💀 Tariffs on the way

and stocks struggle

Good morning investors! Bitcoin fell to nearly $90,000 yesterday as stocks also continued to suffer.

Today we cover:

  • Tariffs are coming

  • Stocks decline

  • More earnings

Back in the game: Following a $1.5 billion hack last week, crypto exchange Bybit replenished its reserves with emergency loans and large deposits. The company secured nearly 447,000 ether from firms like Galaxy Digital, FalconX, and Wintermute. A proof-of-reserves audit by cybersecurity firm Hacken confirmed the restoration.

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Also, now that BTC has fallen (again), it might be a good time to watch this video:

📊 Economy and News 

Trump Confirms Tariffs on Canada and Mexico Will Proceed After Delay

President Donald Trump confirmed Monday that sweeping U.S. tariffs on imports from Canada and Mexico will take effect as scheduled when the temporary delay expires next week.

“The tariffs are going forward on time, on schedule,” Trump stated during a White House press conference when asked whether the postponed tariffs on America’s two trading partners would be reinstated.

Reiterating his stance on trade, Trump argued that the U.S. has been “taken advantage of” by foreign nations and reaffirmed his commitment to imposing reciprocal tariffs. “So the tariffs will go forward, yes, and we’re going to make up a lot of territory,” he added.

On February 1, Trump signed executive orders imposing 25% tariffs on products from Mexico and Canada, along with a 10% duty on Canadian energy. He defended the move as a response to what he described as Mexico and Canada’s failure to curb crime and drug trafficking at their borders with the U.S.

However, two days later, Trump temporarily halted the tariffs after Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau pledged to strengthen border security measures. Announcing the agreements on Truth Social, Trump stated that the U.S. would pause the Canadian tariffs for 30 days, while those on Mexico would also be delayed for a month.

In related news, US manufacturers see higher metal prices as tariffs near.

Global hits:

AI spending: Apple to open AI server factory in Texas as part of $500 billion U.S. investment. Also, Microsoft reiterates plan to invest $80 billion in AI, but may ‘adjust infrastructure in some areas’.

Lay offs: Starbucks to lay off 1,100 corporate workers as sales sag. On the other hand, DBS to 'shrink workforce' by 4,000 in 3 years due to AI adoption.

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📈 Stocks

S&P 500 5,983.25 (-0.50%)
DJIA 43,461.21 (+0.076%)
NASDAQ 19,286.93 (-1.21%)
BRENT CRUDE 74.80 (+0.03%)
* Prices as of Mar 3rd, 12:20 AM UTC

S&P 500 Falls as Tech Stocks Struggle, Extending Market Decline

The S&P 500 dropped Monday, failing to recover from Friday’s sharp sell-off as major tech stocks came under pressure.

The Nasdaq Composite briefly turned negative for 2025, dragged down by a 10% plunge in Palantir, which has now fallen over 22% in five days. Microsoft dipped 1% after a TD Cowen report suggested the company is cutting data center spending, raising concerns about AI-related investments. Nvidia also slid 1.5%.

On the other hand, UnitedHealthcare fell 1.05% as the company faces a government probe into its Medicare billing.

The declines followed last week’s broader market losses, with the Dow and Nasdaq falling over 2% and the S&P 500 down more than 1%. On Friday alone, the Dow dropped over 700 points, while the S&P 500 and Nasdaq lost 1.7% and 2.2%, respectively.

Market sentiment weakened after February economic data signaled trouble, with the U.S. services sector contracting and consumer confidence missing expectations.

Rivian earnings: Rivian surpassed Wall Street’s Q4 earnings expectations, achieving its first gross quarterly profit. However, the company forecasts lower sales in 2025. It expects to reduce adjusted losses to $1.7–$1.9 billion, down from $2.69 billion in 2024. Rivian’s results were bolstered by $299 million from regulatory credit sales and $214 million from software and services.

Good to know: Shortage of Novo Nordisk’s Wegovy and Ozempic drugs is resolved, FDA says. Also, IMAX CEO expects $1.2 billion in box office receipts this year, the best in the company’s history.

💵 Personal Finance

What does the Fed do?

The Federal Reserve's mandate is to "promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."

This is known as the "dual mandate."

  • Maximum employment means that the economy is running at its full potential, with everyone who wants to work able to find a job.

  • Stable prices means that inflation is low and stable, so that people's purchasing power is not eroded over time.

  • Moderate long-term interest rates means that interest rates are not too high or too low, so that businesses can borrow money to invest and grow, and consumers can afford to buy homes and cars.

The Federal Reserve uses a variety of tools to achieve its mandate, including:

  • Setting the federal funds rate, which is the interest rate that banks charge each other for overnight loans.

  • Purchasing or selling government bonds, which can affect the amount of money in circulation.

  • Changing reserve requirements, which are the amount of money that banks must keep on deposit at the Federal Reserve.

How does it impact the stock market?

Fed manages interest rates, which impacts the market.

Higher rates result in less borrowing, which slows consumer spending and negatively impacts the growth of companies.

Similarly, lower rates encourage borrowing and allow consumers to spend more, thus helping companies. In addition, higher rates make other investments, such as savings accounts, more attractive, which often forces investors to leave the stock market and look at alternatives.

On the plus side, the Fed typically signals its intentions ahead of time, and comments from Fed executives can impact the market.

💰 Be a Better Investor

"Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair."

Milton Friedman

Resources:

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Nothing in this newsletter is financial advice. Always do your own research and think for yourself.