The stock market faced a turbulent session on February 27, 2025, as stocks tumbled amid President Donald Trump’s announcement of tariffs on Canada and Mexico, alongside a significant decline in Nvidia’s stock following its earnings report. The broad market index closed down 1.59% at 5,861.57, remaining in the red for both the week and the month. The Nasdaq pulled back 2.78%, ending the day at 18,544.42, with Nvidia’s 8.5% slide being a major drag on the tech-heavy index.
The Dow lost 193.62 points, or 0.45%, finishing at 43,239.50. Trump announced that the proposed tariffs of 25% on Mexico and Canada will take effect on March 4 after a one-month moratorium. He claimed that these measures were necessary as the countries had failed to sufficiently curb the flow of drugs over the border.
Additionally, President Trump mentioned an impending 10% tariff on China, adding to existing US tariffs. “We’re in a stalled, range-bound, slightly irrational market as we wait for policy clarity,” commented Jay Hatfield, CEO of Infrastructure Capital Advisors. Nvidia’s sharp decline came despite the company beating expectations on the top and bottom lines and providing strong guidance, driven by sustained demand in the artificial intelligence sector.
However, a decline in gross margins for the quarter and their smallest increase in some time raised questions about the company’s ability to maintain its growth momentum. Economic data also added to the somber market mood.
Market reacts to Trump’s tariff announcements
Jobless claims for the week ending February 22 came in at 242,000, up 22,000 from the previous week’s revised level and higher than the Dow Jones estimate of 225,000. This disappointing figure comes alongside other recent economic reports, including weaker-than-expected consumer confidence, poor retail sales numbers, and a lackluster consumer sentiment reading, all raising concerns about the U.S. economy’s health. With just two trading sessions left in February, the major averages are poised to finish lower.
The broad market index has dropped nearly 3%, while the Dow and Nasdaq are down 2.9% and 5.5%, respectively. Despite Nvidia’s recent tumble, Bank of America’s Vivek Arya sees the current trading levels as an attractive opportunity for investors. He noted that Nvidia’s high initial ramp-up costs for the Blackwell transition are short-term issues.
On the back of Nvidia’s results, Arya raised his price target by $10 to $200, suggesting more than 52% upside from Wednesday’s close. The Consumer Financial Protection Bureau (CFPB) has dismissed several lawsuits that began during the Biden administration, including actions against Capital One, Rocket Homes Real Estate, and Vanderbilt Mortgage & Finance. The CFPB has significantly scaled back its operations under the Trump administration.
Palantir is on track for another week of significant declines, with shares down more than 12% this week and building on last week’s 15% plunge. Despite these recent losses, the stock is still up more than 17% in 2025. As the market continues to navigate economic uncertainties and policy changes, investors remain cautious, closely monitoring upcoming data and corporate earnings for further cues.
Image Credits: Photo by Yorgos Ntrahas on Unsplash
