President Donald Trump on Tuesday unveiled sweeping plans to revive U.S. coal production to meet the nation's rising energy demands, marking a dramatic policy reversal from the climate-focused agendas of the Biden <a href="https://www.benzinga.com/topic/donald-trump">and Obama administrations.</a>



Meanwhile, Wall Street plunged deeper into negative territory as escalating tariff tensions with China reignited fears of a global economic slowdown.



"We're ending Joe Biden's war on beautiful clean coal once and for all," Trump declared. "We're going to reopen those plants, put miners back to work, and get approvals very fast."



Trump's order directs federal agencies to fast-track mining permits, slash environmental regulations, and expand coal leases on federal lands.



"Pound for pound, coal is the single most reliable, durable, secure, and powerful form of energy on Earth," the president added.



According to the U.S. Energy Information Administration, coal production in 2023 totaled 578 million short tons, less than half the 1.17 billion short tons produced at its peak in 2008. 



The decline, the EIA noted, has been driven by rising costs, tougher environmental rules, and increased competition from natural gas and renewables.



&#8220;We&#8217;ll be signing a bill to unleash the might of our beautiful clean coal industry in this country,&#8221; Trump said.



Shares of Peabody Energy Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BTU#NYSE">BTU</a>), the largest private-sector coal company in the world, rose 9% in after-hours trading, and Warrior Met Coal Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HCC#NYSE">HCC</a>) rose 6.5%.



<h3 class="wp-block-heading">Wall Street Selloff Deepened</h3>



While Trump was touting coal's comeback, Wall Street was in full-blown retreat. 



Major indexes erased hefty morning gains in a volatile session that saw risk sentiment collapse after White House Press Secretary Karoline Leavitt confirmed Trump's 104% retaliatory tariff on Chinese imports would go live at 12:01 a.m. ET Wednesday.



"China made a mistake by retaliating, and the president is punching back harder," Leavitt said, ruling out any delay or exemption to the tariffs.



The news sent a jolt through financial markets, reversing a sharp morning rally and pushing the S&amp;P 500 index to its lowest levels in a year.



The S&amp;P 500 closed at 4,892, down 1.57%, after having surged as much as 3.7% earlier in the session.



The Nasdaq 100 ended the day at 17,104, falling 1.95% from the previous close, despite hitting a 4.1% intraday gain during the morning rally.



The Dow Jones Industrial Average finished at 37,663, shedding 0.8%, after climbing as much as 2.5% at its session peak.



<h3 class="wp-block-heading">Mega-Cap Tech: From Rally To Rout</h3>



Among the Magnificent Seven, losses were led by Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), which closed down 5%, falling more than 9 percentage points from its intraday highs. 



Tesla Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>) ended 4.9% lower, while Amazon.com Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>) dropped 2.9%. 



The iShares Semiconductor ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SOXX#NASDAQ">SOXX</a>), which had surged more than 3% in morning trading, ended lower by 4%, signaling broad risk aversion toward chipmakers. AI darling Nvidia Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) closed 1.4% lower.



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<li><a href="https://www.benzinga.com/economics/macro-economic-events/25/04/44699965/biggest-tax-hike-since-1982-trumps-tariff-strategy-faces-harsh-economic-forecast">Biggest Tax Hike Since 1982? Trump&#8217;s Tariff Strategy Faces Harsh Economic Forecast</a></li>
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Trump Unleashes 'Beautiful Clean Coal' Policies As Wall Street Tanks, S&P 500 Hits 1-Year Low

Despite mounting political and <a href="https://www.benzinga.com/economics/macro-economic-events/25/04/44699965/biggest-tax-hike-since-1982-trumps-tariff-strategy-faces-harsh-economic-forecast">economic strain</a> between the U.S. and China, many American companies remain reluctant to scale back their operations in the world's second-largest economy.



What To Know: According to a new report commissioned by the U.S. Chamber of Commerce Foundation and <a href="https://www.wsj.com/world/china/many-u-s-companies-plan-to-keep-china-ties-survey-finds-906481c9">cited</a> by The Wall Street Journal, a majority of surveyed firms still see strategic value in maintaining or expanding their presence in China — even as they increasingly view it as their biggest geopolitical risk.



The report, based on surveys and interviews with nearly 200 businesses, highlights a disconnect between Washington's push for "selective decoupling" and corporate America's entrenched reliance on China's manufacturing capacity, skilled labor, and vast consumer market.



Read Also: <a href="https://www.benzinga.com/news/25/04/44699850/why-ishares-china-large-cap-etf-fxi-is-falling">Why iShares China Large-Cap ETF (FXI) Is Falling</a>



Per the WSJ, roughly 70% of participating U.S. Chamber members indicated plans to maintain or grow Chinese engagement, despite concerns over Beijing's tightening regulatory environment and the rising specter of conflict across the Taiwan Strait.



What Else: Those long-term worries came into sharper focus Tuesday after White House Press Secretary Karoline Leavitt confirmed that President Donald Trump's <a href="https://www.benzinga.com/economics/macro-economic-events/25/04/44698697/markets-reverse-gains-as-trumps-104-china-tariff-announcement-rattles-wall-street">104% tariff on Chinese imports</a> will take effect at 12:01 a.m. ET on Wednesday. "It was a mistake for China to retaliate," Leavitt said, reiterating the administration's hardline stance.



Financial markets quickly reversed early gains, with the SPDR S&amp;P 500 ETF Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NASDAQ">SPY</a>) closing down 1.7% and the SPDR Dow Jones Industrial Average ETF Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NASDAQ">DIA</a>) sliding 1.2% on Tuesday.



The tariff announcement dampened hopes of near-term trade resolution and heightened fears of broader economic fallout, <a href="https://www.benzinga.com/economics/macro-economic-events/25/04/44698697/markets-reverse-gains-as-trumps-104-china-tariff-announcement-rattles-wall-street">echoing concerns</a> raised earlier Tuesday by Chicago Fed President Austan Goolsbee regarding potential growth slowdowns linked to trade policy.



