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Stocks sank Monday morning as investors digested the twin shocks of Warren Buffett’s retirement announcement and the cautious tone in Berkshire Hathaway’s (BRK.A-0.82%) latest results.
The Dow Jones Industrial Average was off 170 points, or 0.4%, shortly after markets opened. The S&P 500 and the Nasdaq both fell about 0.8%. Volatility surged, with the VIX jumping more than 6%. Gold rallied 2.4%.
The big weekend headline: Buffett bows out
After a legendary run, Buffett will step down from Berkshire Hathaway at the end of 2025. His successor, Greg Abel, has long been the heir apparent, but the official word adds new gravity to an already fraught moment. Buffett will stay on as Berkshire’s board chair — but either way it’s the end of an era.
Then there’s Berkshire’s Q1 results: The conglomerate reported a record $348 billion in cash, cash equivalents, and U.S. Treasury bills on hand as of March 31. That mountain of dry powder is striking – unlike some retail investors, Buffett didn’t buy the dip.
Instead, Berkshire stayed bearish. The firm unloaded $4.7 billion in equities while buying just $3.2 billion, marking the 10th straight quarter it’s been a net seller of stocks. The takeaway? Even Buffett, famous for buying when others are fearful, sees few bargains.
Looking to the week ahead, markets are bracing for the Fed’s next rate decision
The two-day meeting starts Tuesday, with a press conference to follow on Wednesday. No cuts are expected, but that hasn’t stopped the White House from applying fresh pressure for looser policy — a now-familiar run of shouty mixed messages and not-quite-coherent demands. Ditto the weekend’s talk of trade deals, which was both nonspecific and contradictory.
One bit of trade policy did become clear, however: On Truth Social, President Donald Trump declared he would impose a 100% tariff on all films produced outside the U.S., citing a foreign propaganda effort that’s allegedly “devastating” Hollywood. The abrupt announcement directs the Commerce Department and U.S. Trade Representative to enforce the tax — a move likely to shake the global film industry and inflame trade tensions.
Leading Economic Index flashes a crisis-level warning
The Conference Board’s Leading Economic Index (LEI) dropped 0.7% in March, its steepest monthly fall since October 2023 and the fourth consecutive decline. The index has now fallen in 35 of the past 37 months and sits at its lowest level since 2016. With a cumulative drawdown of 16% from its peak, the LEI is creeping closer to 2008-level territory, when the drop hit about 27%.
Recession fears are back — and rising fast
Also according to Conference Board data, 72% of U.S. consumers now believe a recession is “somewhat” or “very likely” in the next 12 months — the highest in two years. That’s an 8-point jump since November and a sign of the growing disconnect between Wall Street’s rally and Main Street’s dread.
Consumers are reporting worsening views of their family finances, citing inflation fatigue, rising borrowing costs, and layoff headlines.
Company earnings coming today
Palantir (PLTR+1.01%), Vertex (VRTX+0.59%), Cummins (CMI-0.98%), Ford (F-2.22%), Tyson Foods (TSN+0.64%), and Clorox (CLX-0.03%) all report today. Watch for AI rhetoric from Palantir, pipeline updates from Vertex, and inflation-related commentary from Tyson and Clorox. Ford’s margins and Cummins’ industrial outlook will also shape investor mood.
Later this week, the earnings parade continues with Disney (DIS-1.33%), Coinbase (COIN-3.06%), and Uber (UBER+0.83%)— offering insight into consumer wallets, streaming dynamics, crypto activity, and the state of the gig economy.