The stock market took a significant hit on Thursday as uncertainty surrounding President Donald Trump’s tariff policies and a steep decline in artificial intelligence stocks contributed to substantial losses on Wall Street. The S&P 500 tumbled 1.8%, the Dow Jones Industrial Average dropped 427 points (1%), and the Nasdaq Composite fell 2.6%, plunging more than 10% below its record set in December. Despite President Trump’s temporary reprieve from imposing 25% tariffs on various goods imported from Mexico and Canada, the market reacted negatively amid ongoing fears of an intensified trade war.
Trump continues to push forward with additional tariffs set to take effect on April 2. Yung-Yu Ma, chief investment officer at BMO Wealth Management, commented on the lingering uncertainty, stating, “Businesses will still be cautious in the current environment until more of the tariff picture is clear.”
The U.S. business sector has expressed concerns about the “chaos” induced by tariff uncertainties, while American households are feeling the financial strain, which is denting consumer confidence. Strategists at BNP Paribas noted that the long-term impact of the new tariffs could lead to lasting damage to global economic activity even if they are ultimately rescinded.
President Trump, when questioned about the market slump, remarked, “I’m not even looking at the market,” attributing the price drops to “globalist countries and companies” affected by his trade policies. Attention now turns to Friday’s report from the U.S. Labor Department, which will offer insights into the job market by indicating how many workers U.S. employers hired in the previous month. Economists anticipate accelerated hiring for February, a critical factor in sustaining consumer spending and preventing a recession.
Markets react to tariff uncertainties
Big retailers also hinted at potential troubles for the U.S. economy, with some reporting weaker than expected revenue for the end of 2024. For instance, major retail chains missed analysts’ expectations for revenue forecasts for 2025, which led to dips in their stock prices.
Additionally, several key players in the AI sector saw significant declines. Marvell Technology lost nearly 20% of its value despite surpassing analysts’ forecasts for the latest quarter and predicting substantial revenue growth. Other AI giants, such as Nvidia and Broadcom, also faced sharp declines, reflecting investor concerns that recent gains might have led to overvaluation.
Internationally, markets exhibited mixed reactions. German stocks rallied 1.5% on optimism about the formation of the country’s next government, while stocks in Asia saw increases, with Hong Kong and Shanghai indices rising 3.3% and 1.2%, respectively. China’s commerce minister declared confidence in his country’s ability to weather trade tensions, though he acknowledged the lack of winners in a trade war scenario.
In the bond market, the 10-year Treasury yield slightly increased to 4.29% from 4.28% late Wednesday.