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<li><a href="https://www.benzinga.com/economics/macro-economic-events/25/04/44699965/biggest-tax-hike-since-1982-trumps-tariff-strategy-faces-harsh-economic-forecast">Biggest Tax Hike Since 1982? Trump&#8217;s Tariff Strategy Faces Harsh Economic Forecast</a></li>
</ul>



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US Companies Stick With China As Trump Tariffs Set To Take Effect: Report

BofA Securities analysts Bryan D. Spillane, Lisa K. Lewandowski and Peter T. Galbo have put forward on Tuesday their research findings on consumer staple companies in the face of a potential recession.



The analysts said consumer staples have historically outperformed the S&amp;P 500 in most recent recessions, suggesting a defensive edge.



However, the analysts warned that current conditions, such as lingering high prices and weak volume growth, may limit their resilience in a future downturn.



Also Read: <a target="_blank" href="https://www.benzinga.com/tech/25/04/44695622/amazon-touts-ai-milestone-says-new-model-outshines-gpt-4o-in-real-time-speech" rel="noreferrer noopener">Amazon Touts AI Milestone, Says New Model Outshines GPT-4o In Real-Time Speech</a>



Still, their limited exposure to new tariffs could make the sector more appealing than others, potentially helping sustain valuation multiples.



During recessions, the Consumer Staples sector stock prices are primarily influenced by earnings per share (EPS) rather than sales growth.



Analysis shows that forward EPS estimates account for over 90% of stock price movement across key subsectors like Beverages, Household &amp; Personal Care (HPC), Packaged Food, and Tobacco, with the correlation being the tightest Beverages and HPC.



The analysts noted that this highlights the critical importance of earnings strength when evaluating stock performance in uncertain economic conditions.



A review of six past recessions reveals that certain Consumer Staples stocks consistently outperformed the S&amp;P 500.



Campbell Soup Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CPB#NYSE">CPB</a>), Colgate-Palmolive Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CL#NYSE">CL</a>), General Mills Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GIS#NYSE">GIS</a>), McCormick &amp; Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MKC#NYSE">MKC</a>), PepsiCo Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PEP#NASDAQ">PEP</a>), and Hormel Foods Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HRL#NYSE">HRL</a>) each posted a 100% success rate in outperforming the index during those downturns.



In the last four recessions with the most comprehensive data, McCormick, General Mills, and Church &amp; Dwight Co. Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CHD#NYSE">CHD</a>) delivered the strongest relative performance.



Top-performing Consumer Staples stocks in a potential downturn will likely share three traits: profit flexibility to offset revenue pressure and rising costs, strong U.S. manufacturing presence to limit tariff-related inflation, and solid balance sheets capable of sustaining share buybacks to boost earnings per share.



Analysts see McCormick, Coca-Cola Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KO#NYSE">KO</a>) and Philip Morris International Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PM#NYSE">PM</a>) as well-defended, with Keurig Dr Pepper Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/KDP#NASDAQ">KDP</a>), Molson Coors Beverage Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TAP#NYSE">TAP</a>) and Altria Group Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MO#NYSE">MO</a>) in the next tier of potential outperformers.



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This Beverage Maker, Tobacco Company And Packaged Food Giant Outshine In A Recession

As President Donald Trump initiated a tariff plan that many <a href="https://www.benzinga.com/25/04/44665530/jamie-dimon-once-a-tariff-supporter-warns-trumps-new-policy-could-slow-us-growth-fuel-inflation-the-quicker-the-issue-is-resolved-the-better">critics label stagflationary</a>, key figures in the Federal Reserve, including Mary Daly, president of the Federal Reserve Bank of San Francisco, signaled that the central bank might <a href="https://www.benzinga.com/economics/macro-economic-events/25/04/44667104/speculators-raise-wagers-on-fed-emergency-rate-cuts-as-theories-of-self-induced-crash-gather-pace">delay further rate cuts</a>.



Daly, speaking at a moderated discussion at Brigham Young University on Tuesday, said she is comfortable with current interest rate levels, <a href="https://www.bloomberg.com/news/articles/2025-04-08/fed-s-daly-says-policy-is-in-good-place-amid-trade-uncertainty">reported </a>Bloomberg.



"We cut the interest rate by 100 basis points last year. That puts policy in a good place to stay modestly restrictive — keep inflation coming down — but not so restrictive that the economy is vulnerable," Daly told attendees.



Daly participates in the rate-setting Federal Open Market Committee as a rotating voting member. The Missouri native served on the committee in 2024 and is not currently a sitting member.



Daly said she thinks the committee should be careful when deviating from its current path.



"So, with growth good and policy in a good place, we've built the time and the ability to just tread slowly and tread carefully," she said.



Meanwhile, Fed Chair Jerome Powell has rebuked Trump&#8217;s overtures to policymakers to cut rates. Speaking at the Society for Advancing Business Editing and Writing conference on April 4, Powell said it&#8217;s &#8220;too soon&#8221; to assess a change in policy given the tariffs&#8217; impact on inflation.



According to the Federal Reserve Bank of St. Louis, the federal funds rate is currently 4.33%, lower than the 2024 peak of 5.33% but substantially higher than the low interest rate environment observed in the 2010s.



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Federal Reserve

San Francisco Fed's Mary Daly Says Central Bank Should 'Tread Slowly And Tread Carefully'

Wall Street's early rally lost steam and flipped into negative territory Tuesday afternoon after White House Press Secretary Karoline Leavitt confirmed that President Donald Trump's retaliatory 104% tariff on Chinese imports would take <a href="https://www.benzinga.com/topic/donald-trump">effect at 12:01 a.m. ET Wednesday. </a>



Her remarks triggered a sharp deterioration in market sentiment and reignited fears of a global trade escalation.



