Delta Airlines (DAL) shares are facing a steep decline after the company significantly revised its first-quarter revenue and earnings projections. The airline’s after-hours trading saw a sharp drop of 14%, following a 5.5% dip during the regular trading session. This adjustment has raised concerns about broader market conditions, as Delta's outlook points to falling consumer and corporate confidence.

The cuts to Delta's forecast come amid mounting macroeconomic uncertainty, which has impacted demand, particularly in the domestic market. Delta now expects its Q1 sales to grow by just 3% to 4%, a far cry from its previous guidance of 7% to 9%, given back in January. Additionally, the airline lowered its earnings per share (EPS) forecast, now predicting a range of $0.30 to $0.50, down from its earlier estimate of $0.70 to $1.00.

While the news sent Delta’s stock reeling, it wasn’t an isolated case. Other major airlines also faced steep declines after hours. American Airlines (AAL) saw an 8.8% drop, United Airlines (UAL) plunged by 11%, and Southwest Airlines (LUV) fell by 5%. These losses reflect broader concerns in the airline industry, as uncertainty about consumer spending and corporate travel continues to weigh heavily on the sector.

Delta explained that the downgrade in its outlook was primarily due to reduced confidence among both consumers and businesses. This shift has led to weaker domestic demand, even though premium services, international flights, and loyalty program revenue have remained strong. These areas of growth have helped maintain some stability within Delta's diversified revenue stream, but it’s clear that overall conditions are more challenging than expected.

The airline industry is currently navigating a volatile landscape, and with Delta’s reduced expectations, investors are paying close attention to how other major carriers will adjust their forecasts in the coming weeks.

US stocks took a major hit on Monday, marking the largest tech rout since 2022.

The S&P 500 plummeted 2.7%, while the Nasdaq 100 dropped 3.8%, its worst performance in over a year. The Russell 2000, which tracks smaller companies, also fell by 2.7%. The widespread sell-off was primarily driven by a continued retreat in momentum stocks, but growing concerns about a potential US economic slowdown have added to the market's pain, causing broader losses across various sectors.

Tech stocks were hit particularly hard, along with consumer discretionary, communication services, and financials. The financial sector saw the most dramatic reversal, erasing all of its year-to-date gains with Monday's sharp decline. In contrast, utilities emerged as the best-performing sector, standing out amidst the broader downturn. Tesla, already struggling this year, saw a massive 3.17% drop, marking its worst day since 2020 and making it the worst-performing stock in the S&P 500 for 2025 so far. Palantir, too, faced a continued unwind, with its stock dropping more than 4% on the day.

Airlines were also rattled, grappling with concerns over rising tariffs and the possibility of a slowing US consumer.

Delta, United, Southwest, and American Airlines all saw significant losses, with Delta shedding 8.6%. Gaming stocks weren't immune either, as rising levies threaten to increase the cost of consoles. Nintendo, Sony, and Microsoft all saw declines, adding to the uncertainty in the tech and entertainment sectors.

Semiconductor stocks took another hit, with industry giants like Nvidia and Broadcom dropping around 5%. Meanwhile, stocks linked to the cryptocurrency space also struggled. MicroStrategy's plan to increase its Bitcoin holdings did not sit well with investors, particularly as the digital asset market has been in decline. Robinhood's stock fell 6.27%, partly due to the broader crypto slump and a recent settlement with the SEC, as well as S&P’s decision to exclude it from its US stock index.

In the gambling sector, DraftKings was another casualty, as the broader market slump may dampen Americans' enthusiasm for betting. Novo Nordisk saw its stock tumble after disappointing results from trials for its latest weight-loss drug, while Rocket Companies faced skepticism over its all-stock acquisition of Redfin. On a more positive note, consumer staples and defense stocks, such as Conagra and Northrop Grumman, provided some refuge for investors amid the turbulence, offering stability in an otherwise volatile market.

Goldman Sachs Slashes US GDP Growth Forecast Amid Rising Trade Tensions

Goldman Sachs, traditionally one of the more optimistic voices on Wall Street, has significantly lowered its US GDP growth forecast for 2025. For over two years, the firm had maintained a more positive outlook on the US economy compared to many of its peers. However, in light of escalating trade tensions, the bank's perspective has now shifted, and it is scaling back its expectations for the year ahead.

In a report published late Monday, Jan Hatzius, Goldman Sachs' chief economist, revised the firm’s US GDP growth forecast down from 2.4% to just 1.7%. This adjustment now places Goldman’s forecast below the Bloomberg consensus, which stands at 2%. Hatzius cited the increasingly negative trade policy outlook as a key factor behind the downgrade, noting that the outlook has become "considerably more adverse." This has raised concerns about the economic headwinds facing the country.

A major contributor to this revision is Goldman’s updated expectations for US tariffs. The firm now anticipates that the average US tariff rate will double from its previous estimate and will be five times higher than the rate experienced during President Trump’s first term. Hatzius pointed out that these tariff increases are expected to slow economic growth, primarily by pushing up prices and reducing consumer spending power. Additionally, the heightened policy uncertainty is causing businesses to delay investments, further dragging on economic activity.

Goldman Sachs has also raised its core PCE inflation forecast to 3% for the latter half of this year, up from the previous estimate of around 2.4%. This increase is directly tied to the effects of the tariff hikes rippling through the economy, exacerbating inflationary pressures.

The shift in sentiment is also echoed by other analysts. Last week, Morgan Stanley downgraded its US GDP growth outlook from 1.9% to 1.5%, while the Atlanta Fed has now projected a potential contraction of 2.4% in Q1. Even former President Trump, who once championed economic growth, has refused to rule out the possibility of a recession in 2025, adding to the growing sense of caution among economists and investors alike.

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