Tech stocks took a hit on Thursday as Nvidia (NVDA) shares plummeted following the AI chipmaker’s earnings report, while investors grappled with the state of the economy in light of President Trump’s recent tariff promises.
The S&P 500 (^GSPC) saw a more than 1% decline, with the tech-heavy Nasdaq Composite (^IXIC) experiencing losses exceeding 2%. The Dow Jones Industrial Average (^DJI) also dipped, erasing gains to fall by 0.3%.
Investors scrutinized Nvidia’s quarterly earnings, which revealed potential for growth and allayed concerns about DeepSeek and diminishing AI demand. Despite initially being met with indifference, Wall Street raised doubts due to the company’s profit outlook, causing Nvidia’s stock to drop by more than 6%.
Additionally, signs of a sluggish U.S. economy emerged with data indicating GDP grew at a previously estimated 2.3% annualized pace in the last quarter, signaling a slowdown from the preceding quarter. Weekly initial jobless claims also surged to 242,000, surpassing economists’ expectations of 221,000, suggesting a softening labor market.
Looking ahead, investors are focusing on the Federal Reserve’s forthcoming release of the Personal Consumption Expenditures (PCE) index, expected to provide insights into economic trends amid growing uncertainty regarding interest rate cuts.
Meanwhile, attention was on President Trump’s escalating tariff threats, with the announcement of impending levies on Mexico and Canada, as well as a 25% tariff on the European Union. These developments contributed to Bitcoin (BTC-USD) prices receding below $84,000, nearing levels not seen since November.
The impact of these economic and political factors extended beyond tech stocks, affecting various sectors such as energy and financials, which outperformed while semiconductor stocks lagged. The banking sector bolstered the Dow Jones by over 200 points, though the S&P 500 struggled to stay positive.
Overall, with ongoing economic uncertainties and trade tensions, market dynamics continue to be influenced by a combination of corporate earnings, economic indicators, and geopolitical developments, shaping investor sentiment and market performance in the days ahead.