By 2:15 p.m. ET, the S&amp;P 500 – as tracked by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) – had slipped 0.3%, the Russell 2000 fell 1.3%, and the Nasdaq 100 was barely positive, up just 0.1%. The Dow Jones Industrial Average held onto a 0.3% gain, though upside momentum was fading fast.



<h3 class="wp-block-heading">What Triggered The Market Turnaround?</h3>



Leavitt&#8217;s remarks delivered clarity — and a hard deadline — for Trump&#8217;s escalating tariff campaign.



"There will be 104% tariffs going into effect on China tonight at midnight," Leavitt said. 



"It was a mistake for China to retaliate, and the president is punching back harder."



The press secretary echoed Trump&#8217;s hardline stance, stating that "America does not need other countries as much as other countries need us," and emphasized that the president believes China wants to make a deal, but doesn't know how to start.



While earlier this week Trump hinted at openness to negotiations, Tuesday's update suggested no de-escalation in sight.



Leavitt insisted that tariffs are not up for delay or exemption, rejecting suggestions that market turmoil had prompted a policy shift. 



She confirmed that the administration expects these trade deals and tariffs to generate "trillions of dollars in revenue" while incentivizing onshoring and closing U.S. trade deficits.



Earlier on Tuesday, Chicago Fed President Austan Goolsbee warned that the economic consequences of tariffs may already be materializing.



"We can't wait until the end of the quarter plus one month to find out that investment has dropped off and GDP growth is shrinking," Goolsbee said, calling for timelier insight into the drag from protectionist policy.



<h3 class="wp-block-heading">Tech Stocks Lose Steam, Semis Cool Off</h3>



After leading the rally earlier in the session, tech stocks began to falter. 



Among the Magnificent Seven, Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>) turned sharply lower, down 2.33%, while Tesla Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>) shed 0.85% and Amazon.com Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>) slipped 0.32%.



Only Nvidia Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) continued to hold onto gains, up 2.43%.



Semiconductor stocks, which had gained over 3.3% by midday, then flipped to losses, with the iShares Semiconductor ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SOXX#NASDAQ">SOXX</a>) down 0.4%.



Defensive sectors such as utilities and communications hovered near flat, while materials and consumer discretionary posted the steepest losses amid fears of disrupted global supply chains.



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Markets Reverse Gains As Trump's 104% China Tariff Announcement Rattles Wall Street

A bold bet on tariffs as a self-funded strategy for future tax cuts could backfire, as President Donald Trump's sweeping import duties promise massive tax revenues, but at the cost of slower growth <a href="https://www.benzinga.com/news/econ-s">and higher consumer pain.</a>



In a recent report, the <a href="https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/">Tax Foundation</a> analyzed the economic fallout of Trump's tariff plan announced on April 2, estimating it would trigger the biggest tax increase since 1982 and shrink gross domestic product by 0.7% over the next decade, even before accounting for foreign retaliation.



<h3 class="wp-block-heading">What's The Economic Impact Of Trump's New Tariff Push?</h3>



The new tariff proposal would raise the average tariff rate on all imports from 2.5% to 16.5% by 2025, a level unseen since the Great Depression era in 1937. 



According to the Tax Foundation, the plan comprises a universal tariff policy and prior tariff escalations, together projected to generate $2.9 trillion in federal revenue over 10 years.



"The 2025 Trump tariffs are larger than the tax increases enacted under Presidents George H.W. Bush, Bill Clinton, and Barack Obama,&#8221; the report stated.



<h3 class="wp-block-heading">A Steep Cost For US Households</h3>



What boosts the Treasury's balance sheet drains the wallets of American families. Tariffs are essentially taxes on imports, and those costs typically fall on U.S. consumers and businesses. 



The think tank estimates the average U.S. household would pay over $1,900 more in 2025, with after-tax income declining by 1.9%.



"Tariffs raise prices and reduce available quantities of goods and services for U.S. businesses and consumers, resulting in lower income, reduced employment, and lower economic output," the report said.



Imports are also expected to plunge by more than $800 billion in 2025, a 25% drop, which could upend global supply chains and inflate prices of goods that rely on foreign components.



"Economists generally agree free trade increases the level of economic output and income," the report said. 



<h3 class="wp-block-heading">A Shrinking Incentive To Work And Invest</h3>



The economic damage extends beyond just higher consumer prices. One major effect comes from rising production costs. As tariffs raise the price of imported parts and raw materials, U.S. businesses pass those increases on to consumers. The resulting inflation erodes the real return on both labor and capital, ultimately discouraging work and investment.



"Because higher prices would reduce the return to labor and capital, they would incentivize Americans to work and invest less, leading to lower output," the Foundation said.



Another, more subtle risk lies in the currency market. A stronger U.S. dollar may offset some price inflation for American consumers, but it would also make U.S. exports less competitive globally. 



That, in turn, could reduce revenue for exporters, suppress job creation, and further dampen economic output.



Whether through rising prices or a stronger currency, the long-run effects from tariffs remain dire: lower growth, weaker income gains, and reduced economic dynamism.



Read Next: 



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<li><a href="https://www.benzinga.com/25/04/44698325/trump-tariff-strategy-self-inflicted-market-debacle-says-wedbush-analyst">Trump Tariff Strategy Creates &#8216;Self-Inflicted Market Debacle&#8217;: Analyst</a></li>
</ul>



Photo: Shutterstock

Biggest Tax Hike Since 1982? Trump's Tariff Strategy Faces Harsh Economic Forecast

On Friday, China&#8217;s finance ministry announced a 34%&nbsp;tariff on all goods imported&nbsp;from the U.S., effective April 10, in response to the U.S. administration&#8217;s 54% duties imposed by the Trump-led administration during the so-called <a target="_blank" href="https://www.benzinga.com/topic/tariffs" rel="noreferrer noopener">Liberation Day last week</a>.



