Dow slides 427 points as US tariffs, White House policy shifts, and AI stock losses shake investor confidence
Stocks extended their decline on Thursday as White House concessions on President Donald Trump’s tariff policies failed to stabilize investor sentiment, according to CNBC.
The Dow Jones Industrial Average fell 427.51 points, or 0.99 percent, closing at 42,579.08 after dropping more than 600 points earlier in the session.
The S&P 500 declined 1.78 percent to 5,738.52, while the Nasdaq Composite dropped 2.61 percent to 18,069.26, officially entering correction territory with a 10 percent decline from a recent high.
Markets have been under pressure this week following the implementation of US tariffs on Canadian, Mexican, and Chinese imports.
In response, Canada and China introduced retaliatory measures, while Mexico announced it would unveil its response over the weekend.
The Nasdaq has lost more than 4 percent this week, while the Dow and S&P 500 have fallen around 2.9 percent and 3.6 percent, respectively.
All three indexes are on track for their worst week since September 2024.
Thursday’s losses followed a brief rally on Wednesday after the White House announced a one-month delay on tariffs for automakers complying with the United States-Mexico-Canada Agreement (USMCA).
Investors had hoped for further policy rollbacks to mitigate the economic impact.
However, Trump’s Thursday announcement of an additional one-month extension on tariffs for certain Canadian and Mexican goods under the USMCA failed to generate similar market gains. Uncertainty surrounding the policy remained high.
Investor concerns intensified in the afternoon after Treasury Secretary Scott Bessent defended the administration’s tariff approach. His comments raised doubts about the White House’s willingness to make further compromises.
Bessent stated at an Economic Club of New York event that “to the extent that another country’s practices harm our own economy and people, the United States will respond,” calling it “the America-first trade policy.”
He also referred to Prime Minister Justin Trudeau as a “numbskull” and emphasized the administration’s focus on Main Street over Wall Street.
Market strategists noted investor fatigue from the frequent policy shifts and statements.
“You’re just having confusion,” said Keith Lerner, chief market strategist at Truist. “That confusion is permeating into the day-to-day swings of the market.”
The ongoing selloff in artificial intelligence-related stocks added to Thursday’s decline. Marvell Technology shares plunged nearly 20 percent after issuing mixed first-quarter guidance.
Other semiconductor stocks, including ON Semiconductor, Taiwan Semiconductor, and Nvidia, also declined.
Economic data released Thursday heightened concerns about the potential impact of Trump’s policies.
The Federal Reserve’s Beige Book and the Institute for Supply Management’s manufacturing report pointed to fears of rising input costs due to tariffs.
Challenger, Gray & Christmas reported that layoff announcements had surged to their highest level since 2020, attributing the increase to Trump and billionaire Elon Musk’s efforts to reduce the federal workforce.
These developments come ahead of Friday’s closely watched US jobs report.
