Jamie Spencer
The S&P 500 dipped 0.1% during a volatile session on Thursday, following President Donald Trump’s announcement that 25% tariffs on Canada and Mexico would take effect on March 4. The broad market index remains in the red for the week and month. The Nasdaq Composite also fell, declining 0.7%, dragged down by a 3.5% slide in Nvidia’s stock after the chipmaker’s earnings report.
Market Reactions to Tariff Announcement and Nvidia Earnings
In a post on Truth Social, Trump stated that the proposed tariffs would proceed as planned, citing insufficient action by Canada and Mexico to curb drug trafficking. He also announced an additional 10% levy on Chinese imports, escalating trade tensions further.
“Nvidia earnings were outstanding, but they come during an extremely jittery stock market,” said James Demmert, chief investment officer at Main Street Research. Despite exceeding fourth-quarter estimates and issuing strong guidance, Nvidia’s gross margins declined, and the revenue beat was its smallest in two years, raising concerns about its growth momentum.
Mixed Performance Across Major Indexes
The Nasdaq Composite fell 0.7%, driven by Nvidia’s decline, which weighed heavily on the tech-heavy index. Meanwhile, the S&P 500 slipped 0.1%, continuing its downward trend for the week and month.
In contrast, the Dow Jones Industrial Average gained 283 points, or 0.7%, buoyed by strong performances from JPMorgan Chase and 3M. The mixed index performances highlight investor caution amid economic uncertainty and geopolitical tensions.
Economic Data and Market Sentiment
The market was further impacted by a rise in jobless claims, which came in at 242,000 for the week ending February 22 — 22,000 more than the previous week and higher than the Dow Jones estimate of 225,000. This data added to growing concerns about an economic slowdown.
Recent economic reports, including weaker-than-expected consumer confidence, disappointing retail sales, and low consumer sentiment, have raised worries about the health of the U.S. economy. Jay Hatfield, CEO of Infrastructure Capital Advisors, noted, “We’re in a stalled, range-bound, slightly irrational market as we wait for policy clarity.”
Investors Eye Upcoming Inflation Report
Traders are now looking ahead to Friday’s personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge. The report is expected to provide more clarity on inflation trends and guide the Fed’s monetary policy decisions.
With only two trading sessions left in February, all three major indexes are on track to end the month lower. The S&P 500 has dropped 1.4%, while the Dow and Nasdaq are down 1.8% and 3.4%, respectively, reflecting investor concerns over economic and geopolitical uncertainties.
Conclusion: Volatility Amid Trade and Economic Uncertainty
Thursday’s market movements underscore the heightened volatility driven by trade tensions, economic data, and corporate earnings. As President Trump’s tariff plans unfold and economic indicators remain mixed, investors are likely to remain cautious.
The upcoming PCE report could provide more direction for the markets, influencing the Federal Reserve’s inflation strategy. In the meantime, traders will continue to monitor geopolitical developments and economic trends for further guidance.
