U.S. stocks tumbled on Thursday as uncertainty over tariffs and plummeting AI stock values weighed heavily on the market. The S&P 500 fell 1.8%, the Dow Jones Industrial Average dropped 427 points or 1%, and the Nasdaq composite plunged 2.6%, now more than 10% below its record high set in December. President Donald Trump announced exemptions from his 25% tariffs on many goods imported from Mexico and Canada, but these provided little reassurance to investors who remain wary of a potential significant trade war.
Trump’s additional tariffs set to take effect on April 2 are compounding the market’s uncertainty. Yung-Yu Ma, chief investment officer at BMO Wealth Management, said “These exemptions don’t do much to resolve the general air of uncertainty. Businesses will still be cautious in the current environment until a lot more of the tariff picture is clear.”
U.S. businesses have reported chaos due to the unpredictable tariff landscape, affecting their confidence and financial planning.
Strategists at BNP Paribas anticipate lasting damage to global economic activity even if the tariffs are eventually removed. Some of Wall Street’s biggest stars in the semiconductor sector have seen their stocks plummet.
u.s. stocks fall amid tariff worries
Marvell Technology dropped 19.8% despite reporting quarterly results that slightly exceeded analysts’ forecasts. Nvidia fell 5.7%, and Broadcom lost 6.3% ahead of its earnings report. Retailers like Target and Victoria’s Secret also reported weaker-than-expected revenues and cautious forecasts for the upcoming year, signaling potential consumer spending slowdowns.
Traders are eyeing the U.S. Labor Department’s employment report due Friday, which will offer insight into hiring trends for February. A robust jobs market so far has been a key factor in preventing a recession, alongside strong consumer spending. However, some economists warn that the new tariffs could dampen these positive trends.
European markets showed mixed results. German stocks rallied 1.5% following an agreement by political parties to form the next government, paving the way for new borrowing and spending initiatives. In Asia, Hong Kong’s market jumped 3.3%, and Shanghai’s rose 1.2%, following affirmations from China’s commerce minister that the nation’s economy can withstand Trump’s imposed tariffs, though he acknowledged that “there are no winners in a trade war.”
The 10-year Treasury yield edged up to 4.29% from 4.28% late Wednesday.
Image Credits: Photo by Mediamodifier on Unsplash
