Intel's New CEO Thrills Wall Street. There's Still a Lot of Work Ahead. — Barrons.com

US equity indexes slumped after President Donald Trump warned the European Union of significant import duties on alcohol products and cooling producer prices failed to inspire confidence among investors.

The Nasdaq Composite dropped 1.67% to 17,351.3, the S&P 500 was down 1.2% to 5,531.7, and the Dow Jones Industrial Average traded 1.1% lower at 40,877.5. All sectors fell intraday, with communications services, consumer discretionary, and real estate leading the decliners.

Trump threatened to impose a 200% tariff on imports of European alcoholic products in response to retaliatory duties announced by the EU on Wednesday. The US administration's 25% global levies on steel and aluminum imports took effect that day.

Meanwhile, the US producer price index remained unchanged in February, compared with an upwardly revised 0.6% increase in January, the Bureau of Labor Statistics said Thursday. The print lagged the 0.3% growth estimate in a survey compiled by Bloomberg. Year-over-year, overall producer prices were up 3.2% last month versus a 3.7% rise in January, trailing the 3.3% rate estimated by the Street.

"The details of the producer price report don't offer as encouraging a signal as the unchanged headline reading may suggest," Oxford Economics Senior US Economist Matthew Martin said in remarks emailed to MT Newswires. "The two most volatile components, energy and trade services, were major drags, whereas food prices continue to rise at a fast pace, and core goods registered its largest monthly increase since January 2023 — even before the bulk of tariffs take effect."

US Treasury yields fell intraday, with the two-year yield down 1.7 basis points to 3.98%.

West Texas Intermediate crude oil futures slid 1.2% to $66.89 a barrel.

Intel appointed semiconductor industry veteran Lip-Bu Tan as its new chief executive, effective March 18. Tan, who previously served as CEO of Cadence Design Systems , will succeed interim co-CEOs David Zinsner and Michelle Johnston Holthaus. The chipmaker's shares surged 15% intraday, the top performer on the S&P 500 and the Nasdaq.

Investors need to keep a "cautious and risk-off posture," Northlight's Chris Zaccarelli says, as benign economic data is countered by the prospect of unpredictable tariffs. "We have added utilities companies, gold and more defensive international companies" he says, referring to stocks of consumer staples, pharmaceuticals and the like. The defensive move is taking place over the past two months, he says. Inflation data this week showed price increases above the Fed's target, but not accelerating. Tariffs could change that. "Clearly this is going to be a much more volatile year," Zaccarelli says. U.S. stock indexes fall, led by a 1.5% drop in the Nasdaq. (paulo.trevisani@wsj.com; @ptrevisani)

U.S. stocks fell on Thursday as investors grappled with fresh tariff threats from former President Donald Trump and assessed new inflation data.

The Dow Jones Industrial Average declined 275 points, or 0.76 percent, while the S&P 500 dropped 0.74 percent. The Nasdaq Composite saw a sharper decline, shedding 1.17 percent.

Also read: US stocks hover near correction territory as Trump's tariff risks mount

Trump, in a post on Truth Social, vowed to impose 200 percent tariffs on European alcoholic beverages in response to the EU’s 50 percent levy on whisky imports. He claimed the move would bolster domestic wine and champagne producers.

Lingering uncertainty over U.S. trade policy has weighed on markets this week. The S&P 500 and Nasdaq are tracking weekly losses of 3.3 percent and 3.7 percent, respectively, while the Dow is down 3.6 percent, on course for its worst week since March 2023. The S&P 500 briefly dipped into correction territory earlier in the week, retreating 10 percent from its February peak.

Read more: Forex reserves record biggest weekly gain since 2021

However, inflation data released on Thursday provided some respite. The producer price index (PPI), a key measure of wholesale inflation, remained flat in February, defying expectations of an increase. This followed a milder-than-expected consumer price index (CPI) reading, offering hope that inflationary pressures may be cooling.

Despite the data, analysts remain cautious. While some had anticipated a technical rebound after the recent market slump, concerns over Trump’s trade policies continue to cloud sentiment. The uncertainty also complicates expectations around the Federal Reserve’s next move on interest rates.

Intel shares surged 10 percent after the chipmaker announced Lip-Bu Tan as its new CEO. Tan, the former chief executive of Cadence Design Systems, will take over from interim co-CEOs David Zinsner and MJ Holthaus.

