Tariff Uncertainty Weighs on U.S. Stocks and Business Leaders

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Alex Ossola (0:19)

Anthropic says Chinese AI companies are using Claude to train their own models. Plus stocks slump on tariff uncertainty while US business leaders scramble for answers.

Chip Cutter (0:30)

President Trump's announcements on Friday and Saturday reiterating that tariffs are still a big part of his agenda, I think has left many executives struggling to understand, where do we go from here? What does this mean for our companies? Do we get refunds back? Do consumers ask for them?

Alex Ossola (0:45)

And in the weight loss drug market, Novo Nordisk's fortunes fall while Eli Lilly's rise. It's Monday, February 23rd. I'm Alex Ossola for The Wall Street Journal. This is the PM Edition of What's News, the top headlines and business stories that move the world today.

US stocks have fallen sharply today. Among the major indexes, the Dow led the losses, dropping 1.7 percent with declines in American Express, Goldman Sachs and JP Morgan pulling down the benchmark. The Nasdaq lost 1.1 percent and the S&P fell 1 percent. WSJ Markets reporter Hannah Erin Lang says there are a few factors driving the sell-off.

Hannah Erin Lang (1:26)

So you didn't see huge swings in the market in the immediate wake of the Supreme Court decision. However, you've seen the president talking about finding new ways to impose tariffs. And I think that introduced this source of volatility back into the market where investors are once again wondering what options the president might pursue and which companies might be impacted. So that's a part of what's going on today. You have a few other factors as well. There's concerns about conflict in the Middle East. And then another really interesting thing that happened was this viral sub-stack post from Citrini Research, which outlined a scenario just a couple years in the future where artificial intelligence has been successful and it's actually totally disrupted huge chunks of the economy. The unemployment rate is really high. So this post outlined what could be some really devastating consequences of artificial intelligence and that spooked investors.

Alex Ossola (2:26)

The recent uncertainty around US tariffs, the Supreme Court's decision on Friday that President Trump's global tariffs were illegal and then Trump's declaration of a new global tariff of 10% and then 15% is having ripple effects around the world. In the European Union, lawmakers have agreed to shelve talks on the bloc's trade deal with the US. Members of the European Parliament were going to vote on approving two legal texts that are part of a trade agreement the bloc reached with the US last year. Now, that's on pause. A spokesperson for the European Commission told reporters today that officials need more clarity before deciding on any next steps. Meanwhile, in the US, business leaders are left with a flood of questions. To answer them and to try to predict what's coming next, many business leaders spent the weekend digesting legal briefs and the president's response. Chip Cutter covers workplace and management for the journal and has been in touch with a number of them. Chip, how are business leaders feeling right now? Do they feel like this latest tariff news is good for them or bad for them or something else?

Chip Cutter (3:24)

They're confused. They felt initially a little bit of a jolt of relief feeling like, hey, this was good news. We've been worried about these tariffs for so long. Now potentially they're going away after the Supreme Court ruling. But of course, President Trump's announcements on Friday and Saturday reiterating that tariffs are still a big part of his agenda, I think has left many executives struggling to understand, where do we go from here? What does this mean for our companies? Do we get refunds back to consumers ask for them? Some companies realize they may need to file litigation to get this. Some lawyers have said that this will not be automatic and perhaps it's going to take longer than many companies might have expected.

Alex Ossola (4:03)

I would imagine with the legal fight, there are pros and cons to doing that. Some of the cons being, of course, money and time, but are there political concerns for some of these business leaders?

Chip Cutter (4:13)

Absolutely. I mean, many companies are really reluctant to even talk about this because they don't want to ruffle the Trump administration, which has staked so much of its economic agenda on these terms.

Alex Ossola (4:25)

Business leaders have been here before, right? We had Liberation Day, we had the time before that and after that. So do they feel like they know how to handle this kind of uncertainty now, or does everything feel like it's on the line?