markets

Luke Kawa4/23/25

Stocks jump as Trump softens stance on his two most market-unfriendly policies

Traders are continuing to step away from the ledge and into the sunshine this morning as the White House floods the zone with positive policy chatter.

A smattering of positive news on Tuesday after the close is fueling a massive relief rally on Wall Street, with US equity futures up 2.5% in early trading. At their highs of the morning, S&P futures were still about 1.5% below levels seen on April 9, after the president watered down reciprocal tariffs on most nations for 90 days.

President Donald Trump told the press that tariffs on China “will come down substantially” and not be near 145%. When asked if he would play hardball in negotiations with China, the president said no.

The president met with the heads of retail giants on Monday, many of which were facing significant operational challenges and higher costs linked to high levies on imports from the world’s second-largest economy.

And, at least with the UK, the White House also seems to be tackling an issue that limited its ability to find common ground with Japan’s trade negotiators: having clear demands upon which a deal could be ironed out. The Wall Street Journal reported on a draft document that sees US trade negotiators pushing for the UK to cut its auto tariff and relax rules on agricultural imports, among other measures.

The market-friendly tone from the White House wasn’t limited to trade. Trump remarked that he has no intention of firing Fed Chair Jerome Powell, but just wishes that he would be more active in lowering interest rates. Last week, Trump posted on Truth Social that “Powell’s termination cannot come soon enough.”

These headlines all arrived after Bloomberg reported that Treasury Secretary Scott Bessent said that the US and China would find ways to de-escalate in the very near future because the trade war was unsustainable with levies this high. These comments, from an official who has emphasized that it is “Main Street’s turn” for success, came during a private event hosted by JPMorgan in Washington, DC.

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Tasha Matsumoto, Luke Kawa

Stocks waver as all eyes are on Big Tech earnings

The S&P 500 finished flat as investors awaited tonight’s post-market earnings from Meta, Microsoft, and Tesla.

BISHOP'S STORTFORD, ENGLAND - JANUARY 25: Snowfall in the Essex countryside on January 25, 2021 in Bishop's Stortford, Essex, United Kingdom.

markets

Matt Phillips1h

Seagate soars after earnings as Wall Street gushes

Hard disk drive maker Seagate Technology Holdings soared Wednesday, with a nearly 20% gain shortly after 2 p.m. ET that put the once-staid maker of hard disk drives on track for one of its best days of the last decade.

Seagate reported strong earnings results after the close of trading on Tuesday, prompting a parade of positive published comments from Wall Street analysts.

The Street gushed over high sales prices and customer orders for datacenters and cloud computing providers stretching out to 2028. Analysts were also heartened by the roll-out of Seagate’s next generation hard disk product, known as heat-assisted magnetic recording (HAMR), which has now been “qualified” or approved for use by major US cloud service providers. Some examples:

Bernstein Research: “Demand remains strong, supply remains disciplined with pricing better than expected.”
Morgan Stanley: “We continue to be amazed by the strength of this [hard disk drive] cycle; even with better-than-expected supply, HDD shortages are intensifying given [cloud service providers] data storage demand.”
Citi: “Nearline capacity fully allocated through [2026], and demand visibility is strengthening based on [long-term agreements] with major cloud customers through [2027] (with pricing to be negotiated). Multiple cloud customers now currently discussing demand for [2028] to ensure supply.
Mizuho: “Nearline cloud capacity sold out for [calendar year 2026] with leading cloud customer allocations locked in for [2027] and multiple customers already working to fill [2028] demand.”
Wedbush: “The company has qualified HAMR at all US customers as minimizing any concerns around STX's execution on its newer/higher capacity platforms. In turn, we believe this result in our view bodes well for STX's continued ramp of HAMR.”

Seagate’s remarkable surge raises the prospect of a re-acceleration of the share price gains of Seagate and Western Digital, the duopoly that dominates the market for hard-disk drives, the low cost data storage products that are none-the-less crucial for management the torrent of data that AI usage is producing.

The two companies were some of the best performers in the S&P 500 last year, rising 219% and 282% respectively. If anything, the rally seems to be picking up steam with Seagate up 62% year to date, and Western Digital up about the same amount not even a month into 2026.

Bernstein Research: “Demand remains strong, supply remains disciplined with pricing better than expected.”
Morgan Stanley: “We continue to be amazed by the strength of this [hard disk drive] cycle; even with better-than-expected supply, HDD shortages are intensifying given [cloud service providers] data storage demand.”
Citi: “Nearline capacity fully allocated through [2026], and demand visibility is strengthening based on [long-term agreements] with major cloud customers through [2027] (with pricing to be negotiated). Multiple cloud customers now currently discussing demand for [2028] to ensure supply.
Mizuho: “Nearline cloud capacity sold out for [calendar year 2026] with leading cloud customer allocations locked in for [2027] and multiple customers already working to fill [2028] demand.”
Wedbush: “The company has qualified HAMR at all US customers as minimizing any concerns around STX's execution on its newer/higher capacity platforms. In turn, we believe this result in our view bodes well for STX's continued ramp of HAMR.”

Seagate’s remarkable surge raises the prospect of a re-acceleration of the share price gains of Seagate and Western Digital, the duopoly that dominates the market for hard-disk drives, the low cost data storage products that are none-the-less crucial for management the torrent of data that AI usage is producing.

The two companies were some of the best performers in the S&P 500 last year, rising 219% and 282% respectively. If anything, the rally seems to be picking up steam with Seagate up 62% year to date, and Western Digital up about the same amount not even a month into 2026.

Federal Reserve keeps rates unchanged; Waller joins Miran in dissenting in favor of rate cut

The US central bank held its policy rate steady at its January meeting.

Fed Chair Jerome Powell Holds An News Conference On Interest Rates

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Max Knoblauch3h

Carvana tumbles on report from short seller Gotham City Research

Used car retailer Carvana is down more than 16% on Wednesday, with shares on pace for their worst day since April.

A new report from short seller Gotham City Research, which had teased its publication in a post on X earlier in the day, appears to be dragging shares down. In the report, Gotham alleges Carvana’s 2023-24 earnings were overstated by more than $1 billion. (For perspective, Carvana’s earnings in those two years totaled just over $550 million.)

Gotham’s report also alleges that Carvana’s earnings are “far more dependent” on auto loan companies DriveTime and Bridgecrest than the market currently takes into account and that DriveTime’s subsidies fuel over 73% of Carvana’s earnings before interest and taxes. In its post teasing its findings, Gotham said Carvana would “age as one of the biggest Corporate Scandals of America over time.”

Per the report:

“We see problems with accounting, disclosure, and business practices that will lead to regulatory trouble. At best, we believe CVNA is far less profitable than believed, as a standalone business. At worst, CVNA is more like Tricolor, rather than Amazon. Either way, shares face massive downside risk to the share price.”

Carvana did not immediately respond to a request for comment.

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