Tariffs, Tumult, and Three Stocks Holding Strong | Image Source: www.fool.com
WASHINGTON, D.C., April 12, 2025 – As trade tensions spread to global markets, Wall Street’s volatility tells a deeper story about investor politics, power and fragile psychology. After President Donald Trump’s unexpected tariff announcement on April 2, entitled “Day of Liberation” for his administration, markets saw wild oscillations, raising fears that were raised during the first months of the VOCID pandemic19. But in the midst of chaos, several sectors and businesses appear discreetly as resilient or even promising.
Why are financial markets so sensitive to tariffs?
Financial markets thrive in predictability. When policy becomes erratic – especially in such fundamental areas as international trade – investors begin to lose confidence in forward-looking projections. According to economic analysts, Trump’s recent decision to impose reciprocal tariffs, followed by a 90-day temporary reprimand, has led to an unprecedented market. Slamp; P 500 sank 3.5% the day after a 9% profit, highlighting the mood changes of anxious investors.
This volatility reflects not only uncertainty about trade performance, but also deeper concerns about the broader economic trajectory. JP Morgan now puts the chances of a US recession in 2025 at 60%, a peak largely attributed to the uncertainty induced by policies. For both businesses and consumers, this unpredictability encourages caution – delaying investments, purchases and expansion plans.
Q: Are tariffs effective in reducing U.S. production?
A convincing political narrative has been anchored around tariffs, which paints them as tools to reactivate the manufacturing and restoration of middle class prosperity. But according to economic policy experts, the facts give a much more sober image. Less than 9% of the US workforce is currently used in manufacturing. Even a total investment in the trade deficit is likely to increase by only 1% or 2%.
“We are dealing with the nostalgia of a world that no longer exists,” said an economist at Harvard. “The automation and changes in consumer behaviour have constantly redefined our industrial base. Manufacturing is important, particularly in national security sectors such as semiconductors and green energy, but it is not an asset for employment.”
Super microcomputer: A controversial return
A company that tests its softness despite the controversy is Super Micro Computer (NASDAQ: SMI). The technology company, known for the construction servers that make up Nvidia’s leading AI chips, saw its stock calibrated 63% last year. Catalyst? Allegations of accounting mismanagement, the design of a high-level auditor, and a close escape from Nasdaq’s write-off.
However, the story has changed. In December 2024, an independent committee completed a three-month review, clarifying Super Micro’s management of any fraud or misconduct. New CFO contracts and new Chief Accounting Officer positions have also contributed to restoring market confidence.
“Although short sellers make noise, foundations talk a lot,” said a technical analyst. “Super Micro sales are 54% year after year, and is negotiating with a P/E 10 before, incredibly weak for a company in the AI infrastructure boom.”
With the growing demand for AI and the deployment of Nvidia Blackwell GPUs that are gaining steam, Super Micro can be placed for a silent resurgence, assuming it can keep its internal controls tight.
Q: Will tariffs significantly increase U.S. government revenues?
While the administration anticipates additional tariff revenues of $600 billion, many economists remain skeptical. The logic is simple: as prices increase due to tariffs, consumers buy less, reducing the tax base. In addition, if tariffs were able to attract foreign investment to the United States, these companies would be exempt, which would compromise long-term revenues.
Tariffs also have a regressive impact. The least remunerative households are disproportionately affected, with estimates suggesting an additional cost of $2,000 to $4,000 per year for the typical American family. Input tariffs such as steel, for example, can save some jobs in one industry while increasing costs – and reducing jobs – in dozens of others.
Defense Stock: the quiet winners
Although technological and consumer actions have been abused, defence has exceeded performance. According to CNBC, companies such as Huntington Ingalls Industries (HII), Lockheed Martin and L3Harris Technologies have relative strength. The iShares U.S. Aerospace & Defense ETF (ITA), while less than 4% since the tariff announcement, is still much better than the S plagaamp; P 500 in general.
It’s not an accident. As Jefferies analyst Sheila Kahyaoglu said, “Defence entrepreneurs operate primarily at the national level. They are not exposed to tariff risks as global manufacturers.” Gabelli Fund” Tony Bancroft echoed this, pointing out that between 80% and 90% of Boeing’s defence unit is based on US resource components.
With political instability in the Middle East and the Pacific, defence spending remains a top priority. Trump’s budget proposal for AF26, which exceeds a billion dollars, reflects this approach. HII, for example, increased by 16% in March after the president mentioned the reactivation of shipbuilding.
Don Bilson and Douglas Harned of Bernstein favoured L3Harris, citing its alignment with defence priorities and operational improvements. Harned’s $267 price target represents a 20% potential outside of current levels.
A shelter in the economic storm
When uncertainty increases, frugality takes the central scene. Dollar Tree (NASDAQ: DLTR) is a recession coverage of textbooks. The sale of low-cost and non-discretionary goods has become a target for households exposed to inflation and now at prices.
With analysts predicting a possible recession, the low-priced model of Dollar Tree could see a renewed strength. Consumers are likely to cut budgets from high-end retailers to value chains. This places DLTR not only as a defensive movement, but also as a potential growth story in a low-level economy.
Even in the midst of tariff turbulence, its central clientele remains faithful and growing. And while competitors of supply chains abroad may see increased costs, the dollar tree supply model is sufficiently diversified to mitigate the worst of these effects.
Q: Will US exports suffer from new tariffs?
Yeah, and probably on several fronts. Tariffs should strengthen the dollar by reducing the demand for currencies. While this may seem positive, it makes U.S. exports more expensive – and therefore less competitive – abroad. Moreover, the repressive tariffs of the countries concerned are almost guaranteed.
As commercial analysts have pointed out, these reprisals will not be limited to property. It can also affect services, particularly technology-related exports, such as cloud services or online platforms. American companies could see their access to reduced markets, even in areas where they have traditionally dominated.
Alphabet and the sales office: long term
The advertising giants Alphabet and The Trade Desk saw their actions hit hard, largely because of fears of reducing advertising spending during a fall. The alphabet, whose properties of Google and YouTube dominate the Internet, is particularly vulnerable as advertising accounts for 75% of their revenues.
However, there is a longer-term case. Google sends over 90% of the search engine market, giving it unparalleled price power. In addition, the company’s cloud division, which continues to grow at two digits, offers a high-level alternative to advertising revenues. With $95 billion in cash, the alphabet has the muscle to deal with short-term storms and invest in future growth.
The commercial counter, on the other hand, specializes in digital advertising, especially in the fast growing connected TV space. Its UID2 framework, which replaces third-party cookies, has been widely adopted and promises to protect its advantage in specific marketing. Trading in a historically weak valuation could be an undervalued jewel in an area about to bounce.
Like Nasdaq flirts with the bear market, these companies represent not only resilience, but also strategic opportunities. In chaotic markets, clarity often emerges not from those who cry louder, but from those who adapt better. Whether in defense, retail or digital infrastructure, smart money looks beyond noise.
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