US stocks were mixed on Thursday as investors reacted to President Trump's new tariff threats and digested the latest earnings reports from major companies. The Dow Jones Industrial Average (DJI) rose 0.5%, gaining over 200 points, while the S&P 500 (GSPC) hovered near the flat line. The tech-heavy Nasdaq Composite (IXIC) slipped 0.8%, dragged down by a decline in semiconductor stocks following Nvidia's earnings report.
Nvidia (NVDA) initially saw gains after posting a strong quarterly performance but reversed course as concerns grew over its profit outlook and AI demand. Meanwhile, jobless claims came in higher than expected, signaling a potential softening in the labor market, while the US economy grew at an annualized 2.3% last quarter, which is in line with estimates.
Market Movers:
- Nvidia (NVDA) ↓ 4% – The AI chip leader fell despite strong earnings as Wall Street focused on its lower-than-expected gross margin guidance. Analysts pointed to concerns over AI demand and increased costs as reasons for the decline. Investors also worried that supply chain constraints and geopolitical tensions could impact future growth.
- Warner Bros. Discovery (WBD) ↑ 8% – The media giant surged after reporting a stronger-than-expected increase in streaming subscribers. The company added 6.4 million global subscribers, beating estimates of 4.9 million. CEO David Zaslav highlighted improved ad revenue and cost-cutting measures as key factors driving profitability in the streaming segment.
- Microsoft (MSFT) ↓ 0.7% – The tech giant slipped after calling on the Trump administration to revise AI export restrictions. The company criticized last-minute Biden-era rules that limit AI chip exports and data center expansion abroad. Investors fear that regulatory uncertainty could hinder Microsoft’s ability to scale its cloud and AI businesses internationally.
- Bitcoin (BTC-USD) ↓ 2% – The cryptocurrency pulled back from post-election highs as investors reacted to Trump's tariff announcements and shifting sentiment in risk assets. The sell-off followed a broader decline in speculative assets, with some analysts predicting continued volatility as regulatory scrutiny over crypto markets intensifies.
Tariffs and Trade Tensions
Markets were shaken by President Trump’s announcement that new tariffs on Mexico and Canada would take effect on March 4, alongside an additional 10% levy on Chinese imports. The move raised concerns about escalating trade tensions and potential economic fallout, particularly in manufacturing and tech sectors that rely on global supply chains.
The US dollar strengthened on the news, while the Canadian dollar and Mexican peso fell. Investors are watching for any signs of retaliation from affected countries, which could impact multinational corporations with exposure to these markets.
Economic Data and Federal Reserve Outlook
The latest jobless claims report showed 242,000 new filings, higher than the 221,000 economists had expected. The data suggests some softening in the labor market, though the overall employment picture remains resilient.
The US economy grew at an annualized 2.3% pace last quarter, in line with forecasts, reinforcing expectations that the Federal Reserve will remain cautious about interest rate cuts. Investors are now looking ahead to Friday’s release of the Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation gauge, which could influence the central bank’s next steps on monetary policy.
Looking Ahead
With markets on edge over trade tensions and economic data, the PCE report will provide further clarity on inflation trends. Additionally, investors will monitor any updates from the Trump administration regarding tariffs and corporate earnings from key companies in the coming days.
Despite near-term volatility, the broader market remains focused on the Fed’s path for rate cuts and the resilience of corporate earnings. Tech stocks, particularly in AI and semiconductors, could continue to see choppiness as investors assess growth potential against macroeconomic risks.