Meanwhile, UiPath tumbled 18 percent as the automation software company’s fourth-quarter revenue and first-quarter sales forecast fell short of market expectations. The company posted revenue of $424 million for the quarter, narrowly missing the $425 million projected by analysts surveyed by LSEG. UiPath also issued a disappointing revenue outlook for the current quarter, expecting between $330 million and $335 million—well below the $368 million analysts had anticipated.

Meanwhile, in Europe, stocks struggled for direction on Thursday as fresh trade tensions rattled investor sentiment. Shares of major wine and spirits companies slumped after former U.S. President Donald Trump threatened a 200 percent tariff on alcoholic products from France and other European Union nations. Pernod Ricard, Rémy Cointreau, and Davide Campari all tumbled more than 3 percent following Trump’s social media post, in which he framed the move as retaliation for the EU’s newly imposed 50 percent tariff on American whiskey.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before making any investment decisions.

By Philip van Doorn

The Harbor Commodity All-Weather Strategy ETF has matched the S&P 500's performance since the fund was launched in February 2022 - but it has been a much smoother ride

When an investor is having difficulty deciding what to do as market conditions change and wants to take less risk, a customary response is that it is best to have a diversified portfolio.

But over short periods, prices for stocks and bonds tend to move up and down together. And if you are a typical index-fund investor tracking the S&P 500 SPX, you might already be aware that the largest companies are dominant because the index is weighted by market capitalization.

This means the group of megacap tech companies known as the Magnificent Seven - Apple Inc. (AAPL), Microsoft Corp. (MSFT), Nvidia Corp. (NVDA), Amazon.com Inc. (AMZN), Alphabet Inc. (GOOGL), Meta Platforms Inc. (META) and Tesla Inc. (TSLA) - make up 30.8% of the SPDR S&P 500 ETF Trust SPY. If we add Berkshire Hathaway Inc. (BRK.B), Broadcom Inc. (AVGO) and Elly Lilly & Co. (LLY), the portfolio is 36% concentrated to its largest 10 holdings. So much for diversification within the benchmark U.S. large-cap stock index.

If you want a higher level of diversification within your portfolio, you can add exposure to commodities. It is easy to do this by holding gold or buying shares of an exchange-traded fund that holds metals, but you might also go for broader exposure through a fund such as the Harbor Commodity All-Weather Strategy ETF HGER. The fund is rated five stars (the highest rating) within Morningstar's U.S. Fund Commodities Broad Basket category.

HGER is subadvised by Quantix Commodities. During an interview with MarketWatch, Matthew Schwab, head of investor solutions at Quantix, and Andrew Miller, director of research at Harbor Capital Advisors, explained how the fund is managed to be flexible through all market conditions.

Before digging further into the strategy, take a look at this chart showing how HGER has performed from its inception on Feb. 9, 2022, through Wednesday, in comparison with the SPDR S&P 500 ETF and the S&P 500. All returns in this article include reinvested dividends and are after funds' expenses, which are 0.68% of assets under management for HGER and 0.0945% for SPY:

The overall returns have pretty much been the same, with HGER and SPY trailing the S&P 500 slightly - the index has no fund-manager expenses. But HGER has provided a smoother ride for investors, as it held up well during the broad stock-market decline in 2022 and has shined this year.

This chart shows the action from Feb. 9, 2022 (when HGER was established), through the end of that year.

And so far in 2025, HGER has returned 4.5%, while the S&P 500 has declined 4.6%.

Fuel for fear

In a report on Wednesday, BCA Research U.S. bond strategist Ryan Swift wrote in a note to clients that "a falling stock market and sticky bond yields represent the worst of both worlds for investors."

The yield on 10-year U.S. Treasury notes BX:TMUBMUSD10Y is higher than it was a year ago, which means bond prices are lower, because "inflation expectations are higher" and the term premium for long-term bonds has increased, Swift wrote.

"While term premium estimates are necessarily imprecise, there is some logic to the idea that greater uncertainty about the inflation impact of tariffs and fiscal policy has caused bond investors to demand more compensation for taking duration risk," Swift wrote.

Again leaving aside opinions about policy, Swift's colleague Arthur Budaghyan, BCA's chief emerging markets/China strategist, wrote in a note on Wednesday: "Unlike during Trump 1.0, the current Trump administration is working towards strategic objectives. Hence, the current U.S. administration will be more tolerant of short-term pain than previous ones." Budaghyan added that President Donald Trump's goal of increasing U.S. industrial output would require "either import tariffs, currency depreciation, or a combination of both."

