Nasdaq correction deepens as investors react to tariff uncertainty
REUTERS/BRENDAN MCDERMID/FILE PHOTO
Specialist traders work inside a post on the floor at the New York Stock Exchange in New York City, on Dec. 2. Wall Street stocks finished lower today, with the Nasdaq confirming it has been in a correction since December, weighed down by market jitters over the current uncertainty surrounding U.S. trade policy.
NEW YORK >> Wall Street stocks finished lower today, with the Nasdaq confirming it has been in a correction since December, weighed down by market jitters over the current uncertainty surrounding U.S. trade policy.
President Donald Trump announced today that goods from Canada and Mexico covered by the U.S.-Mexico-Canada trade agreement (USMCA) will be exempted for a month from the 25% tariffs imposed earlier this week. The development comes a day after Trump exempted automotive goods from the tariffs.
Trump had earlier only mentioned an exemption for Mexico, but later signed an amendment to his order that now covers Canada as well.
“The fog of confusion is getting thicker by the moment unfortunately,” said Mark Malek, chief investment officer at SiebertNXT in New York.
“We are getting a lot of just different conflicting information: tariffs are on, tariffs are off, some tariffs are off and so forth.”
The S&P 500 lost 103.98 points, or 1.78%, to end at 5,738.65 points, while the Nasdaq Composite lost 483.97 points, or 2.61%, to 18,068.76. The Dow Jones Industrial Average fell 430.93 points, or 1.00%, to 42,575.66.
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“The uncertainty created by rapidly shifting policy pronouncements can damage investment in particular and hurt the economy,” said Bill Sterling, global strategist at GW&K Investment Management.
“The other thing that investors are concerned about is the size of the tariffs. This is way beyond what was experienced in 2018 and could raise inflation.”
Automaker General Motors ended lower while its counterpart Ford also finished lower. Tesla fell as brokerage Baird naming the electric carmaker a “bearish fresh pick”.
Marvell slumped after the chipmaker’s results failed to impress investors. Other semiconductor makers were lower, including Broadcom and Nvidia, pulling the broader chip index down.
Kroger rose after forecasting annual same-store sales largely above estimates.
“With the constant barrage of geopolitical news – the tariffs on and then off again – confidence is getting a little bit leaky and it’s not surprising sentiment is not great,” said Jack Janasiewicz, portfolio manager at Natixis Investment Managers Solutions in Boston.
“We are also starting to see economic data slow at the margin. You put all these things together and it’s not surprising you’re starting to see chips come off the table.”
Data shows that the number of Americans filing new applications for unemployment benefits fell more than expected last week. Investors will be eyeing Friday’s more comprehensive payrolls data.
Traders now see the Federal Reserve lowering borrowing costs by 25 basis points for the first time this year in June, according to data compiled by LSEG.
Philadelphia Fed President Patrick Harker said that trouble may be brewing for an economy that is currently in good shape but showing signs of stress in the consumer sector and risks to the inflation outlook.
