This is not exactly orthodox U.S. trade policy—President Donald Trump is cozying up with China while hitting out at Canada. But the stock market is getting used to such gyrations and should take the latest developments
in its stride.
After weeks of anticipation, it was confirmed Trump will meet with China’s leader Xi Jinping next Thursday. It’s likely that wouldn’t be the case unless the framework for a trade deal has been established, although the real negotiations will begin when Treasury Secretary Scott Bessent and his counterpart He Lifeng meet in the next few days.
That’s good news for stocks, which are dealing with a tariffs drag even in an earnings season that has been generally impressive to date. So far, 86% of the 130 S&P 500 companies that have reported earnings have topped analysts’ estimates. However, there are still warnings about import taxes driving up prices, such as from footwear company Deckers Outdoor, which sank on a downbeat sales outlook.
There is also always the potential for the U.S.-China deal to be derailed. Just look at Canada. Late Thursday Trump said he was terminating trade negotiations with the U.S.’s northern neighbor. The cause? A television
advertisement sponsored by the Ontario government featuring former U.S. President Ronald Reagan criticizing tariffs. The fallout is bad news for auto makers such as General Motors and Stellantis, which have enjoyed a quota of tariff-free exports to Canada, even though the stocks haven’t reacted much early Friday.
Still, investors should know by now whether to take late-night social-media posts from Trump totally seriously. The latest kerfuffle with Canada will likely be sorted and chances generally look good for an agreement with China—at least until the next unpredictable wrangle.
—Adam Clark
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CONTENT FROM: COLUMBIA THREADNEEDLE INVESTMENTS
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Spreads are tight, but yields are (still) alright
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In our quarterly update, we delve into the impact of recent fiscal and monetary policy changes on a resilient bond market. Learn more about how we're positioning portfolios in this environment to capitalize on opportunities and manage risks.
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Intel Beats Expectations. Current Demand Is Outpacing Supply.
For its first earnings report since the government took a stake, Intel beat expectations, with sales growth in its core line of processing chips for personal computers and shrinking costs. CEO Lip-Bu Tan emphasized the steady progress in rebuilding the
company and making its businesses more efficient.
- Intel reported third-quarter revenue of $13.7 billion, up 3%, and adjusted earnings of 23 cents a share. Its client computing group revenue rose 5% to $8.5 billion, and its data center and AI revenue dipped 1% to $4.1 billion. Foundry revenue fell 2% to $4.2
billion.
- The chip maker’s guidance was solid. Intel forecast revenue of $12.8 billion to $13.8 billion for the current quarter, versus the consensus call of $13.4 billion. Intel’s guidance excludes Altera, following the company’s sale of a majority ownership in the third quarter.
- CFO David Zinsner said demand for PCs has been stronger than the company expected. Corporations are upgrading computers to move to the current version of Microsoft Windows. Enterprises and cloud computing companies are also upgrading servers at a strong pace, he said. Current demand is outpacing supply.
- Last month, Intel announced a new partnership with Nvidia, part of which entails Nvidia investing $5 billion in Intel stock. In August, the company
also announced an agreement for the U.S. government to make an $8.9 billion investment in Intel shares.
What’s Next: Zinsner predicts Intel’s first quarter in 2026 will be the most challenging for the company to make enough chips to meet the robust demand. Intel’s first products based on its Panther Lake architecture will enter “high volume” production at Intel’s newest chip factory
in Arizona later this year.
—Tae
Kim
Rivian Cuts Jobs. EV Pain Spreads Across Sector.
Electric-vehicle makers are battening down the hatches, preparing for some
stormy weather. Rivian CEO R.J. Scaringe sent a memo to employees Thursday, laying out plans to cut the company’s workforce by about 4.5%. Rivian had almost 15,000 employees at the end of 2024.
- Things are getting even tougher for U.S. EV makers. Slower-than-expected EV penetration has put a lid on sales and plagued profitability aspirations. The loss of the $7,500 federal EV purchase tax credit, which expired in September, only makes it more challenging to sell electric vehicles to Americans.
- “These are not changes that were made lightly,” said Scaringe in the note viewed by Barron’s. “With the changing operating backdrop, we had to rethink how we are scaling our go-to-market functions.” Changes are being made in vehicle operations, service, and marketing organizations.
- Rivian is expected to sell about 43,000 EVs this year. Two years ago, Wall Street projected 2025 sales of 116,000 vehicles.
The start-up isn’t expected to generate positive gross profits this year. Two years ago, analysts projected 2025 gross profits of $1.3 billion.
What’s Next: When Ford CEO Jim Farley reported third-quarter numbers Thursday he warned that competition is getting tougher with Chinese auto makers expanding globally and the industry facing lower returns due to EV overcapacity and global pressures. With that as the backdrop, it makes sense Rivian is looking to cut costs. But that doesn’t ease the pain for affected employees.
—Al Root
Billionaires, Tech Firms, Crypto Bros Funding White House’s Ballroom
The stunning site of a demolished East Wing wasn’t the