"Notwithstanding periodic short-term rebounds, the path of least resistance for global share prices remains down. The resilience of European and Chinese stocks in the face of the U.S. equity selloff is unsustainable," Budaghyan wrote.

HGER strategy

The Harbor Commodity All-Weather Strategy ETF tracks the Quantix Commodity Index, which is designed to provide protection against inflation. Its main strategy is to pursue what is known among commodity traders are "roll yield." Rather than simply betting that certain commodity prices will rise, this strategy takes advantage of periods when current spot prices are high and demand is expected to decline over the long term.

When current spot prices are high and futures prices going out several years are lower, that commodity market is in a situation known as backwardation.

During a period of backwardation, if a money manager is maintaining a portfolio of futures going out several years, profits (roll yield) can be made by selling futures contracts expiring in the near term, while purchasing contracts with maturities further out.

Matthew Schwab at Quantix described commodity investments as the "ultimate hedge" against inflation, while emphasizing that the index tracked by HGER had been designed to protect individual investors. He also pointed out that because of the way commodity-futures trading works, most of the fund's assets at any time are earning interest, which now means a yield of close to 4.5% because the federal-funds rate is in a target range of 4.25% to 4.50%. So at a time when short-term rates are higher as the Federal Reserve works to hold down inflation, the fund has an automatic cushion.

Andrew Miller at Harbor said: "If you were uncertain, you would be in T-bills anyway. With this you get that spread, with potential commodities earnings on top. You can think about it from an insurance perspective."

Schwab explained that the roll-yield strategy is most often applied to crude oil. "Petroleum is more liquid. It is the most inflation-sensitive commodity," he said.

Miller said that the fund was designed "to screen in and out of commodities."

"We shift in and out of gold. We can go up to 40% gold in the index, which is where it is now," he said. The fund has been heavily invested gold since roll yields became unattractive last year.

Gold for April delivery (GC00) was trading at $2,949.10 an ounce early Thursday on the New York Mercantile Exchange. That was up 11.6% from $2,641 at the end of 2024, according to continuous front-month futures prices tracked by FactSet. The price of gold was up 35% from a year earlier, up 49% from three years earlier and up 94% from five years earlier.

Schwab said the increase in gold prices reflected a broad change in the policies of central banks (excluding the Federal Reserve) to increase their gold holdings after decades of declines, according to data compiled by the International Monetary Fund and Bloomberg.

Schwab concluded by saying: "When you are worried, diversification is the way to address that worry." And that doesn't only mean spreading risk within the stock or bond markets.

HGER's commodity-focused strategy to hedge against inflation has led to investment performance differentiated from those of stocks and bonds.

Another Deep Dive: These 13 growth stocks are expected to roar back from their declines so far this year

-Philip van Doorn

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

February's core PCE inflation index is likely to keep January's 0.3% pace, Bank of America's Stephen Juneau and Jeseo Park write, adding they see risk the print could reach 0.4%. "If our forecast is correct, inflation will take a step in the wrong direction." They say inflation is unlikely to fall enough for the Fed to cut interest rates this year, "especially given policy changes that boost inflation," unless the economy "really weakens." Investors seem to disagree, pricing in 57% odds of at least three cuts this year, according to CME data, although that percentage has been declining this week. (paulo.trevisani@wsj.com; @ptrevisani)

The S&P/TSX Composite Index swung between gains and losses at the 24,440 mark on Thursday nearing four-month lows as escalating U.S. trade tensions inject uncertainty into Canadian equities and trigger cautious trading.

President Trump’s threats of additional tariffs on EU goods—including a proposed 200% levy on European alcoholic beverages—have intensified global trade risks, while Canada’s retaliatory tariffs on $29.8 billion of U.S. goods in response to steel and aluminum duties further strain investor sentiment.

These mounting trade disruptions, coupled with broader recession risks in both the U.S. and Canada, are weighing on export-driven sectors and dampening business confidence.

E-commerce leader Shopify led the decline with losses exceeding 2%, and major financial institutions, including CIBC, fell by over 1%, whereas mining giants Agnico Eagle, Barrick Gold, Wheaton Precious, and Franco-Nevada each added more than 1%.