Trump has&nbsp;threatened to impose an additional 50% duty&nbsp;on Chinese imports if Beijing does not <a target="_blank" href="https://www.benzinga.com/news/global/25/04/44679330/will-trump-impose-higher-tariffs-on-china-crypto-bettors-now-see-an-80-possibility" rel="noreferrer noopener">drop the 34% tariffs</a>.



On Monday, Trump hinted at more openness in trade negotiations with China after threatening to impose a 50% tariff on top of the 54% already levied.



&#8220;China also wants to make a deal badly, but they don&#8217;t know how to get it started,&#8221; <a target="_blank" href="https://www.benzinga.com/economics/macro-economic-events/25/04/44686417/wall-street-soars-as-trump-teases-trade-deals-magnificent-seven-add-over-500-billion-in-market-value" rel="noreferrer noopener">Trump wrote</a>.



Wedbush analyst Daniel Ives writes that &#8220;saying we can just make this in the USA&#8221; understates how complex the supply chain in Asia really is—and how electronics, chips, semiconductors, hardware, and smartphones have been built for U.S. consumers over the past 30 years.&#8221;



Also Read: <a target="_blank" href="https://www.benzinga.com/economics/macro-economic-events/25/04/44686417/wall-street-soars-as-trump-teases-trade-deals-magnificent-seven-add-over-500-billion-in-market-value" rel="noreferrer noopener">Wall Street Soars As Trump Teases Trade Deals, Magnificent 7 Add Over $500 Billion In Market Value</a>



&#8220;The reason I believe this is the biggest debacle ever seen in the markets is because its purely self-inflicted by Trump, and the logic about &#8220;near-term pain&#8221; is being way miscalculated, which speaks to our concern. It&#8217;s very easy to say &#8220;build in America&#8221; behind a microphone in the Beltway&#8230;the reality is so much different it&#8217;s almost a scary concept,&#8221; says Daniel Ives.



For U.S. tech/auto companies, tariffs are like flipping a boat with no life rafts.



The list of vulnerable companies is long and includes Apple Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), Nvidia Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>), Microsoft Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>), General Motors Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GM#NYSE">GM</a>), and Advanced Micro Devices, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMD#NASDAQ">AMD</a>), among others.



Building a factory in the U.S. takes four to five years. The analyst explains that high labor costs and other expenses in the U.S. don&#8217;t align with how modern supply chains are designed to operate. This makes it hard to compete with Chinese tech giants like BYD Co Ltd (OTC:<a class="ticker" href="https://www.benzinga.com/stock/BYDDF#OTC">BYDDF</a>) (OTC:<a class="ticker" href="https://www.benzinga.com/stock/BYDDY#OTC">BYDDY</a>), Huawei, Alibaba Group Holding Limited (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BABA#NYSE">BABA</a>), Tencent Holdings Ltd (OTC:<a class="ticker" href="https://www.benzinga.com/stock/TCEHY#OTC">TCEHY</a>) (OTC:<a class="ticker" href="https://www.benzinga.com/stock/TCTZF#OTC">TCTZF</a>)—and many others—a big opportunity to expand their global reach.



Also, much of the key technology and intellectual property behind these supply chains is already deeply rooted in Asia. So, any effort to shift production to the U.S. would take at least a decade to make a real impact, Wedbush analyst writes.



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Trump Tariff Strategy Creates 'Self-Inflicted Market Debacle': Analyst

Spruce Point Capital Management&nbsp;has announced a short position against Monster Beverage Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MNST#NASDAQ">MNST</a>) as the short seller sees <a href="https://www.benzinga.com/quote/MNST">25% to 40% downside risk</a>.



What To Know: After conducting a forensic financial and accounting review, <a href="https://www.benzinga.com/topic/short-sellers">short seller</a> Spruce Point raised concerns about the sustainability of Monster&#8217;s recent financial performance and the accuracy of its accounting and financial reporting in a new short report released Tuesday. 



&#8220;Changing consumer preferences, an evolving regulatory landscape, and pressures to reduce government supported programs for unhealthy foods leaves Monster vulnerable to escalating threats,&#8221; the short seller said.



&#8220;We believe Monster is likely aware of these challenges and is acting in a manner to combat these issues. However, we also believe that Monster may be taking aggressive and/or non-transparent actions that are not in the best interests of investors.&#8221;



Benzinga has reached out to Monster Beverage for comment on the report. 



Spruce Point believes Monster Beverage shares are fully valued and offer poor risk/reward from current levels. The short seller noted that insiders have been accelerating their pace of stock sales and more than 50% of analysts don&#8217;t have a &#8220;Buy&#8221; rating on the stock.



Monster also trades with an &#8220;irrational&#8221; premium compared to Coca-Cola Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KO#NYSE">KO</a>) despite being highly dependent on the company for distribution, the short seller said. Monster has a price-to-earnings ratio of approximately 30.8, according to <a href="http://pro.benzinga.com">Benzinga Pro</a>. Meanwhile, Coca-Cola trades with a price-to-earnings ratio of approximately 20. 



Furthermore, Spruce Point alleged that Monster&#8217;s relationship with Coke is &#8220;not healthy&#8221; and a potential takeover deal is not in the cards. The short seller said it uncovered evidence of a financial strain between the two companies starting in 2022. 



Check This Out: <a href="https://www.benzinga.com/economics/macro-economic-events/25/04/44697600/stocks-rebound-chipmakers-soar-on-trade-deal-hopes-bitcoin-lags-whats-driving-markets-tuesday#google_vignette">Stocks Rebound, Chipmakers Soar On Trade Deal Hopes, Bitcoin Lags: What&#8217;s Driving Markets Tuesday?</a>



Spruce Point also said it takes issue with how Monster is reporting sales for its Tour Water brand. Although it&#8217;s not an energy drink product, the company reported its revenue in the Monster Energy Drinks segment, which could &#8220;potentially be a lever to inflate energy drink organic sales.&#8221;



&#8220;Moreover, Monster says it is distributed through the Alcohol Brands segment, which casts further doubt on the soundness of its revenue recognition choice,&#8221; the short seller said. 



