(Frederick Florin/Getty Images)

Pharma stocks sink on threats that they won’t be spared from tariffs much longer

President Trump said he would impose tariffs on pharmaceuticals, then he didn’t, and now he said he will. Investors are queasy.

J. Edward Moreno

4/9/25 8:05AM

Pharmaceutical stocks are dipping after President Trump suggested they won’t be spared by tariffs for much longer.

Drugmakers were spared from the first round of tariffs that went into effect on Wednesday, despite Trump consistently saying the industry was a priority. Pharmaceutical products are normally excluded from tariffs under a World Trade Organization agreement that the US signed in 1994.

But speaking at a dinner for the National Republican Congressional Committee on Tuesday evening, Trump told a crowd of lawmakers that pharmaceuticals will soon be hit with “major” tariffs. Companies like Pfizer, Eli Lilly, and Johnson & Johnson sank in premarket trading.

“When they hear that, they will leave China,” he said. “They will leave other places because they have to sell — most of their product is sold here and they’re going to be opening up their plants all over the place.”

Trump: "We're gonna tariff our pharmaceuticals ... we're going to be announcing very shortly a major tariff on pharmaceuticals." pic.twitter.com/AzewiYDoHC
— Aaron Rupar (@atrupar) April 9, 2025

Though the president’s comments focused on China, the companies most likely to reshore any operations to the US are the aforementioned European drugmakers. They tend to produce research-based name-brand drugs that carry high margins in the US. Bloomberg reported yesterday that European drugmakers are asking the bloc for some favors to convince them not to jump ship and move to the US.

Generic drugs, on the other hand, tend to be imported from India, where labor is cheap. Since the margins are so thin on those drugs, generic drugmakers said they don’t have many levers to pull besides raising prices. Active pharmaceutical ingredients, the chemical components within those finished medicines, predominantly come from China.

Pharmaceutical goods have generally been excluded from the tariffs imposed on China that started in 2018.

Just last week, the initial wave of tariffs briefly worried industry onlookers (myself included!) only for those concerns to be dismissed as premature. After all, what kind of fool anticipates that tariffs on pharmaceuticals would happen when the administration said they would?

Jon Keegan6m

Meta shares rally as Jefferies says it’s a bargain relative to Mag 7 peers

Shares of Meta rallied over 5% today, as Jefferies analyst Brent Thill doubled down on his buy rating for the company, calling the stock a relative bargain compared to its Magnificent 7 peers. The analyst set a price target of $910, well above the $645 where the stock is trading today.

News out of Davos this week that Meta’s first models from its revamped AI teams are “very good” align with Thill’s argument that the company is well positioned to get back in the AI race with the “all-star model,” which is expected to be released in the first half of the year.

Recent cuts to its Reality Labs also signal that the company is focusing its spending where it matters. The Jefferies note also said the recent monetization of Threads via ads will help boost revenue.

Next week, Meta reports its fourth-quarter earnings, and Thill expects that even if Meta raises its 2026 capex outlook, investors won’t be spooked, as the company has been clear that spending may continue to be high.

Matt Phillips2h

Arista Networks rips higher amid jump in call buying

Arista Networks, a maker of switches and other networking equipment used in AI data centers, was on track for its best day of the new year on Thursday as options traders went bullish on the stock.

As of around 11 a.m. ET, there was nearly twice as much call buying in Arista than its 10-day moving average for a full day of activity. Buying call options to make leveraged bets on price increases has been a favorite trading tactic of retail traders in recent years.

Otherwise, there weren’t clear headlines tied to today’s outsized move, but the stock has been getting attention lately: in a note published earlier this month, Goldman Sachs analysts spotlighted Arista as a top tactical trade for earnings season, saying the shares — which they rate a “buy” — could rise 20% over the next year.

“ANET is well positioned amidst ongoing data center spending growth, where its position as a best of breed provider of networking equipment should advantage the company, particularly as data center networks become increasingly complex,” Goldman analysts wrote in the January 8 report.

And recent reports also say Microsoft — which accounted for 20% of Arista’s revenue in 2024, according to Goldman Sachs — is planning a massive expansion of its Wisconsin data center project.

Arista stock did get a lift following the release of solid US economic numbers at 8:30 a.m. that seemed fairly specific to Arista itself. (There was no similar bounce from competitors like Cisco or Hewlett-Packard.)

Microsoft receives preliminary approval for $13.3B data center expansion in Mount Pleasant - Milwaukee Business Journal

And recent reports also say Microsoft — which accounted for 20% of Arista’s revenue in 2024, according to Goldman Sachs — is planning a massive expansion of its Wisconsin data center project.

Luke Kawa3h

Investors just made a mammoth $133 billion flip from cash to stocks, per Goldman Sachs

It’s a dash from cash, with investors taking billions in dry powder and pouring that money into the stock market.

“We saw strong net flows into global equity funds last week, led by stronger inflows into US and EM equity funds (+$71 billion vs $2 billion in the previous week) — more than 35x-ed the flows,” wrote Goldman Sachs’ Gail Hafif, Brian Garrett, and Lee Coppersmith. “While equity flows increase, money market fund assets fell by $62 billion. This is the 3rd largest level in our dataset (!).”

The trio is bullish on US stocks, seeing “the case for contained selloffs coupled with relief rallies as the most likely path forward in the near term.”

Luke Kawa

Retail traders’ monthly appetite for stocks ascends to fresh record

“The current ‘new year’ momentum has been sustained and has now pushed retail activity to an all-time high on a rolling monthly basis,” according to JPMorgan.

BRITAIN-LONDON-FIREWORKS-NEW YEAR-CELEBRATION

J. Edward Moreno3h

Moderna extends rally on positive cancer vaccine results

Moderna has more than doubled since it announced on Tuesday that its cancer vaccine reduced the risk of relapse or death for melanoma patients.

The five-year data from a Phase 2b trial showed that Moderna’s vaccine, when used with Merck’s blockbuster treatment Keytruda, reduced the risk of recurrence or death by 49% compared with Keytruda alone. The news gave investors hope that Moderna, which is best known for quickly developing a COVID-19 vaccine, may soon have another lucrative product in its portfolio.

Last week, Moderna said it expects to report total 2025 revenue of $1.9 billion, on the high end of its latest guidance of between $1.6 billion and $2 billion, amid better-than-expected vaccination rates. As demand for the COVID-19 vaccine, its sole revenue-generating product, has tanked, the company has aggressively cut costs and focused on expanding its portfolio.

The combination of positive announcements early in the year has made Moderna the second-best performer in the S&P 500 Index in 2026, behind newfound AI darling Sandisk.