Dow Drops 500 Points, Wall Street Sell-Off Continues Amid Tariff Fears/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Wall Street resumed its downward slide Thursday, with the Dow dropping 500 points and AI stocks suffering major losses. Nvidia fell 3.8%, while Marvell Technology plummeted 20% despite strong earnings. Investors remain jittery over Trump’s tariffs, which threaten economic stability and raise fears of stagflation. Retailers like Macy’s and Victoria’s Secret also reported disappointing forecasts, fueling concerns over consumer spending. Global markets were mixed, with European stocks rising after the ECB cut interest rates, while China vowed to withstand U.S. tariffs.
Wall Street Sell-Off: Quick Look
- Dow Drops 500: Stocks fall sharply, erasing Wednesday’s brief rebound.
- AI Stocks Crash: Marvell Technology down 20%, Nvidia drops 3.8%.
- Tariff Fears Grow: Trump’s trade war with China, Mexico, and Canada rattles markets.
- Retail Struggles: Macy’s, Victoria’s Secret issue weak forecasts.
- European Stocks Mixed: Germany’s new borrowing plan lifts markets.
- China Defiant: Beijing vows to endure U.S. trade war pressure.
Dow Drops 500 Points, Wall Street Sell-Off Continues Amid Tariff Fears
Wall Street Reverses Course
After a brief rebound Wednesday, U.S. stocks plunged again Thursday as artificial intelligence (AI) stocks and tariff concerns fueled investor uncertainty.
- The S&P 500 fell 1.5%, giving up its gains from the prior day.
- The Dow Jones Industrial Average dropped 507 points (1.2%).
- The Nasdaq Composite tumbled 1.9%, weighed down by slumping tech stocks.
AI Stocks Suffer Major Losses
The high-flying AI sector, which has propelled markets to record highs, took a major hit Thursday.
- Marvell Technology plunged 20%, despite posting better-than-expected earnings and forecasting 60% revenue growth.
- Nvidia, the poster child of AI stocks, fell 3.8%, extending its recent slide.
- Investors worry AI stocks have become overvalued, with some experts warning of an impending tech bubble burst.
Tariff Jitters Rattle Markets
Trump’s tariff war with key trading partners remains a major drag on investor sentiment.
- The U.S. imposed 25% tariffs on Canada and Mexico Tuesday, with China also targeted.
- Trump granted a one-month tariff exemption for U.S. automakers, but most tariffs remain in place.
- Analysts warn tariffs could lead to higher inflation and slower economic growth, increasing the risk of stagflation.
“Much will depend on whether these new tariffs prove temporary or are toned down,” BNP Paribas strategists said.
Retail Struggles Add to Economic Concerns
Adding to market worries, U.S. retailers signaled weaker consumer spending:
- Macy’s reported disappointing sales, with 2025 profit forecasts falling short. Its stock fell 3.1%.
- Victoria’s Secret tumbled 12.2%, despite surpassing fourth-quarter earnings expectations.
Consumer spending has been a crucial driver of U.S. economic growth, and weakening retail sales could signal a slowing economy.
Global Markets React to U.S. Turmoil
Markets outside the U.S. were mixed, reflecting global uncertainty:
- European stocks edged higher after the European Central Bank cut interest rates.
- Germany’s markets rallied, driven by a new government borrowing plan that could lead to trillions in spending.
- Asian stocks climbed, with Hong Kong up 3.3% and Shanghai rising 1.2%.
Meanwhile, China struck a defiant tone in response to U.S. tariffs.
“There are no winners in a trade war,” China’s commerce minister said.
Bond Market Holds Steady
Despite the market sell-off, U.S. Treasury yields remained stable:
- The 10-year Treasury yield held at 4.28%, signaling investors are still cautious but not panicked.
What’s Next?
Investors are now bracing for Friday’s crucial U.S. jobs report, which will offer new insights into the labor market’s health. A strong report could ease recession fears, while weak job growth may deepen market losses.
With Trump’s April 2 tariff deadline looming, markets face further volatility in the weeks ahead.
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