Dow drops 400 points amid tariff worries

Kaityn Mills
2 Min Read
Dow drops 400 points amid tariff worries

The U.S. stock market tumbled on Thursday as investors grew increasingly worried about the impact of tariffs and slowing economic growth. The Dow Jones Industrial Average dropped over 400 points, or about 1%, while the S&P 500 fell nearly 2%. The Nasdaq Composite plunged more than 2.6%, officially entering correction territory.

Trade-war uncertainty lingered as investors speculated on the extent of President Donald Trump’s willingness to impose tariffs.

On Thursday, Trump announced a pause on tariffs for some Mexican goods, with a later extension to include certain Canadian goods. This followed a previous announcement about a one-month pause on duties for automakers from Mexico and Canada.

Tech stocks led the retreat, with Marvell seeing nearly a 19% drop after indicating higher AI-related investments. Other chipmakers like Nvidia, Broadcom, and AMD also saw significant losses.

Dow plunges due to tariff concerns

Investors are closely monitoring the semiconductor sector amid heightened concerns over AI demand.

Gap, bucking the trend of disappointing retailer earnings, beat profit estimates and signaled a positive outlook despite facing the challenges of tariffs in key sourcing regions like China. Gap’s shares rose around 8% in post-market trading after the announcement.

Meanwhile, jobless claims data revealed 221,000 initial claims, down from the previous week and below economist expectations. However, recent economic data has spurred concerns over a potential stalling of US economic growth. Market participants are now anticipating Friday’s jobs report, which is seen as a critical risk factor for the market’s direction.

Commerce Secretary Howard Lutnick hinted that goods compliant with the US-Mexico-Canada Agreement (USMCA) might receive a one-month tariff reprieve, though this has not been officially confirmed. President Trump’s fresh adjustments to tariffs, especially the decision to delay some on Mexican and Canadian goods, came as a relief to some but left uncertainty about the broader trade strategy. As market reactions continue to unfold, investors remain vigilant of any further policy shifts that could impact economic stability.

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Kaitlyn covers all things investing. She especially covers rising stocks, investment ideas, and where big investors are putting their money. Born and raised in San Diego, California.