The volatility on Wall Street continued Thursday as investors grappled with escalating concerns surrounding President Donald Trump’s trade policies. Despite mixed signals from the White House, US stocks opened sharply lower and ended the day in the red.
On Thursday morning, US Commerce Secretary Howard Lutnick suggested to CNBC that President Trump would announce a one-month delay on tariffs affecting goods under the USMCA free trade agreement. However, this announcement failed to provide much relief to investors, who remained uncertain about the administration’s trade strategies. As a result, all three major indexes closed lower.
The Dow Jones Industrial Average fell by 428 points, or 0.99%, while the S&P 500 dropped by 1.78%. The Nasdaq Composite plummeted by 2.61%, officially entering correction territory, down 10% from its peak in December. This marks the Nasdaq’s first correction since the record high reached in late 2023.
As a result, the Dow is now on track to close the week nearly 3% lower, setting the stage for its worst performance since March 2023. The S&P 500 and Nasdaq are both headed for their worst weekly performance since September 2024.
The ongoing decline in US stocks can be partly attributed to the uncertainty surrounding President Trump’s tariffs, which have weighed heavily on market sentiment. Since Trump assumed office, the Nasdaq has dropped over 7%, while the S&P 500 has fallen more than 4%.
According to Rob Haworth, senior investment strategist at US Bank Wealth Management, this persistent uncertainty is taking a toll on investor confidence. “Eventually, this uncertainty will overwhelm business decision-making and hurt earnings growth projections,” he stated.
Adding to the pressure, recent economic data revealed an alarming surge in job cuts. In February, US employers announced plans to eliminate 172,017 positions, marking a 103% increase compared to January and the highest February total since 2009. The rise in layoffs is stoking further concerns about the strength of the US labor market.
Additionally, mixed earnings results from companies involved in the booming artificial intelligence sector also weighed on the market. Marvell Technologies, a leading chipmaker, saw its stock plummet nearly 20%. Nvidia and Palantir also experienced significant declines, contributing to the Nasdaq’s downturn.
Meanwhile, Chinese tech giant Alibaba unveiled its own AI model, putting pressure on US-based firms like DeepSeek and OpenAI. This raised doubts about the sustainability and profitability of the AI boom in the US.
Thursday’s sell-off marked a stark reversal from Wednesday’s rally, underscoring the market’s lack of clarity regarding the future of the US-China trade conflict. Jeffrey Roach, chief economist at LPL Financial, warned that “tariff-induced inflation coupled with slower growth could push the economy dangerously close to stagflation.”
Compounding the uncertainty, the US dollar index fell to its lowest point since November, signaling a weakening outlook for the US economy. Investors are now awaiting the government’s monthly jobs report, due Friday, to gain further insights into the state of the labor market and the economy at large.
Rob Haworth emphasized that if the economic data continues to show weakness, it could trigger further concern among investors. According to CNN’s Fear and Greed Index, the prevailing sentiment driving the market is one of “extreme fear.”
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