Wall Street turmoil deepens amid Trump tariff uncertainty
Wall Street turmoil deepens amid Trump tariff uncertainty: The turmoil on Wall Street showed no signs of abating on Thursday as investors grappled with growing uncertainty surrounding President Donald Trump’s trade policies. Stocks fell sharply throughout the day, reflecting the market’s difficulty interpreting mixed signals from the White House. Major indexes still ended in losses despite Trump’s announcement that he would delay tariffs on all Mexican and Canadian products covered by the USMCA free trade agreement by a month.
Commerce Secretary Howard Lutnick had previously suggested such a delay would be possible in an interview with CNBC, but the move did little to restore confidence among traders. The Dow Jones Industrial Average fell 428 points, or 0.99%, while the broader S&P 500 fell 1.78%. The tech-heavy Nasdaq Composite was the biggest loser, falling 2.61%, officially entering correction territory after a 10% decline from its December high. The ongoing volatility underscores investors’ deep concerns about the administration’s unpredictable business strategy.
The latest declines gave the Dow its worst week since March 2023, while the S&P 500 and Nasdaq are set to face their biggest weekly losses since September 2024. Uncertainty over Trump’s trade policies has created a challenging environment for markets, with the Nasdaq down more than 7% and the S&P 500 down more than 4% since Trump took office.
Wall Street turmoil deepens amid Trump tariff uncertainty
The continued volatility has raised concerns among market analysts, who warn that prolonged unpredictability could have long-term consequences for economic growth. The ongoing back-and-forth on tariffs is having a profound impact on corporate decision-making, according to Rob Haworth, senior investment strategist at US Bank Wealth Management. “Over time, that uncertainty will have a significant impact on business decisions and future earnings growth prospects,” Haworth said. Market observers say investors are hesitant to commit capital as they await clear policy direction from Washington.
Investors are increasingly concerned about recent data highlighting the extent of job cuts in the labor market. According to a recent report by Challenger, Gray & Christmas, U.S. employers announced plans to cut 172,017 jobs last month, a 103% increase from January and the highest number in February since 2009. The alarming increase in job cuts has stoked fears of an economic slowdown, further denting confidence in the stock market.
Early Thursday, Dow-linked futures had already fallen in response to these labor market woes, deepening concerns that the broader economy could be slowing. Investors are eagerly awaiting the government’s next jobs report, due out on Friday by the Bureau of Labor Statistics, which will provide more insight into the health of the employment sector. Many fear that the stock market could face deeper losses in the coming weeks if economic indicators continue to weaken.
Meanwhile, the frenzy surrounding artificial intelligence investments has been dampened by mixed earnings results from major tech companies. Futures tied to the Nasdaq 100 fell as AI-related companies struggled to meet investor expectations. Shares of key chipmaker Marvell Technologies (MRVL) fell nearly 20% after disappointing guidance for the year. Other AI heavyweights including Nvidia (NVDA) and Palantir (PLTR) also fell, pushing the Nasdaq lower.
The sell-off raises critical questions about whether the massive capital inflows into AI research and development are justified or whether the sector is facing an unsustainable bubble. Adding to the uncertainty, Chinese tech giant Alibaba has introduced its own AI model, intensifying competition in an already crowded space. The move has led some analysts to question whether U.S. tech companies can maintain their competitive edge or whether international rivals will erode their dominance. The sharp decline in AI-related stocks highlights growing doubts about whether the industry can sustain its rapid expansion amid broader economic concerns.
The sudden reversal of Wednesday’s market rally underscores the fragile state of investor sentiment. After a solid performance in the previous session, the market quickly turned negative as traders digested the latest trading developments. Uncertainty surrounding Trump’s tariff policies is weighing on investors, especially at a time of rising trade tensions between the U.S. and its major partners. The lack of clear direction has fueled fears of an economic slowdown, with some experts warning that tariff-induced inflation could push the economy into recession, a worrisome scenario characterized by sluggish growth and rising prices.
“For now, slowing growth amid tariff-induced inflation could push the economy dangerously close to stagflation,” LPL Financial Chief Economist Jeffrey Roach said in a note on Wednesday. The economic outlook has added pressure on the Federal Reserve, which is struggling to balance controlling inflation with maintaining financial stability.
The U.S. dollar index, which measures the dollar’s strength against a basket of six major currencies, fell to its lowest level since November, another worrying sign for the economy. The decline suggests investor confidence in U.S. economic growth is waning, as a weaker dollar typically signals a weakening global outlook for the country. As markets prepare for a key jobs report on Friday, analysts are stressing the importance of hard economic data in shaping future market moves.
“If we see hard data turn too weak, that becomes even more worrisome for the market,” Haworth said. As reflected in CNN’s Fear and Greed Index, the prevailing sentiment among investors is one of extreme fear. With volatility likely to continue, all eyes are now on upcoming economic indicators and policy decisions that will determine whether Wall Street’s turbulent journey continues or stability can be restored in the coming weeks.