U.S. stocks tumbled on Thursday, with the S&P 500 falling 1.6% and the Nasdaq composite diving 2.8%. The downturn was largely driven by a sudden drop in a major tech company’s stock, despite posting better-than-expected earnings. Analysts suggest the stock may have been overvalued due to earlier surges driven by its role in the AI and tech industries.
Salesforce also contributed to the market pressure, dropping 4% despite exceeding profit expectations for the latest quarter. This was primarily due to a revenue forecast that fell short of analysts’ estimates. However, Snowflake, an AI data cloud company, saw a 4.5% increase in its stock after reporting stronger-than-expected profit and revenue.
Despite the drop in the S&P 500, nearly 40% of its stocks rose.
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Berkshire Hathaway, led by Warren Buffett, was one of the significant gainers, increasing by 1.7%.
Buffett’s investment choices often signal confidence in the market despite perceived high valuations. The Dow Jones Industrial Average dropped 193 points, or 0.4%, to 43,239.50, while the Nasdaq composite ended at 18,544.42. In the bond market, Treasury yields fluctuated following President Trump’s announcement of new tariffs.
He confirmed that tariffs on imports from Canada, Mexico, and China would take effect on March 4th. These measures are expected to raise prices for U.S. households, compounding existing inflation concerns. While some believe these tariffs are leverage in trade negotiations, the persistent uncertainty is casting a shadow over consumer spending—a critical factor in keeping the U.S. economy from tipping into recession.
As Wall Street grapples with these challenges, the Federal Reserve faces increased pressure, hindered by limited tools to address an economy strained by both tariff impacts and inflation.
