What’s News in Markets: Banks' Warnings, CarMax Stalls, Delta Shares Fly

Summary

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.

Transcript

[A]

I was never really a runner. The way I see running is a gift, especially when you have stage four cancer. I'm Ann. I'm running the Boston Marathon, presented by bank of America. I run for Dana Farber Cancer Institute to give people like me a chance to thrive in life, even with cancer. Join bank of America in helping Anne's cause. Give if you can@b of a.com supportann what would you like the power to do? References to charitable organizations is not endorsement by bank of America Corporation Copyright 2025.

[B]

Hey listeners, it's Saturday, April 12th. I'm Francesca Fontana for the Wall Street Journal and this is what's News in Markets. Our look at the biggest stock moves of the week and the news that drove them. Let's get to it. So what to talk about this week? I mean, it was so slow. There was no big news. I'm fully kidding. This week, like last week, was full of trade turmoil and giant market swings. Really? We can divide it into before Wednesday and after Wednesday, AKA and after Trump's big about face on a Bunch of the Latest tariffs So before Wednesday, the market was digesting all of the latest threats of retaliation from China in response to Trump's tariffs, as well as big Wall street players weighing in and voicing their concerns, like J.P. morgan's Jamie Dimon and BlackRock's Larry Fink. In contrast, Trump told everyone to quote, be cool via Truth Social. But clearly things in the market were not cool. And then there was Wednesday. Trump interrupted the day's sell off and announced the 90 day pause on certain tariffs to most countries, also via Truth Social. And we got a big old rally and the three major indexes notched some records. Now, after Wednesday Thursday, stocks were falling again despite the good news from the previous day. For one, the White House said that the China tariffs added up to 145%, not the 125% it had indicated the day before. And then we got one last twist. On Friday, stocks were back to rallying to close out the wild ride on a weekly basis. The dow gained about 5%, the S&P 500 gained more than 5%, and the Nasdaq climbed more than 7%. In terms of individual movers, let's start with Delta Air Lines. Delta predicted that 2025 would be its best financial year ever, but that view has gotten pretty cloudy. The airline on Wednesday ditched its full year financial outlook and said it's too soon to say how air travel demand is going to play out. On an earnings call, CEO Ed Bastian also said Delta's working to avoid paying tariffs on the dozens of planes it's set to receive from Airbus this year. Of course, you'll recall that Wednesday afternoon's tariff pause injected a bunch of optimism into the market. And man, oh, and did airline stocks really fly. Delta shares rose 23% on Wednesday. American Airlines also rose 23% and United Airlines rose 26% on a weekly basis, Delta notched a 9.7% gain, American ended up 2.2% and United rose 14%. Now, not every company was relieved by the tariff pause, certainly not the ones affected by levies that remained in place. Like CarMax, the used car dealer, which on Wednesday posted disappointing quarterly earnings and said it could no longer give a timeframe for financial goals that it's been working toward for years. The 25% tax on automotive imports was not included in Trump's walkback. Now the tariffs could be a mixed bag for CarMax and its auto selling peers. Analysts say the levies will likely drive up the cost of both new and used cars. This could attract more used car buyers moving away from the higher cost of buying new. Or they could lose out on demand if shoppers hold off on buying vehicles altogether. The stock rode the broader rally higher on Wednesday, but the next day it took a nosedive, dropping 17% on Thursday. And on the week, CarMax ended up losing more than 9%. It's that time again. Bank earnings On Friday, traders were celebrating the latest quarterly results from JP Morgan, Wells Fargo, Morgan Stanley, higher quarterly profits reported by each, while also digesting executives warnings about the recession risks looming over us all. JPMorgan chief executive Jamie Dimon, for one, warned that the economy, quote, is facing considerable turbulence. Even accounting for Trump's tariff pause, the bank's economists see a likely recession on the horizon this year, and the other bank's executives echoed those concerns. On Friday, it was back on the rise. Shares gained 4% on the day, bringing the stock's weekly gain to more than 12%. And now you know what's news in markets this week you can read about more stocks that moved on the week's news in the Score, my column in the Wall Street Journal's Exchange section. Today's show was produced by Zoe Kolkin and Anthony Banci, with supervising producer Michael Cosmitis. I'm Francesca Fontana. Have a great weekend and I'll see you next.