Spruce Point went on to raise concerns around margins on sales through Amazon.com Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>), production inefficiencies, increasing competition and social media brand stagnation. 



Spruce Point issued a &#8220;Strong Sell&#8221; opinion on Monster shares as the short seller expects Monster to underperform the food and beverage industry along with the broader equity market moving forward. 



MNST Price Action: <a href="http://benzinga.com/quote/mnst">Monster Beverage shares</a> were down 2.6% at $55.60 at the time of publication Tuesday, according to <a href="http://pro.benzinga.com">Benzinga Pro</a>.



Read Next:



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<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/25/04/44696168/apple-is-a-buying-opportunity-again-as-key-valuation-level-flashes-green-bank-of-america-says">Apple Is A &#8216;Buying Opportunity&#8217; Again As Key Valuation Level Flashes Green, Bank Of America Says</a></li>
</ul>



Photo: <a href="https://www.shutterstock.com/g/nawawi+mohamed">kiraziku2u</a>/Shutterstock.

Short Sellers

Short Ideas

MNST

Short Seller Sees 25% To 40% Downside In Monster Beverage Shares: 'Vulnerable To Escalating Threats'

After a brutal sell-off that wiped out a fifth of Apple Inc.'s (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>) market value in less than a week, one of Wall Street's most prominent banks believes history is flashing a strong buy signal for the tech titan and historical data suggests <a href="https://www.benzinga.com/tech">they might be right.</a>



In a note shared Tuesday, Bank of America analyst Wamsi Mohan said Apple's risk-reward profile is now skewing favorably for long-term investors, thanks to a rare compression in the stock's valuation multiple that has previously signaled strong future returns.



<h1 class="wp-block-heading">Valuation Compression Signals Opportunity For AAPL Shares</h1>



Apple shares are down 25.5% year to date and have fallen 23.5% since their last earnings report, underperforming the S&amp;P 500 index, which declined 13.7% and 16.6% in the same respective periods. 



Since President Donald Trump&#8217;s tariffs took affect on April 2, the iPhone maker lost 17%, more than double the decline suffered by the S&amp;P 500 index.



Geopolitical tensions around U.S.-China tariffs and delays in rolling out Apple Intelligence features on Siri have contributed to the decline.



Yet, Mohan said Apple's current forward price-to-earnings (P/E) ratio of about 21 times marks a key inflection point. 



&#8220;We view AAPL&#8217;s current c.21x PE as an enhanced buying opportunity,&#8221; he said, referencing historical data that suggests Apple typically performs well after similar valuation dips.



The forward P/E ratio reflects investor expectations of a company's earnings growth. When the ratio drops below 25 times, as it has now, Apple's stock has historically delivered compelling returns in the months that follow.



<h1 class="wp-block-heading">What Happens When Apple's P/E Falls Below 25?</h1>



Apple&#8217;s stock has historically delivered solid returns in the months following a forward P/E compression below 25x, as Bank of America analysis shows.



On average, shares rose 7% after three months, 8% after six months, 14% after nine months, and 17% after 12 months.



After the March 2024 P/E compression, Apple shares surged 36% in 12 months. 



The October 2023 instance yielded a 34% return over the same period. In contrast, downside risk remained relatively muted, with worst-case three-month declines of 5% to 11%.



Only once did Apple shares continue to decline 12 months after the forward P/E ratio dropped below 25x — following the April 22, 2022 event, when the stock fell 12% over the subsequent year.



<figure class="wp-block-table is-style-stripes"><table style="overflow:auto; height: 90px; display: block;"><thead><tr><th>Date P/E &lt; 25x</th><th>Price at Compression</th><th>+3 Months</th><th>% Change</th><th>+6 Months</th><th>% Change</th><th>+9 Months</th><th>% Change</th><th>+12 Months</th><th>% Change</th></tr></thead><tbody><tr><td>04/30/2021</td><td>$131.46</td><td>$145.86</td><td>+11%</td><td>$149.80</td><td>+14%</td><td>$157.65</td><td>+20%</td><td>$170.33</td><td>+30%</td></tr><tr><td>09/30/2021</td><td>$141.50</td><td>$178.20</td><td>+26%</td><td>$174.61</td><td>+23%</td><td>$142.48</td><td>+1%</td><td>$165.02</td><td>+16%</td></tr><tr><td>04/22/2022</td><td>$161.79</td><td>$154.09</td><td>-5%</td><td>$136.72</td><td>-15%</td><td>$180.19</td><td>+12%</td><td>$142.48</td><td>-12%</td></tr><tr><td>08/29/2022</td><td>$161.38</td><td>$144.22</td><td>-11%</td><td>$147.27</td><td>-9%</td><td>$147.92</td><td>-8%</td><td>$180.19</td><td>+12%</td></tr><tr><td>10/02/2023</td><td>$173.75</td><td>$192.53</td><td>+11%</td><td>$175.43</td><td>+1%</td><td>$233.00</td><td>+34%</td><td>$233.00</td><td>+34%</td></tr><tr><td>03/04/2024</td><td>$175.10</td><td>$194.03</td><td>+11%</td><td>$216.75</td><td>+25%</td><td>$229.00</td><td>+31%</td><td>$238.03</td><td>+36%</td></tr><tr><td>04/03/2025</td><td>$203.19</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr></tbody></table></figure>



<h1 class="wp-block-heading">What&#8217;s Different This Time?</h1>



Some investors may be concerned that this time is different, given growing geopolitical friction between the U.S. and China. 



With Apple heavily dependent on Chinese manufacturing and facing potential tariffs, the risk to earnings estimates remains elevated.



Still, Bank of America sees strategic levers Apple can pull to counteract these risks. 



&#8220;We note that Apple has many options to mitigate downside risk to estimates. These include: sourcing more iPhones from India, applying higher pricing in products/services, pressuring its supply chain for better economics, introducing new products at higher price points and changing cadence of product releases,&#8221; the report says. 



