Market Recap: Stocks Retreat as Trump Tariffs Loom and Nvidia Plunges
The U.S. stock market experienced a significant downturn on Monday, March 3, 2025, as investors grappled with looming tariff deadlines and a sharp decline in tech giant Nvidia. The major indexes all closed in negative territory, extending February’s losses and setting a cautious tone for the new month.
Major Index Performance
As of the market close:
– The S&P 500 (^GSPC) fell 57.68 points or 0.97% to 5,896.82
– The Dow Jones Industrial Average (^DJI) dropped 387.92 points or 0.88% to 43,452.99
– The Nasdaq Composite (^IXIC) plummeted 268.39 points or 1.42% to 18,578.89
These declines come on the heels of a volatile February, where all three major indexes ended the month in negative territory. The Dow and S&P 500 each slipped more than 1% in February, while the tech-heavy Nasdaq Composite recorded its worst month since April 2024 with a pullback of 4%.
Tariff Concerns Weigh on Markets
The primary driver of market uncertainty is the impending implementation of President Donald Trump’s tariff policies. A 25% levy on Canadian and Mexican goods is scheduled to begin on Tuesday, March 4, 2025. However, Commerce Secretary Howard Lutnick indicated on Sunday that the exact tariff rate is still “fluid” and could potentially be lower than the proposed 25%.
Additionally, an extra 10% duty on Chinese imports appears to be “set,” according to Treasury Secretary Scott Bessent. These tariff concerns have reignited fears of inflation and potential economic slowdown, contributing to market volatility.
Tech Sector Leads Decline
The technology sector, particularly semiconductor stocks, faced significant pressure on Monday. Nvidia (NVDA), the AI chip giant, saw its stock plummet by 7.16% to $115.98.
Other notable tech movements included:
– Intel (INTC): Up 0.63% to $23.88
– Palantir Technologies (PLTR): Gained 2.39% to $86.95
– Tesla (TSLA): Fell 2.11% to $286.80
Cryptocurrency Surge
In contrast to the stock market’s decline, cryptocurrencies experienced a significant rally. Bitcoin traded above $90,000 following President Trump’s announcement on Sunday that he would proceed with a strategic reserve including bitcoin, ether, and three smaller tokens. This news boosted crypto-sensitive stocks such as Coinbase and MicroStrategy in pre-market trading.
Upcoming Market Events
Investors are closely watching several key events this week that could impact market direction:
1. President Trump’s address to Congress on Tuesday, which may provide clarity on his economic policies.
2. Major retail earnings reports, including Target and Best Buy on Tuesday, and Macy’s and Kroger on Thursday.
3. Semiconductor company Broadcom’s earnings report on Thursday.
4. The official February jobs report, scheduled for release on Friday.
Economic Outlook
Goldman Sachs strategists have warned that any rebound in the S&P 500 is likely to be temporary as the U.S. economy shows signs of slowing down. The firm revised its 2025 earnings per share growth forecast from 11% to 9% while maintaining its 2026 growth forecast at 7%.
Market Sentiment
The CBOE Volatility Index (VIX), often referred to as the “fear gauge,” closed at 19.63 on Friday, down 7.1% from the previous session. However, during intraday trading, it touched 22.40, its highest level since January 27, indicating persistent investor anxiety.
As markets navigate through these uncertain times, investors remain cautious, closely monitoring economic data, corporate earnings, and geopolitical developments. The upcoming jobs report on Friday will be a crucial test for U.S. equities and may provide further insight into the health of the economy amidst ongoing trade tensions and policy uncertainties.
