The American stock market had a difficult day on Thursday due to the war of words, international trade debates, and a cloud of economic uncertainty in the investor psyche. The Dow Jones Industrial Average was down by 427 points, or 1%, dropping to 42,579.08.
At the same time, the Nasdaq did not make any attempts to hold the line with 483.48 dropped points which meant a significant fall of 2.6% that took it to the finishing line at 18,069.26. On the S&P 500 chart, which charts the performance of the 500 largest companies in the U.S., the line moved down by 1.8%, which is equivalent to 104.11 points, to end at 5,738.52.
However, the fact that the U.S. has exempted Mexico, Canada, and China from the recently imposed tariffs did not materially alter the worry about trade problems with those countries.
At the time, President Donald Trump’s decision to postpone the tariff increase of 25% for a month caused no improvement in the credibility of his brazen style of negotiations. Market analysts are insistent that companies are strictly maintaining a precautionary attitude as the trade issues of tariffs have remained unaddressed.
Furthermore, retail businesses are reeling under the economic downslide. After Macy’s reported lower sales than expected at the end of 2024 and announced a lower guidance for 2025, its stock dipped by 0.7%. In a similar manner, Victoria’s Secret saw a massive 8.2% drop in its stocks after the company predicted dim revenue forecasts for the coming year.
Moreover, there was a striking downturn in tech stocks, in particular the AI sector. Marvell Technology’s shares went down by close to 20% in spite of the better earnings than projected and the forecasted revenue growth for the next quarter. Fondly amassed Arm Nvidia bought similar fortunes and lost 5.7% and Arm the software vendor, Broadcom yielded 6.3%, respectively.
Following the happenings, the European stock markets demonstrated mixed results. Specifically, the DAX index in Germany rose by 1.5%, and Asian markets such as Hong Kong and Shanghai remained strong, as the Hang Seng Index went up by 3.3% and the Composite Index elevated by 1.2%.
The rectangular formation of clouds marks the tropical cyclone of Shanghai. Meanwhile, the U.S. bond market experienced a slight movement, the yield on the 10-year Treasury increased to 4.29%.
In the light of the forthcoming significant economic variables such as the U.S. labor market report, the uncertainties about inflation and consumer spending are still taking center stage. Hiring has been a crucial factor in the economy recently, it has been the government performers, but the analysts still maintain the caution to what lies ahead.
