Sector Snapshot
Tariff-driven volatility continued to ripple across markets Monday, weighing on trade-exposed sectors from apparel and autos to chemicals and tech. Defensive retailers and energy names found pockets of support, while banks and industrials sold off on mounting recession risk. The broader tone reflected growing investor uncertainty around cost inflation, consumer resilience, and global supply chain disruptions.
Retail, Consumer Staples & Restaurants
Apparel names including COLM, LEVI, PVH, RL, and VFC face estimate cuts and downgrades as tariffs ranging from 26% to 54% on Asian imports weigh on costs and margins. Discount retailers like DLTR and DG are seeing improved sentiment, with analysts viewing them as likely beneficiaries of trade-down behavior. Meanwhile, food scanner data shows sales deceleration, with HSY, TSN, and MDLZ all seeing volume declines.
Homebuilders, Building Products & Furnishings
Homebuilder estimates were trimmed across the board ahead of Q1 earnings, with concerns around a weak spring selling season and higher input costs from tariffs. Keybanc’s hardlines traffic data showed some softening attributed to the Easter calendar shift. Wayfair was downgraded on supply chain vulnerability tied to tariffs.
Leisure, Gaming & Lodging
The airline sector saw multiple downgrades on fears of a slowing economy. An M&A deal between MESA and Republic Airways aims to scale regional operations. In autos, Audi halted delivery of 37,000 cars at U.S. ports due to the new 25% auto tariffs, and TSLA and GM both saw downgrades tied to brand and policy risk. Lodging and travel stocks saw cuts to estimates on expectations of weaker consumer demand.
Energy, Industrials & Materials
Energy names were mixed. FANG was upgraded as oil dipped below marginal cost, making it attractive relative to smaller peers like CRC and VTLE which were downgraded. In chemicals, broader concerns about long-term margin risk under new tariff regimes drove multiple downgrades and target cuts. AXTA was upgraded while LYB was downgraded. Machinery and materials stocks such as CAT and URI also saw widespread downgrades due to tariff-exacerbated demand uncertainty.
Financials
Banks came under pressure with Morgan Stanley revising its stance to neutral on large caps and downgrading several midcaps due to slowing loan growth and rising recession risks. Credit card companies continued to slide on reduced consumer confidence and tariff-related spending headwinds. In consumer finance, SYF and BHF were downgraded while UWMC was upgraded due to potential mortgage volume upside if rates fall. Industrial REITs EGP and TRNO were downgraded following sharp post-tariff performance reversals.
Biotech & Pharma
Obesity drug makers slipped after the administration declined to allow Medicare coverage. AMLX was upgraded following expanded pipeline modeling. Life sciences names like MTD were upgraded on ability to pass on costs, while others like ILMN face margin risk. QGEN raised guidance despite macro headwinds.
Technology & Media
Apple and other hardware names are reassessing supply chains with AAPL reportedly increasing iPhone shipments from India. Roku was upgraded on improving fundamentals, while FOXA was downgraded on limited digital growth potential. Internet names like PINS were downgraded as advertiser budgets soften. Jefferies cut forecasts across 29 software names with downside risk highest in PLTR and most favorable in ORCL, ADBE, and CRM. Semis showed modest gains but remain broadly down on the year due to tariff concerns and slower enterprise spending.
Featured Articles
Many U.S. Companies Plan to Keep China Ties Despite Geopolitical Tension
A new survey reveals that the majority of U.S. firms operating in China intend to maintain or expand their footprint despite tariffs and trade pressures.
Companies cited China's market size, supply chain integration, and consumer demand as strategic reasons for staying.
The report underscores a pragmatic approach from multinationals, even amid calls for reshoring.
The findings reflect a gap between political rhetoric and corporate strategy. Full article
AMD Faces Downgrade as Price War with Intel Looms
AMD shares came under pressure after a downgrade citing intensifying competition with Intel.
Analysts fear a looming price war in CPUs could pressure margins across the sector.
The downgrade comes despite AMD’s recent product rollouts and strength in AI-related demand.
Intel’s willingness to cut pricing to regain market share is seen as a key risk. Full article
Microsoft’s Quiet Moves Toward DeepSeek
Microsoft is expanding ties with Chinese AI startup DeepSeek while reaffirming its partnership with OpenAI.
This suggests a strategic hedging approach amid regulatory scrutiny and rising costs tied to AI model training.
DeepSeek, a spinoff of Tsinghua University, is positioning itself as a low-cost GPT-style model alternative.
Microsoft’s dual alignment may shape the competitive AI landscape in Asia and beyond. Full article
Walmart Memberships Rise as Shoppers Brace for Higher Prices
Walmart reported a sharp uptick in membership signups as consumers prepare for economic strain.
Analysts link the growth to value-seeking behavior amid rising tariffs and recession concerns.
The company’s grocery and general merchandise traffic is strengthening relative to peers.
Walmart's ability to leverage its scale and pricing power is gaining attention. Full article
JPMorgan Flags Trouble Ahead for High-Yield and Private Credit Markets
JPMorgan warns that the private lending and junk bond sectors are increasingly vulnerable.
Analysts point to higher-for-longer rates and deteriorating credit quality as compounding risks.
Private credit funds face liquidity challenges as investor redemptions rise.
The note comes amid broader fears of economic slowing and shifting rate expectations. Full article