Read now: 



<ul>
<li><a href="https://www.benzinga.com/general/education/25/04/44674343/these-5-sp-500-winners-held-strong-in-q1-can-the-rally-continue">These 5 S&amp;P 500 Winners Held Strong In Q1 — Can The Rally Continue?</a></li>
</ul>



Photo: Shutterstock

Apple Is A 'Buying Opportunity' Again As Key Valuation Level Flashes Green, Bank Of America Says

Treasury Secretary Scott Bessent on Tuesday characterized <a href="https://www.benzinga.com/markets/25/04/44677506/china-resolutely-opposes-trumps-50-tariff-threat-vows-countermeasures-as-trade-tensions-jolt-markets">China&#8217;s retaliatory trade actions</a> as a &#8220;big mistake,&#8221; saying the nation is &#8220;playing with a losing hand&#8221; in the escalating tariff conflict with the United States. 



The Details: Bessent appeared on CNBC's Squawk Box where he <a href="https://www.cnbc.com/2025/04/08/treasury-secretary-bessent-says-chinas-escalation-was-big-mistake-country-playing-with-losing-hand.html">addressed</a> China's recent comments that it will "fight to the end" in a trade war with the U.S. 



"I think it was a big mistake, this Chinese escalation, because they're playing with a pair of twos," Bessent said.



&nbsp;"What do we lose by the Chinese raising tariffs on us? We export one-fifth to them of what they export to us, so that is a losing hand for them," he added.&nbsp;



Read Next: <a href="https://www.benzinga.com/25/04/44667862/oil-crashes-to-60-per-barrel-as-recession-fears-grow">Oil Crashes To $60 Per Barrel As Global Recession Fears Grow&nbsp;</a>



Bessent's comments come after President Donald Trump said he will slap another 50% charge on Chinese imports if the 34% retaliatory tariff on U.S. goods is not withdrawn.&nbsp;



Beijing responded on Monday with the following comments:&nbsp;



"The U.S. threat to escalate tariffs on China is a mistake on top of a mistake," the Commerce Ministry said in a <a href="https://www.benzinga.com/markets/25/04/44677506/china-resolutely-opposes-trumps-50-tariff-threat-vows-countermeasures-as-trade-tensions-jolt-markets">statement translated</a> by CNBC. "China will never accept it. If the U.S. insists on its own way, China will fight to the end."



Mao Zhenhua, an economics professor at the University of Hong Kong, said that China's comments show the nation is "ready to act," as<a href="https://www.scmp.com/economy/global-economy/article/3305666/brace-impact-chinese-economist-warns-gloves-are-us-trade-war?utm_medium=email&amp;utm_source=cm&amp;utm_campaign=enlz-today_international&amp;utm_content=20250408&amp;tpcc=enlz-today_international&amp;UUID=69b4a47a-ff60-4b7a-b889-784cba25513c&amp;next_article_id=3305526&amp;article_id_list=3305666,3305526&amp;tc=4"> reported</a> by the South China Morning Post. 



"The probability for both sides to meet for talks or even a turnaround is very small," Mao added, warning all parties to "brace for impact".



What Else: Bessent also told CNBC that Japan is eager to negotiate on tariffs and the White House expects many other countries to come to the table as well.&nbsp;&nbsp;



"I think you are going to see some very large countries with large trade deficits come forward very quickly," Bessent said. "If they come to the table with solid proposals, I think we can end up with some good deals."



Markets React: All 3 major indexes opened Tuesday's session in the green as Wall Street felt some relief amid hope for tariff deals.&nbsp;&nbsp;



The SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), tracking the S&amp;P 500, was up 3% at $519.79 and the Invesco QQQ Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), tracking the Nasdaq 100 index, was up 3.3% at $437.66.&nbsp;&nbsp;



Some U.S.-listed Chinese stocks traded lower despite the broad market rally, including Alibaba Group Holding Limited (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BABA#NYSE">BABA</a>) and PDD Holdings Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PDD#NASDAQ">PDD</a>).&nbsp;



Read Next:&nbsp;



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<li><a href="https://www.benzinga.com/news/large-cap/25/03/44537429/cathie-wood-doubles-down-on-2600-tesla-stock-price-prediction">Cathie Wood Doubles Down On $2,600 Tesla Stock Price Prediction</a></li>
</ul>



Image: Shutterstock

Politics

Treasury Secretary Bessent Says China Holds 'Losing Hand' In Tariff Escalation

U.S. stocks surged in early trading Tuesday after President Donald Trump hinted at progress on some trade deals with key trading partners, easing fears of global trade disruption stemming <a href="https://www.benzinga.com/topic/tariffs">from recent tariff announcements.</a>



The S&amp;P 500 index, as tracked by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), surged 3% by 9:45 a.m. in New York, clawing back some of the 10% it had lost over the previous four sessions.



Other major indices also showed robust gains, with the tech-heavy Nasdaq 100 – tracked by the Invesco QQQ Trust, Series 1 (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) – outperforming counterparts amid broad-based rallies in mega-cap and semiconductor stocks.



<figure class="wp-block-table is-style-stripes"><table style="overflow:auto; height: 90px; display: block;"><tbody><tr><td>Major Indices</td><td>Price</td><td>Chg</td><td>%</td></tr><tr><td>Nasdaq 100</td><td>18,025.43</td><td>+594.75</td><td>3.4%</td></tr><tr><td>Dow Jones</td><td>39,121.15</td><td>+1,155.55</td><td>3.0%</td></tr><tr><td>S&amp;P 500</td><td>5,213.82</td><td>+151.57</td><td>3.0%</td></tr><tr><td>Russell 2000</td><td>1,858.95</td><td>+48.84</td><td>2.7%</td></tr></tbody></table><figcaption class="wp-element-caption">Updated at 9:45 a.m. ET</figcaption></figure>



After suffering steep losses in recent sessions, investors poured back into financials, tech, and consumer discretionary, which were the top-performing sectors on Tuesday. 



