Investors reacted to US President Donald Trump’s 90-day reprieve from some “reciprocal” tariffs by lowering their expectations that the economic activity in China will be affected negatively.
The Dow Jones Industrial Average dropped by over 1,700 points at the time this article was written, and the S&P 500 fell more than 5%.
The Nasdaq Composite dropped nearly 6% since the last close.
Apple and Tesla suffered the biggest declines Thursday. They fell more than 10% and 6% respectively.
NVIDIA Meta Platforms and NVIDIA also suffered losses of 7.3% and 6,9%, respectively.
CNBC confirmed that, on Thursday, the White House informed them of the fact that, when combined with an existing tariff of 20% related to the Fentanyl Crisis, the total rate for products coming from China will be 145%.
After a historical surge in Wall Street where S&P 500 and Dow Jones, as well as the Nasdaq, saw huge gains the day before, Thursday’s market fell again.
Trump’s announcement that tariff rates would be reduced to 10% in most cases for a period of 90 days triggered a rally on the stock market.
Canada and Mexico are exempted. The European Union has responded by imposing a 90-day suspension on US products.
David Morrison is a senior analyst for Trade Nation and he said that the target of Trump’s tariffs has become clear.
Morrison:
It is hoped that China, too, will come forward and start discussions. The immediate threat is gone. Investors are aware of the uncertainty that still surrounds markets as they wake up in the morning.
Stocks of bank are falling
Bank stocks experienced significant declines during Thursday’s market downturn.
Both the SPDR S&P Bank ETF and SPDR S&P Regional Banking ETF fell 8%. This was more than the S&P 500’s 5% decline.
The session saw a decline in several banking stocks. Western Alliance Bancorp experienced the biggest drop of over 12%.
Webster Financial, Voya Financial, and Voya Financial all suffered significant losses.
Stock prices of major financial companies, such as Goldman Sachs and JPMorgan have all fallen.
Energy sector suffers massive losses
Oil’s continuing sell-off amid uncertainty over Trump’s tariff war has caused the S&P 500 energy sector to fall by more than 5%.
Occidental Petroleum, Devon Energy and Exxon all fell by over 10% each. The oil giants Exxon & Chevron also dropped over 7%. Phillips 66, a refiner, was down by almost 4%.
US crude oil is down nearly 5% and has fallen below $60 a barrel, giving back most of the gains made on Wednesday following Trump’s decision to defer tariff increases in most countries.
The focus of traders is now on the US-China Trade War, as Trump has raised tariffs to 145% on China’s biggest crude importer.
The Big Tech Failure
After President Trump announced a temporary suspension of certain reciprocal duties, the major tech stocks (often referred to by their acronym, megacap technology stocks) experienced a decline after achieving significant gains during the previous trading day.
Investors reevaluated their positions after this announcement.
Tesla, the manufacturer of electric vehicles, has seen its stock prices drop by more than 10%.
The decline in the stock price was further fuelled by Wall Street firms who lowered their target prices for the company.
The price target adjustment reflects an increased caution in assessing Tesla’s performance and could impact investor confidence.
NVIDIA’s stock dropped by more than 7 percent.
The decline in sales can be explained by the general market downturn, and the possible impact that the announcement of tariffs will have on NVIDIA’s global supply chain.
The temporary suspension of tariffs might provide relief for a short time, but the implications on the future are uncertain. This will lead to an increase in volatility and caution among investors.
The post Dow drops 1,700 points while S&P loses Wednesday’s gain; big tech and bank stocks suffer steep declines first appeared on Invezz
