Wall Street Takes a Hit as Tariffs and AI Stock Decline Shake Markets
Wall Street took another hard fall, with major stock indices sliding deeper into the red. The Nasdaq composite plunged more than 10% below its record high, officially entering correction territory. Investors are facing a whirlwind of uncertainty as AI stocks stumble and the market continues to react to President Trump’s ever-shifting tariff policies.
The S&P 500 dropped 1.8%, erasing the modest recovery seen the previous day. Meanwhile, the Dow Jones Industrial Average sank 427 points, or 1%, and the Nasdaq tumbled 2.6%. AI stocks, once the shining stars of the market, are feeling the heat as investors grow skeptical about their sky-high valuations. Nvidia, the poster child of the AI boom, fell 5.7%, while Broadcom lost 6.3% ahead of its earnings report. Marvell Technology suffered a massive 19.8% drop, despite reporting better-than-expected results. The AI frenzy that drove unprecedented gains now seems to be cooling, as concerns over sustainability and competition—especially from China—begin to weigh on investors.
At the heart of the sell-off is the ongoing tariff drama. President Trump recently granted a one-month exemption on some tariffs for Mexico and Canada, but the overall uncertainty surrounding trade policies continues to rattle businesses and consumers alike. While these exemptions offer temporary relief, they do little to clear up the bigger picture. Businesses are hesitant to make long-term decisions in such an unpredictable environment, and American consumers are bracing for inflationary pressures.
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Trump, however, appears unfazed by Wall Street’s turbulence, stating, “I’m not even looking at the market.” He attributed the stock market’s struggles to “globalist countries and companies” that, in his view, are losing out as the U.S. takes back economic ground. But economic strategists warn that prolonged uncertainty and trade disruptions could leave lasting scars on global economic growth, even if some of the tariffs are eventually removed.
The next big test for Wall Street comes with the U.S. jobs report, set to be released on Friday. A strong labor market has been one of the key pillars holding up the economy, allowing consumer spending to remain steady despite inflation concerns. Economists are expecting hiring to have picked up in February, but recent reports from major retailers like Macy’s and Victoria’s Secret have raised some concerns about consumer demand. If hiring slows down, it could add more fuel to recession fears.
In global markets, reactions were mixed. European stocks saw gains after the European Central Bank cut interest rates, while Asian markets saw jumps in Hong Kong and Shanghai. China’s commerce minister pushed back against Trump’s tariff pressure, stating that the country will “not yield to bullying” and is prepared to weather the storm.
With volatility gripping Wall Street, all eyes are now on the jobs report. Will a strong labor market ease investors' concerns, or will the economic uncertainty continue to drag stocks down? The coming days will be crucial in determining the market’s next move.
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