Semiconductors were the standout industry group, with the iShares Semiconductor ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SOXX#NASDAQ">SOXX</a>) rallying 4.5%.



<figure class="wp-block-table is-style-stripes"><table style="overflow:auto; height: 90px; display: block;"><tbody><tr><td>S&amp;P Sector ETFs</td><td>%</td></tr><tr><td>Financial Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLF#NYSE">XLF</a>)</td><td>4.0%</td></tr><tr><td>Technology Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLK#NYSE">XLK</a>)</td><td>3.8%</td></tr><tr><td>Consumer Discretionary&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLY#NYSE">XLY</a>)</td><td>3.0%</td></tr><tr><td>Communication Services Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLC#NYSE">XLC</a>)</td><td>2.9%</td></tr><tr><td>Health Care&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLV#NYSE">XLV</a>)</td><td>2.7%</td></tr><tr><td>Industrials&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLI#NYSE">XLI</a>)</td><td>2.7%</td></tr><tr><td>Energy&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>)</td><td>1.8%</td></tr><tr><td>Real Estate&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLRE#NYSE">XLRE</a>)</td><td>1.4%</td></tr><tr><td>Materials&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLB#NYSE">XLB</a>)</td><td>1.4%</td></tr><tr><td>Utilities Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLU#NYSE">XLU</a>)</td><td>1.3%</td></tr><tr><td>Consumer Staples&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLP#NYSE">XLP</a>)</td><td>1.2%</td></tr></tbody></table></figure>



<h3 class="wp-block-heading">Trump Sparks Optimism With Trade Talk Blitz</h3>



The catalyst behind the rally was a lengthy post on Truth Social by Trump, in which he described a "great call" with South Korea's acting president. 



The president said South Korea is sending a "top team" to the U.S. for negotiations, calling the process &#8220;one-stop shopping&#8221; for trade and military agreements.



In a <a href="https://edition.cnn.com/2025/04/08/asia/south-korea-acting-president-han-interview-intl-hnk/index.html">CNN</a> interview, South Korea&#8217;s acting president confirmed the country would not align with China and Japan to counter U.S. tariffs. 



Seoul faces 25% tariffs under Trump's global tariff rollout. Instead, it aims to strike a bilateral agreement with the U.S. to avoid a blow to its export-driven economy.



Trump also hinted at more openness in trade negotiations with China after threatening Monday to impose a 50% tariff on top of the 54% already levied.



&#8220;China also wants to make a deal, badly, but they don&#8217;t know how to get it started,&#8221; Trump wrote.



&#8220;We are waiting for their [China's] call. It will happen!&#8221; he added, suggesting renewed momentum on U.S.-China trade talks.



Senior White House economic adviser Kevin Hassett echoed the optimism, telling Fox News that the Trump administration is focusing on countries with "large trade deficits" with the U.S. He emphasized that "fair and reciprocal trade" remains the administration&#8217;s goal.



<h3 class="wp-block-heading">Mega-cap stocks (S&amp;P 100): Top 7 performers</h3>



Among S&amp;P 100 companies, CVS Health Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CVS#NYSE">CVS</a>) led gains with a 9.26% surge, followed by Broadcom Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AVGO#NASDAQ">AVGO</a>) and UnitedHealth Group Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UNH#NYSE">UNH</a>).



<figure class="wp-block-table"><table style="overflow:auto; height: 90px; display: block;"><thead><tr><th>Company</th><th>Last</th><th>% Change</th></tr></thead><tbody><tr><td>CVS Health Corp. </td><td>69.76</td><td>+9.26%</td></tr><tr><td>Broadcom Inc.</td><td>168.07</td><td>+9.04%</td></tr><tr><td>UnitedHealth Group Inc. </td><td>563.81</td><td>+7.45%</td></tr><tr><td>NVIDIA Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>)</td><td>104.71</td><td>+7.24%</td></tr><tr><td>Meta Platforms Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>)</td><td>545.01</td><td>+5.57%</td></tr><tr><td>Tesla Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>)</td><td>246.28</td><td>+5.57%</td></tr><tr><td>JPMorgan Chase &amp; Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JPM#NYSE">JPM</a>)</td><td>226.30</td><td>+5.53%</td></tr></tbody></table></figure>



The biggest market-moving headline of the session was the explosive increase in market capitalization among the Magnificent Seven — Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), Microsoft Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>), Amazon.com Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>), Alphabet Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOGL#NASDAQ">GOOGL</a>), Meta Platforms Inc., Tesla Inc., and NVIDIA Corp. — which collectively added over $564 billion in market value.



<figure class="wp-block-table"><table style="overflow:auto; height: 90px; display: block;"><tbody><tr><td>Company</td><td>Market Cap gain</td></tr><tr><td>NVIDIA</td><td>$165.82 B</td></tr><tr><td>Apple</td><td>$92.40 B</td></tr><tr><td>Microsoft</td><td>$85.39 B</td></tr><tr><td>Amazon</td><td>$70.02 B</td></tr><tr><td>Meta Platforms </td><td>$67.36 B</td></tr><tr><td>Alphabet (Google)</td><td>$48.48 B</td></tr><tr><td>Tesla</td><td>$35.19 B</td></tr></tbody><tfoot><tr><td>Total Market Cap Gain </td><td> $564.66 billion</td></tr></tfoot></table></figure>



<h3 class="wp-block-heading">Nasdaq 100: Standout Performers</h3>



AppLovin Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/APP#NASDAQ">APP</a>) was the top gainer in the Nasdaq 100, soaring 10.62%, while Marvell Technology Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MRVL#NASDAQ">MRVL</a>) and Broadcom Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AVGO#NASDAQ">AVGO</a>) followed with strong moves.



