Traders are busy working on the floor of the New York Stock Exchange in New York on Monday, February 24, 2025. (AP Photo/Seth Wenig)
Wall Street took another hit on Thursday as market uncertainty deepened due to President Donald Trump’s tariff policies and declining tech stocks. The S&P 500 fell 1.8%, the Dow Jones Industrial Average lost 427 points, and the Nasdaq dropped 2.6%, pushing it 10% below its December record.
Despite Trump granting a one-month tariff reprieve on goods from Mexico and Canada, investors remained wary. Unlike the previous day’s temporary boost after automakers received exemptions, this delay did little to ease concerns. Many fear Trump’s tariffs are more than just a negotiation tactic and could lead to prolonged trade conflicts, spiking inflation and slowing economic growth.
Businesses and consumers alike are feeling the effects. While companies struggle with market unpredictability, American households brace for rising prices, dampening confidence. Financial strategists at BNP Paribas warn that even if tariffs are eventually lifted, the damage to global markets could be lasting.
Adding to the market’s woes, major AI stocks faced a steep decline. Semiconductor companies, which had been driving Wall Street’s rally, saw sharp losses. Marvell Technology plunged nearly 20% despite reporting solid earnings and strong revenue growth projections. Investors, who had become accustomed to AI stocks outperforming expectations, reacted negatively. Nvidia, the poster child of the AI boom, dropped 5.7%, while Broadcom fell 6.3% ahead of its earnings report.
Retailers also signalled trouble for the U.S. economy. Macy’s reported weaker-than-expected revenue for late 2024, causing its stock to dip 0.7%. Victoria’s Secret, despite surpassing sales forecasts, issued a weaker revenue outlook for the year ahead, leading to an 8.2% stock decline.
Friday’s upcoming U.S. jobs report is now in sharp focus. With job growth a key factor in preventing a recession, economists expect hiring to pick up. However, recent struggles in the retail sector raise concerns about consumer spending power.
Overseas, European markets were mixed following an expected interest rate cut by the European Central Bank. Germany’s stock market jumped 1.5% after its new government agreed to ease borrowing restrictions. Meanwhile, Asian markets saw gains, with Hong Kong surging 3.3% and Shanghai rising 1.2%.
China responded to Trump’s tariff threats with defiance. The country’s commerce minister stated that China would withstand economic pressure, though he acknowledged that no one wins in a trade war.
In the bond market, the 10-year Treasury yield ticked up to 4.29%, reflecting investor uncertainty.
As Wall Street grapples with tariff turmoil, AI stock slumps, and consumer spending worries, investors remain on edge. The coming weeks will determine whether these market setbacks are temporary or a sign of deeper economic trouble.
