Stock Market Struggles: Nvidia Slips, Trump Tariffs Weigh on Investors/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Wall Street faced losses Thursday as Nvidia’s stock slipped 1.2%, reversing early gains despite strong earnings, due to concerns over AI competition from China’s DeepSeek. The S&P 500 fell 0.4%, while the Nasdaq dropped 1.1%, and the Dow gained 103 points. Salesforce tumbled 4.3% on weak revenue forecasts. Adding to market pressure, Donald Trump reaffirmed new tariffs on Canada, Mexico, and China, fueling inflation concerns. Meanwhile, Treasury yields fluctuated, and jobless claims hit a three-month high, raising questions about the economy’s strength. Investors remain cautious amid ongoing uncertainty in AI, tariffs, and inflation trends.
Market Volatility Quick Looks
- S&P 500 Drops 0.4%, Nasdaq down 1.1%, Dow up 103 points.
- Nvidia Falls 1.2% despite beating earnings expectations.
- Salesforce Sinks 4.3% after weak revenue outlook.
- Trump’s Tariff Plans on China, Canada, and Mexico add market pressure.
- Treasury Yields Fluctuate, with 10-year Treasury at 4.27%.
Deep Look: Wall Street Struggles Amid Nvidia’s Reversal and Tariff Concerns
Wall Street faced another turbulent session on Thursday, with major U.S. stock indexes fluctuating in response to earnings reports, geopolitical concerns, and economic uncertainty. The S&P 500 slipped 0.4%, continuing its recent struggles after weaker-than-expected economic data knocked it off last week’s record highs. Meanwhile, the Nasdaq composite fell 1.1%, weighed down by losses in the tech sector, while the Dow Jones Industrial Average managed a modest 103-point gain (0.2%) by mid-morning trading.
Nvidia’s AI-Fueled Run Hits a Roadblock
The biggest market mover was Nvidia, one of Wall Street’s most influential stocks. Initially, the semiconductor giant jumped at market open after reporting better-than-expected earnings for the latest quarter. However, the stock quickly reversed course, falling 1.2%, as concerns about AI competition from China’s DeepSeek rattled investors.
DeepSeek’s recent breakthrough in developing an advanced large language model without relying on high-end Nvidia chips has raised questions about the long-term demand for Nvidia’s cutting-edge semiconductors. The AI boom has fueled record-breaking growth for Nvidia, but any indication that companies could achieve similar AI advancements without heavy investment in Nvidia’s ecosystem poses a significant risk to the company’s future prospects.
Despite Nvidia’s strong quarterly results and positive forward guidance, analysts at UBS, led by Timothy Arcuri, noted that the report was merely “good enough to keep the debate moving in a positive direction”—but not strong enough to trigger a major rally.
Salesforce Slumps on Revenue Concerns
Meanwhile, Salesforce tumbled 4.3%, even after exceeding analysts’ profit expectations. Investors were disappointed with the company’s weaker-than-expected revenue forecast, highlighting concerns over softening demand for enterprise software solutions.
Trump’s Tariff Announcement Adds to Market Anxiety
Adding to Wall Street’s cautious tone, President Donald Trump reaffirmed his plan to implement tariffs on March 4 for imports from Canada and Mexico and introduce a new 10% tariff on Chinese goods.
While some investors believe Trump’s tariff threats are more about negotiation tactics than actual policy implementation, the mere discussion of increased tariffs has already begun to shake consumer and investor confidence. Higher tariffs could fuel rising prices, worsening the inflationary pressures that have already proven difficult to control.
Economic Data Sends Mixed Signals
The bond market reacted sharply to both Trump’s tariff remarks and new economic reports released on Thursday. A revised estimate of Q4 2024 GDP growth confirmed that the economy remained solid, but a key measure of inflation was revised higher, reinforcing concerns that the Federal Reserve may keep interest rates higher for longer.
Additionally, the latest jobless claims report showed that more Americans applied for unemployment benefits last week. While the numbers remain far below recession levels, they still hit a three-month high, suggesting that the labor market may be softening.
As a result, the 10-year Treasury yield fluctuated throughout the morning, rising to 4.27% from 4.26%, with an earlier peak of 4.30%.
Global Markets React
Overseas, stock markets showed mixed performances.
- Germany’s DAX dropped 1.3%, reflecting broader European economic concerns.
- Japan’s Nikkei 225 gained 0.3%, supported by optimism in the Asian tech sector.
Market Outlook
With uncertainty lingering around AI competition, tariffs, and inflation, Wall Street is likely to remain volatile in the short term. Investors will closely watch upcoming economic data releases and the Federal Reserve’s stance on monetary policy, which could further shape market sentiment in the coming weeks.
