Topline
A Friday rally was not enough to reverse a brutal start to March for U.S. stocks, as investors digested a barrage of economic data and policies from President Donald Trump, particularly the uncertainty of his extensive tariffs on the country’s top three trade partners.
It’s a red March thus far in the stock market.
Key Facts
The most widely followed American stock index, the S&P 500 (down 3.1% since last Friday) registered its worst weekly losses since the week ending Sept. 6, while the Dow Jones Industrial Average (down 2.4%) suffered its worst loss since February.
That came even as the Dow rose 0.5%, or 220 points, and the S&P gained 0.6% in Friday trading as February’s jobs report came in just shy of economist forecasts.The S&P closed at its lowest end-of-week level since the week ending Nov. 1, ahead of the election.
The S&P closed at its lowest end-of-week level since the week ending Nov. 1, ahead of the election.
The tech-heavy Nasdaq Composite and the Russell 2000, which tracks smaller companies with a median market capitalization of about $1 billion, suffered even bigger percentage losses this week, as the Nasdaq fell 3.5% to its lowest end-of-week price since early October and the Russell sank 3.9% to its lowest level since June.
Driving the losses were flipflops from Trump on tariffs, as his 25% levies on Canadian and Mexican goods and 10% additional duty on Chinese imports went into effect Tuesday, before delaying most of the Canadian and Mexican tariffs until April on Thursday, and then teasing new tariffs on some Canadian goods Friday.
Crucial Quote
“I’m not even looking at the market,” Trump said Thursday, before adding there will be “a little short-term interruption.”
Big Number
More than $3 trillion. That’s how much market value has been wiped out from the S&P from its Feb. 19 all-time high, according to FactSet data, as the index fell 6%.
Tesla, Nvidia Stocks Lead Stock Market Slide
In terms of market value lost, Elon Musk’s car company Tesla and artificial intelligence chip designer Nvidia are the two biggest losers dating back to Feb. 19, as Nvidia lost $712 billion in market cap and Tesla $322 billion in that timeframe. In addition to Nvidia and Tesla, a slew of big-name companies suffered 8% or greater stock selloffs this week, including American Express, Bank of America, Boeing, Citigroup, Costco, Goldman Sachs, JPMorgan Chase, Morgan Stanley, Netflix and Wells Fargo.
Key Background
Beyond the likely negative impact on corporate earnings, at least in the short term, of tariffs, the constantly shifting tariff implementation dates and exceptions have led to heightened uncertainty, something investors largely despise. “It seems as if there have been very few times in markets where one has to interpret so much disparate, and at times conflicting, data relative to the economy and influences on it,” Rick Rieder, the head of BlackRock’s global allocation investment team, wrote to clients Friday. Stocks initially soared after Trump’s November win, as the Dow tacked on about 3,000 points in the three weeks after the election, gains spurred by prevailing hopes of corporate tax cuts and more lax regulations, before sentiment soured as Trump enacted his economic agenda. Trump’s “policies appear to be tilting towards a less business-friendly stance,” remarked JPMorgan Chase economists Bruce Kasman and Joseph Lupton in a Friday note. The S&P is down about 4% dating back to Trump’s January inauguration.
Further Reading
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