U.S. stock markets experienced a significant decline on Thursday, as technology stocks sold off following Nvidia’s (NVDA) disappointing earnings report, and investors processed new economic data amid President Donald Trump’s renewed tariff threats.
The S&P 500 (^GSPC) dropped over 1.6%, while the Nasdaq Composite (^IXIC), heavily weighted in tech stocks, fell by 2.8%. The Dow Jones Industrial Average (^DJI) saw a more modest decline of 0.4%.
Nvidia’s quarterly earnings report, which initially appeared to surpass expectations, eventually raised concerns among investors. The chipmaker eased fears of slowing demand in artificial intelligence (AI) and its DeepSeek division, but its cautious profit outlook led to doubts on Wall Street. Nvidia’s stock, which had initially risen in pre-market trading, reversed course and plummeted by more than 8%.
Economic data also pointed to signs of a cooling U.S. economy. The Commerce Department reported that the U.S. GDP grew at a 2.3% annualized pace in the fourth quarter, consistent with previous estimates and showing a slowdown from the prior quarter. Additionally, weekly initial jobless claims rose to 242,000, surpassing economists’ expectations of 221,000, signaling a softening labor market.
Investors are now awaiting Friday’s release of the Federal Reserve’s preferred inflation measure, the Personal Consumption Expenditures (PCE) index, for further clues on the economic outlook. With speculation mounting about potential interest rate cuts, market participants remain uncertain about the direction of monetary policy.
Amid these developments, President Trump’s recent tariff threats added further volatility. In a social media post, the president reiterated his plans to impose tariffs on Mexico and Canada starting March 4, and he reaffirmed his intention to introduce additional tariffs on China. This follows his announcement on Wednesday of a 25% tariff on goods from the European Union.
Meanwhile, Bitcoin (BTC-USD), often viewed as a barometer of investor confidence in Trump, continued its decline, falling below $84,000. The cryptocurrency is now trading near its lowest levels since November, further reflecting a pullback in market sentiment.
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