<figure class="wp-block-table is-style-stripes"><table style="overflow:auto; height: 90px; display: block;"><thead><tr><th>Company</th><th>Last</th><th>% Change</th></tr></thead><tbody><tr><td>AppLovin Corp. </td><td>256.89</td><td>+10.62%</td></tr><tr><td>Marvell Technology Inc. </td><td>55.76</td><td>+9.34%</td></tr><tr><td>Broadcom Inc. </td><td>168.19</td><td>+9.12%</td></tr><tr><td>Palantir Technologies Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PLTR#NYSE">PLTR</a>)</td><td>84.79</td><td>+8.93%</td></tr><tr><td>Arm Holdings plc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ARM#NASDAQ">ARM</a>)</td><td>95.91</td><td>+8.21%</td></tr><tr><td>NVIDIA Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>)</td><td>104.65</td><td>+7.18%</td></tr><tr><td>MercadoLibre Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MELI#NASDAQ">MELI</a>)</td><td>1,921.14</td><td>+7.04%</td></tr></tbody></table></figure>



Read now: 



<ul>
<li><a href="https://www.benzinga.com/news/global/25/04/44685614/treasury-secretary-bessent-says-china-holds-losing-hand-in-tariff-escalation">Treasury Secretary Bessent Says China Holds &#8216;Losing Hand&#8217; In Tariff Escalation</a></li>
</ul>



Image created using photos from Shutterstock.

AVGO

GOOGL

MELI

MRVL

PLTR

XLRE

Wall Street Soars As Trump Teases Trade Deals, Magnificent 7 Add Over $500 Billion In Market Value

On Monday, the U.S. Centers for Medicare &amp; Medicaid Services (CMS) released its 2026 payment update for Medicare Advantage (MA) and Medicare Part D <a target="_blank" href="https://www.benzinga.com/topic/weight-loss" rel="noreferrer noopener">prescription drug plans</a>.



This update, along with a final rule issued on <a target="_blank" href="https://www.cms.gov/newsroom/fact-sheets/contract-year-2026-policy-and-technical-changes-medicare-advantage-program-medicare-prescription-final" rel="noreferrer noopener">April 4</a>, Friday, includes routine annual changes and technical adjustments to both programs.



Under Friday&#8217;s <a target="_blank" href="https://public-inspection.federalregister.gov/2025-06008.pdf" rel="noreferrer noopener">ruling</a>, President Donald Trump&nbsp;scrapped the Biden administration&#8217;s move for Medicare coverage for anti-obesity treatments, negating the potential coverage for blockbuster GLP-1 drugs like Novo Nordisk A/S&#8217; (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NVO#NYSE">NVO</a>) Wegovy (semaglutide) and Eli Lilly And Co&#8217;s (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LLY#NYSE">LLY</a>) Zepbound (tirzepatide).



Also Read: <a target="_blank" href="https://www.benzinga.com/25/01/42896803/medicare-to-cover-eli-lillys-weight-loss-drug-zepbound-for-obstructive-sleep-apnea-treatment" rel="noreferrer noopener">Medicare To Cover Eli Lilly&#8217;s Weight Loss Drug Zepbound For Obstructive Sleep Apnea Treatment</a>



In November 2024, the Biden-Harris Administration proposed expanding Medicare and Medicaid coverage for anti-obesity medications, aiming to address the high costs that <a target="_blank" href="https://www.benzinga.com/general/biotech/24/11/42192091/biden-proposes-medicare-medicaid-access-for-popular-weight-loss-drugs" rel="noreferrer noopener">have drawn criticism</a>.



In its&nbsp;<a target="_blank" href="https://www.cms.gov/newsroom/fact-sheets/contract-year-2026-policy-and-technical-changes-medicare-advantage-program-medicare-prescription-final" rel="noreferrer noopener">fact sheet</a>, the CMS said it &#8220;is not finalizing certain provisions at this time,&#8221; including Part D coverage of anti-obesity medications. &#8220;CMS may address these proposals in future rulemaking, as appropriate,&#8221; according to the fact sheet.



The Biden administration estimated the change could have extended coverage to an additional 3.4 million adults. According to the National Institutes of Health (NIH), approximately 42% of U.S. adults are classified as obese.



As per a media report in March 2024, Medicare may extend coverage for&nbsp;Novo Nordisk&#8217;s weight-loss drug Wegovy (semaglutide) to certain members with a&nbsp;<a target="_blank" href="https://www.benzinga.com/general/biotech/24/03/37876911/wegovys-success-medicare-contemplates-covering-novo-nordisks-semaglutide-for-heart-health" rel="noreferrer noopener">history of heart disease</a>.&nbsp;



The CMS revealed that Medicare Part D drug-benefit plans, overseen by private insurers, could potentially cover anti-obesity medications under specific circumstances.&nbsp;



In October 2024, the Congressional Budget Office released a <a target="_blank" href="https://www.cbo.gov/system/files/2024-10/60441-medicare-coverage-obesity.pdf" rel="noreferrer noopener">report</a> warning that authorizing anti-obesity treatments for Medicare coverage could increase federal spending by around $35 billion from 2026 to 2034.



The report added that direct federal costs of covering weight loss drugs would increase from $1.6 billion in 2026 to $7.1 billion in 2034.



Relative to the direct costs of the medications, total savings from beneficiaries&#8221; improved health would be small—less than $50 million in 2026 and rising to $1.0 billion in 2034.



In January this year, the U.S. Department of Health and Human Services (HHS) unveiled the selection of 15 additional drugs covered under Medicare Part D for price negotiations, building on efforts to reduce&nbsp;<a target="_blank" href="https://www.benzinga.com/25/01/43062779/popular-ozempic-wegovy-selected-for-next-round-of-medicare-drug-price-negotiations" rel="noreferrer noopener">prescription drug costs</a>. The list included Novo Nordisk&#8217;s Ozempic, Rybelsus, and Wegovy.



Price Action: At the last check Tuesday, LLY stock was up 3.18% to $746.78, and NVO stock is down 0.41% to $63.38.



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