It was just this week that the U.S. stock market was under extreme pressure. President Donald Trump’s trade war tariff raises have stoked investor fears of more inflation, slower growth. The whole situation around the tariffs is still very much developing creating market shaking uncertainties that may continue for the next few months. The Dow Jones Industrial Average and Nasdaq Composite, meanwhile, suffered their third straight down day. They finished the week more than 2% in the red during the four-day trading week.
The Dow just fell by 201 points, about 0.5%, and S&P 500 futures are similarly retreating by that much. Futures on the tech-heavy Nasdaq-100 index declined 0.6%, adding to the bearish vibes pouring out of Wall Street’s major tech stocks. Our so-called “Magnificent Seven,” made up of high-profile companies such as Alphabet and Tesla, took one of the biggest hits from the tariffs. As a result, they’ve led the entire industry in their stock underperformance. Aerospace giant Boeing joined other prominent companies like FedEx and building materials maker Martin Marietta in testifying to the president’s misguided economic policies.
Economic uncertainty is beginning to ease amidst this stormy period. Investors do appear to have gotten used to the 10%-or-so daily and weekly swings that have marked the last few weeks. The Federal Reserve faces huge difficulties because of the approaching tariffs. They rupture agreeability by complicating the Fed’s task of bringing down inflation while fostering economic growth. Economists warn that if these levies continue, U.S. economic activity could come to a “grinding halt” by summer.
Mike Dickson, head of research and quantitative strategies at Horizon Investments, emphasized the implications of this uncertainty:
“Continued uncertainty will likely cap stock market valuations and weigh on investors until greater clarity emerges.”
The entire market felt the result of these external pressures as Nvidia shares plummeted by almost 3%. Unfortunately, this loss contributed to the overall decline in stocks. The U.S. stock market was closed on Friday in observance of Good Friday. This closure was another factor in the week’s light trading activity.
• Investors are setting a precedent by actively navigating this complex landscape. They are monitoring constantly for changes in the evolving tariff war and what it could mean for domestic sectors and larger economic trends. The next few weeks will be telling. They will determine whether these recent slumps are just a blip or if they indicate larger, long-term drops linked to choices made by the Administration.
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