S&P 500: Pharma Giants Lead Decline as Tariff Threats Rattle Pfizer, Merck, Johnson & Johnson

Pharmaceutical Sector Hit by Tariff Threat: PFE, ABBV, MRK, LLY, AMGN, JNJ

U.S. pharmaceutical giants face significant pressure in pre-market trading following President Trump’s announcement of an impending “major tariff on pharmaceuticals.” Pfizer and AbbVie shares declined more than 4%, Merck dropped almost 4%, and Eli Lilly pulled back over 3% in early trading.

Dow pharmaceutical components are leading overall index losses. Merck emerged as the biggest decliner, down 4.6%, while Amgen shed 4.3% and Johnson & Johnson lost 4.1%. The combined impact of these pharmaceutical stocks is expected to remove approximately 133 points from the Dow, contributing to futures pointing down 763 points (2%).

Retail Sector Adjusting to New Tariffs: WMT, TGT, BBY, HD

Walmart cautioned investors about uncertainty in its first-quarter operating income growth, citing the need for “flexibility to invest in price as tariffs are implemented.” The retailer maintained its sales guidance of 3-4% growth but pulled its operating income forecast. Oppenheimer analyst Rupesh Parikh noted this update was “better than feared” given recent tariff developments.

Other major retailers are also showing pre-market weakness, with Target, Best Buy, and Home Depot each sliding about 3%. These moves reflect concerns about margin pressure as a 104% tariff on Chinese imports and a 46% levy on Vietnamese imports took effect at 12:01 a.m. ET Wednesday.

Tech and Auto Sectors Under Pressure: AAPL, NVDA, F, GM

Tech stocks remain vulnerable to trade tensions, with Apple falling more than 2% in pre-market, extending a four-day losing streak that has erased roughly 25% of its market value. The iPhone maker has been hit hardest among “Magnificent Seven” companies due to its reliance on China.

Automakers are feeling similar pressure, with Ford and General Motors slipping 3% and 2% respectively as new tariffs take effect. In contrast, Nvidia stands as a rare gainer, up 1.2% in pre-market trading, highlighting market selectivity amid the trade uncertainty.

Transportation and Chinese Stocks: DAL, BABA, MCHI

Delta Air Lines noted that “growth has largely stalled” due to “broad economic uncertainty around global trade.” The airline is responding by cutting capacity in the second half of the year while reducing costs and spending—potentially providing a template for other companies facing similar pressures.

Despite broader market pressure, U.S.-listed Chinese firms posted surprising gains, with e-commerce giant Alibaba rising 3.1% and the iShares MSCI China ETF adding 3%. This performance tracks advances in domestic Chinese markets as state holding companies and Chinese brokerages continue to provide support.

Market Outlook

Traders should prepare for continued volatility as markets digest these tariff implementations. The focus for market participants should remain on company-specific tariff exposure and potential pricing adjustments as firms adapt to these new trade conditions.

More Information in our Economic Calendar.