US stocks post worst quarter since 2022 amid tariff fears

Good morning and welcome back to the first day of April. Today’s agenda includes:

• Markets worst quarter in almost three years

• OpenAI’s $40bn fundraising

• The White House’s Harvard review

• And Argentina’s pizza export

Wall Street stocks posted their worst quarter in almost three years on fears that Donald Trump’s tariffs will usher in a period of stagflation in the world’s biggest economy.

The sharp pullback in the first quarter comes as Wall Street banks and investors fret that Trump’s levies on trading partners will slow economic growth while also increasing prices.

When will the selling stop? Sharon Bell, senior equities strategist at Goldman Sachs, said: “I don’t necessarily see the floor quite yet [in stock prices].” The S&P 500 fell 4.6 per cent in the first three months of the year, the worst performance since the third quarter of 2022, according to FactSet data. Big Tech stocks, which dominated stock markets in recent years, fell most heavily during the quarter. Shares in Nvidia, which makes high-end chips that are widely used by AI groups to train their models, fell almost a fifth in the first quarter and electric-car maker Tesla plunged 36 per cent. Apple and Microsoft both lost 10 per cent and the Nasdaq Composite fell 10.4 per cent.

What’s the outlook for stocks? Very uncertain. Trump’s looming tariffs are hanging over the global economy and dampening business and consumer sentiment. The US president is expected to announce fresh tariffs later today or tomorrow on top of existing levies on imports of goods such as steel and aluminium. Trump has called tomorrow the US’s “liberation day”. Goldman said at the weekend it now put the chance of a US recession this year at 35 per cent, up from a previous prediction of 20 per cent. Global stock markets are calmer today ahead of the White House’s tariff announcement.

Here’s more on the tariff-fuelled uncertainty weighing on markets.

And here’s what else we’re keeping tabs on today:

• Economic data: The US Institute for Supply Management publishes its March manufacturing index and the S&P Global Canada Manufacturing Purchasing Managers’ Index is updated for last month.

• Central banks: Federal Reserve Bank of Richmond president Thomas Barkin participates in a fireside chat at an event hosted by the Council on Foreign Relations, in New York. The Bank of Mexico releases the results of its prior month poll of private sector analysts, with updated annual forecasts for Mexico’s GDP growth, inflation, exchange rate and benchmark interest rate as the economy slides towards recession.

• Congress: The Senate Armed Services Committee holds a hearing for Dan Caine, President Donald Trump’s nominee to be the next chairman of the joint chiefs of staff.

Five more top stories

1. Eurozone inflation fell for the second month in a row in March to 2.2 per cent, as ECB rate-setters consider whether to slow the pace of interest rate reductions. The bank has signalled that it may slow the pace of its rate cuts because of the inflationary risks posed by the looming trade war sparked by US President Donald Trump. Follow this developing story.

2. Donald Trump’s administration has launched a review into measures to tackle alleged antisemitism at Harvard University, which could freeze up to $9bn in federal funding to the institution. The departments of education and health and human services, as well as the General Services Administration are all reviewing their federal contracts and grants to Harvard despite pre-emptive moves by the university to avoid the measures.

3. OpenAI has raised $40bn in new funding from SoftBank and other investors, valuing the ChatGPT maker at $300bn as it becomes one of the best-funded private start-ups in the world. SoftBank is providing 75 per cent of the funding and the other 25 per cent is coming from a collection of investors, according to one person familiar with the fundraising. Read more on what OpenAI plans to do with the new capital.

4. Intel’s new chief executive has promised a major “culture change” at the US semiconductor group, saying he will prioritise attracting talent, building relationships with customers and slashing bureaucracy. Lip-Bu Tan also said Donald Trump’s administration is prepared to help Intel as the federal government seeks to maintain US semiconductor leadership. Here’s more on the Las Vegas speech.

5. Denmark’s foreign minister Lars Løkke Rasmussen is set to meet US secretary of state Marco Rubio this week in the first in-person, high-level diplomatic talks between the two countries since Trump’s re-election and the US president’s vow to “take control” of Greenland. Here’s what we know about the planned meeting.

Today’s big read

France’s far-right leader Marine Le Pen predicted for months that judges would not dare to immediately ban her from running for office if she was convicted for embezzling EU funds. On Monday, they did just that, dramatically changing France’s political landscape ahead of the 2027 presidential election which she was favourite to win. What are her legal options now and how will it affect the race to succeed Emmanuel Macron?

We’re also reading and listening to . . . 

Chart of the day

Global energy demand rose faster than usual last year, according to new data published by the International Energy Agency, as record temperatures across the world meant more power was used for cooling in the self-perpetuating loop between climate change and energy use.

Take a break from the news . . . 

In the hierarchy of best-loved pizzas there is the Napolitana and the Romana, maybe even the New York slice and Chicago deep dish. What is not on the list is the Argentine. But pizzerías outnumber grill houses in Buenos Aires and now Argentines want the world to acknowledge their doughy creation.