The stock market today has seen a mixed reaction after a top official announced that some tariffs on imports could be eased soon. The Dow Jones Industrial Average, alongside other major indexes, pared its earlier losses. While the market experienced volatility, this shift in tariff policy brought some optimism, leading to a partial recovery.
The market was initially hit by significant losses on Thursday, but there’s been a notable rebound, particularly in the Nasdaq and the S&P 500. However, investors remain on edge as tariff concerns continue to loom large. In this post, we’ll break down the stock market movements, analyse key factors influencing these shifts, and offer insights into which companies are making waves in today’s market.
Stock Market Moves: Dow Jones and Other Major Indexes
On Thursday, the Dow Jones Industrial Average managed to reduce its losses, recovering from an early 1.4% dip to close down just 0.3%. This was a significant shift in sentiment after a troubling start. Similarly, the Nasdaq Composite trimmed its losses to 0.9%, while the S&P 500 finished the day down by 0.7%. The small-cap Russell 2000 Index was also down 0.5%.
Despite these declines, the market showed signs of recovery:
- The Nasdaq is now trying to regain its 200-day moving average, a key technical indicator.
- The S&P 500 remains above its 200-day line, suggesting resilience in the broader market.
- Trading volume was up on both the NYSE and Nasdaq compared to the previous day, signalling heightened activity and investor interest.
The Innovator IBD 50 ETF (FFTY) showed a reduction in its loss to 1.6%, which indicates that growth stocks are also finding some support in this turbulent market environment.
Tariff Uncertainty and Market Sentiment
Commerce Secretary Howard Lutnick made headlines with his statement that certain tariffs on imports from Canada and Mexico, as part of the USMCA free-trade agreement, are likely to be eased. This news provided much-needed relief to investors who had been concerned about the impact of tariffs on businesses and the broader economy.
The easing of tariffs, particularly on Canadian and Mexican goods, offers a glimmer of hope in the ongoing trade tensions. However, traders remain cautious, as these exemptions might be short-lived or limited in scope. The possibility of further tariffs being imposed outside of the auto industry is still a concern, and this uncertainty has kept investors on edge.
Earnings Reports Drive Stock Movements
Chipmakers, particularly Broadcom (AVGO) and Marvell Technology (MRVL), were major losers on Thursday following earnings reports. Broadcom dropped more than 4% but found support at its 200-day moving average, which could indicate potential for a rebound.
Marvell Technology had an especially tough day, plunging nearly 19% after a weaker-than-expected earnings report for its fiscal fourth quarter. Despite narrowly beating analyst estimates, Marvell issued a modest outlook for the upcoming quarter, which led to a sell-off. The market’s reaction to Marvell’s earnings is a stark reminder of how sensitive tech stocks, especially semiconductor companies, are to earnings surprises.
Meanwhile, other earnings movers included:
- JD.com (JD), which advanced by nearly 1%, continuing to rise above a buy point of 43.63.
- Veeva Systems (VEEV), which surged nearly 7% following a strong earnings report.
- Zscaler (ZS), which rallied 4% in the morning, showing positive momentum in the cybersecurity sector.
Tariffs and Jobless Claims: Economic Data and Market Impact
The market also took cues from the latest economic data. The Labor Department reported that weekly unemployment claims fell sharply to 221,000, down from 242,000 in the previous week. This figure was better than expected, as analysts had forecasted a rise to 244,000. The fall in jobless claims signals a strong labour market, which could fuel optimism for consumer spending and economic growth in the months ahead.
However, the tariff issue continues to overshadow these positive data points. While some sectors are benefiting from tariff exemptions, concerns about the broader economic impact of ongoing trade tensions remain.
Tech Stock Sell-Off: Nvidia and Tesla Face Volatility
Nvidia (NVDA) and Tesla (TSLA) have been particularly volatile in recent days. Nvidia shares advanced 1.1% on Wednesday after hitting its lowest level since September 11. However, it faced a 3% drop in Thursday’s morning trading, reflecting concerns about the future of the semiconductor industry.
Tesla, after rebounding 2.6% on Wednesday, faced a 4.5% sell-off in early Thursday trading. This continued volatility in Tesla’s stock has been concerning for investors, as the company’s shares have been struggling to stay above key technical levels, including the 200-day moving average.
Key Insights: Navigating the Current Stock Market
As we navigate through these turbulent times, here are a few key insights to keep in mind:
- Market Sentiment: The overall sentiment remains cautious, with tariff concerns and earnings volatility creating uncertainty. However, there’s also room for optimism, especially with potential tariff reductions and strong jobless claims data.
- Tech Sector: The semiconductor sector, especially companies like Broadcom and Marvell, has been particularly hard-hit. This could present opportunities for traders looking for rebounds in beaten-down stocks.
- Economic Indicators: Positive data, like the decline in jobless claims, should provide support for the market, but they must be weighed against the ongoing trade tensions.
Photo credit: Moneycontrol
