The White House said that the China tariffs added up to 145%, not the 125% it had indicated the day before," Fontana remarks [03:00]. Additionally, Friday saw another twist as markets rebounded, closing the week on a high note with the Dow gaining approximately 5%, the S&P 500 over 5%, and the Nasdaq climbing more than 7%.

Individual Stock Movers: Delta Air Lines Soars, CarMax Stumbles

The episode delves into specific stock performances, spotlighting Delta Air Lines and CarMax as notable movers of the week.

Delta Air Lines: Navigating Uncertainty with Resilience

Delta Air Lines experienced a significant surge, with its shares rising by 23% on Wednesday post-tariff pause announcement. Fontana discusses Delta's initial optimistic forecast for 2025, which became uncertain as the airline revised its full-year financial outlook, citing unpredictability in air travel demand.

"Delta predicted that 2025 would be its best financial year ever, but that view has gotten pretty cloudy," Fontana states [04:30]. CEO Ed Bastian addressed these concerns during an earnings call, revealing efforts to circumvent tariffs on incoming Airbus planes.

Despite the uncertainty, Delta's strategic maneuvers resonated with investors, resulting in substantial weekly gains of 9.7%. Similarly, American Airlines and United Airlines saw their shares increase by 2.2% and 14%, respectively, underscoring the sector's resilience amid trade tensions.

CarMax: Struggling Amid Tariff Pressures

In contrast, CarMax, the used car dealership giant, faced a challenging week. The company reported disappointing quarterly earnings and withdrew its previously projected financial goals, leaving investors uncertain about its future trajectory.

"The 25% tax on automotive imports was not included in Trump's walkback," Fontana explains [06:00]. This missing component of the tariff pause posed significant challenges for CarMax, potentially increasing costs for both new and used vehicles. Analysts suggest that while higher prices might steer consumers towards used cars, the overall demand could decline if buyers delay vehicle purchases.

Consequently, CarMax's stock mirrored this volatility, dropping 17% on Thursday and ending the week with a 9% loss, despite a brief rally earlier in the week.

Bank Earnings: Profits Rise but Recession Fears Linger

The episode also covers the latest quarterly earnings from major banks, including JPMorgan Chase, Wells Fargo, and Morgan Stanley. These institutions reported higher profits, celebrating their financial performance amidst a backdrop of broader economic concerns.

However, executives from these banks issued stark warnings about impending recession risks. Jamie Dimon, CEO of JPMorgan Chase, encapsulated the sentiment with his cautionary outlook:

"The economy is facing considerable turbulence," Dimon warned [07:45]. Despite the temporary tariff pause, JPMorgan's economists foresee a potential recession looming within the year. Other banking leaders echoed these concerns, signaling a cautious approach despite robust earnings.

Fontana highlights the paradox of rising profits coupled with recession fears, illustrating the complex landscape investors must navigate. On Friday, despite these warnings, bank stocks continued to climb, contributing to a weekly gain of over 12%.

Conclusion

Francesca Fontana wraps up the episode by reinforcing the dynamic nature of the financial markets, shaped by geopolitical developments, corporate performances, and macroeconomic indicators. She encourages listeners to delve deeper into the week's stock movements and analyses by visiting the Wall Street Journal's Exchange section.

"Now you know what's news in markets this week," Fontana concludes [09:00]. The episode, produced by Zoe Kolkin and Anthony Banci with supervising producer Michael Cosmitis, offers a nuanced perspective on the interplay between trade policies, corporate strategies, and economic forecasts, equipping listeners with the knowledge to navigate the ever-evolving market landscape.

Notable Quotes:

• Jamie Dimon: "The economy is facing considerable turbulence." [07:45]
• Francesca Fontana: "Delta predicted that 2025 would be its best financial year ever, but that view has gotten pretty cloudy." [04:30]

Production Credits: Produced by Zoe Kolkin and Anthony Banci
Supervising Producer: Michael Cosmitis
Host: Francesca Fontana

For more detailed analyses and updates, readers are encouraged to visit the Wall Street Journal's Exchange section.