U.S. stocks took another hit Tuesday as investors reacted to fresh tariffs and the inevitable retaliatory moves from Canada, Mexico and China.
The trigger? President Donald Trump’s new round of tariffs, which include a 25% levy on Canadian and Mexican imports, and another 10% tariff on Chinese goods, which now stand at 20%.
As expected, the response was swift. Canada fired back with its own tariffs on U.S. imports, and China added 15% duties on American farm products like chicken and pork.
So, why another steep sell-off?
Investors hate uncertainty, and a deepening trade war brings plenty of it. China’s response was actually milder than expected, which could leave room for negotiation. That might explain why the market’s reaction wasn’t even worse.
So is the tariff panic justified?
In my opinion, I think 80% to 90% of this is now priced in as we head into a super bullish seasonal period.
On the corporate side, Target (TGT) warned that tariffs could squeeze its Q1 profit, though it still managed to post an earnings beat. The stock barely budged.
Meanwhile, Best Buy (BBY) also said it’s “highly likely” tariffs will lead to higher prices and gave a cautious annual sales outlook despite solid earnings — another sign that consumers may be pulling back. Its shares took a big hit, down about 14%
A Stock to Watch: NVIDIA (NVDA)
Tech superstar Nvidia (NVDA) is a stock to keep on your radar this week, as it historically tends to be bullish at the beginning of March.
Despite the current downturn, this seasonal trend means it could be worth a look, especially if things turn around.
Buying NVDA on March 3 and holding for 19 days has delivered an average return of 5.1% over the past several years. While past performance is no guarantee, it’s definitely worth considering as we move into March, when one of the most bullish seasonal periods of the year begins.
Plus, we got a drop yesterday and so far this morning, which gives the opportunity for a better entry point.
Seasonality is the foundation of my On the Clock Stocks strategy — feel free to check it out here.
Our average return per options trade including winners and losers is a beautiful 15.58% since the program’s inception on Nov. 30, 2023!
The win rate is 59% and the average hold time is 17 days.
Finally, markets don’t like trade wars, but these tariff battles aren’t new. The question is whether this latest round is just noise — or the start of something bigger.
Stay nimble!
Graham Lindman
Graham Lindman Trading
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