Wall Street’s sell-off kicked back into gear on Thursday, and a U.S. stock market rattled by President Donald Trump’s tariffs and uncertainty about the economy fell sharply.
The S&P 500 tumbled 1.8% to resume its slide after a small recovery clawed back some of its sharp drop over recent weeks. The Dow Jones Industrial Average dropped 427 points, or 1%, and the Nasdaq composite sank 2.6% to finish more than 10% below its record set in December.
Stocks fell even though Trump on Thursday offered a one-month reprieve from his 25% tariffs on many goods imported from Mexico and Canada.
All the moves keep hope alive that Trump may be using tariffs as just a tool for negotiations rather than as a permanent policy and that he may ultimately avoid a worst-case trade war that grinds down economies and sends inflation higher.
But Trump is still pressing ahead with other tariffs scheduled to take effect April 2. And the growing back-and-forth moves on tariffs are only amping up the uncertainty. It was just on Monday that Trump said there was “no room” left for negotiations that could lower the tariffs on Mexico and Canada, which took effect Tuesday.
“These exemptions don’t do much to resolve the general air of uncertainty,” said Yung-Yu Ma, chief investment officer at BMO Wealth Management. “Businesses will still be cautious in the current environment until a lot more of the tariff picture is clear.”
U.S. businesses are already saying they’re confronting chaos because of all the uncertainty coming out of Washington. U.S. households are bracing for higher inflation because of the tariffs, which is sapping their confidence.
Such reports have raised the possibility of stagflation, where the economy is stagnating, and inflation is high. It’s something that policy makers at the Federal Reserve don’t have a good tool to fix.
Next up for Wall Street is a report coming Friday from the U.S. Labor Department on how many workers U.S. employers hired last month. A solid job market so far, along with the solid spending by U.S. households that it’s allowed, have been linchpins in preventing a recession.
Making things worse for the U.S. stock market, some of its biggest stars are seeing their glow dim.
Semiconductor companies and their suppliers were particularly heavyweights, after soaring to staggering heights because of the frenzy around artificial-intelligence technology.
Marvell Technology lost nearly a fifth of its value and dropped 19.8% even though it reported results for the latest quarter that edged past analysts’ forecasts. It also said it expects revenue growth in the current quarter of more than 60% from the prior year.
But that wasn’t enough for investors, who have grown used to AI-related companies trouncing expectations.
The star of the AI boom, Nvidia, fell 5.7%, while Broadcom lost 6.3% ahead of the release of its earnings report. They were two of the heaviest weights on the S&P 500.
AI superstars had been dominating Wall Street for years and helped it run to record after record. But those soaring performances, including a nearly 820% surge for Nvidia from 2023 into 2024, had critics saying prices had grown too expensive. They’re also facing threats as Chinese companies develop their own AI offerings, with DeepSeek famously saying it didn’t need to use the industry’s most expensive chips.
All told, the S&P 500 fell 104.11 points to 5,738.52. The Dow Jones Industrial Average dropped 427.51 to 42,579.08. The Nasdaq composite tumbled 483.48 to 18,069.26.
