Stock Market Today: Tariffs Trigger Turmoil on Wall Street
Market Indexes Plummet as Trade War Fears Intensify
On Monday, February 3, 2025, the stock market experienced a significant downturn as investors grappled with the implications of President Donald Trump’s newly imposed tariffs on Canada, Mexico, and China. The market news today is dominated by concerns over a potential full-blown trade war and its impact on the global economy.
As of 9:35 a.m. Eastern time, the major market indexes showed substantial losses:
– The Dow Jones Industrial Average fell 435 points, or 1%,
– The S&P 500 dropped 1.4%
– The Nasdaq Composite plunged 1.8%
These declines reflect the stock market today responding to the heightened economic uncertainty. Futures markets had indicated an even steeper drop, with Dow futures down 1.32%, S&P 500 futures declining 1.55%, and Nasdaq 100 futures falling 1.86% in pre-market trading.
Why Is the Market Down Today?
The primary reason why is the market down today can be attributed to President Trump’s announcement of new tariffs:
1. 25% tariff on imports from Mexico and Canada
2. 10% tariff on imports from China
These measures have stoked fears of retaliatory actions and a potential escalation of global trade tensions. The Mexican peso and Canadian dollar have both weakened against the U.S. dollar in response to the news.
Major Stock News and Corporate Developments
Several prominent stocks are making headlines in today’s turbulent market:
– Nvidia (NVDA): The AI giant’s stock crashed, losing 5.3% following reports of a Chinese competitor developing a comparable large language model.
– Apple (AAPL) and Microsoft (MSFT): Both tech giants saw their stocks decline by nearly 2% each.
– Ford (F) and General Motors (GM): The automakers’ shares dropped 4.1% and 6.7% respectively, as they are particularly vulnerable to tariffs on Mexican imports.
– Coinbase (COIN): The cryptocurrency exchange operator’s stock fell 5.7% as Bitcoin prices tumbled in the risk-off environment.
Upcoming Market Events and Earnings Releases
Despite the market turmoil, several important events and earnings releases are scheduled for this week:
1. Alphabet (GOOGL), AMD (AMD), PayPal (PYPL), and Eli Lilly (LLY) are set to report their quarterly earnings.
2. The January manufacturing activity report is expected later today.
3. The crucial January non-farm payrolls report is due on Friday, which could provide insights into the labor market’s health.
In India, companies like Aditya Birla Capital, Castrol, Divi’s Lab, and Barbeque Nation are scheduled to release their Q3FY25 earnings reports today.
Economic Data and Policy Decisions
Investors are closely watching for any signs of how the new tariffs might impact inflation and, consequently, the Federal Reserve’s monetary policy. The Fed had begun cutting interest rates in September to boost the U.S. economy, but persistently high inflation could force a reconsideration of this approach.
Market Outlook and Analyst Perspectives
Wall Street analysts are reassessing their forecasts in light of the new tariffs:
– Goldman Sachs noted that if the tariffs are sustained, it could reduce their S&P 500 earnings per share (EPS) growth forecast by roughly 2%-3%.
– Morgan Stanley expects U.S. equities to come under pressure.
However, some see potential opportunities amid the volatility. Bajaj Broking suggests that the 2025 Union Budget in India lays a solid framework for economic expansion, recommending stocks like United Spirits, Dabur India, and Exide Industries for potential growth.
As the stock market today continues to react to these developments, investors are advised to stay informed and consider the long-term implications of these trade policies on their portfolios. The coming days will be crucial in determining whether this is a short-term correction or the beginning of a more prolonged market downturn.
