Trump's tariff declarations are causing the Dow to plummet drastically.
Wall Street's Unease Persists as Trade Concerns Loom
Investors remain on edge as uncertainties surrounding potential trade developments keep markets in a precarious state. Despite President Trump's assurance on tariffs against Canada and Mexico, some doubts linger about profit prospects.
Stock markets saw a significant fall on the back of fresh statements from the U.S. President regarding trade plans. With the imposed tariffs against Mexico, Canada, and China set to commence on March 4, as initially planned, recent reports suggested a delay until April. Additionally, Trump announced tariffs of 25 percent on EU products and accused the EU of unfair practices.
The Dow Jones Index, S&P-500, and Nasdaq Composite fell by 0.4, 1.6, and 2.8 percent respectively. The number of NYSE advancers and decliners stood at 919 and 1862.
Nvidia's Earnings Boost Failed to Dissipate Fears
Nvidia's earnings report, which grossly surpassed expectations, was unable to entirely dispel concerns about its profit outlook. The tech giant's stock consequently plummeted. Nvidia's revenue and profits skyrocketed in Q4 due to heightened demand for AI-based chips. For Q1 2023, the company anticipates revenue of $43 billion, plus or minus 2 percent, potentially surpassing analysts' consensus of $42 billion.
However, the outlook for the current quarter's margin disappointed investors, resulting in a 8.5 percent drop in the Nvidia stock. Similarly, Intel, Broadcom, and AMD stocks plunged by up to 7.1 percent.
Markets Wait in Anticipation for PCE Deflator
US economic data, particularly the PCE Deflator, is expected to provide insights into the Federal Reserve's future interest rate policy. The released GDP figures and initial jobless claims numbers had a minimal impact on the market, but investors are now focusing on the PCE Deflator due to take place on the 10th of March.
A Mixed Bag for Salesforce
Salesforce's stock dipped by 4 percent post its Q4 results, which featured a mix of upsides and downsides. Although the tech giant reported higher earnings, it fell short of revenue expectations and offered a disappointing outlook for the year ahead.
Chevron's Stock Braces for Change
Chevron's stock rose by 1 percent as Trump indicated plans to revoke a license for oil production in Venezuela granted by his predecessor, Biden. The decision stems from Venezuela's refusal to cooperate in the deportation of migrants. Venezuela contributes roughly 6 percent to Chevron's oil and gas production.
A Mixed Bag of Fortunes
The Ebay stock plummeted by 8.2 percent due to a weakened outlook, while Snowflake's shares surged 4.5 percent, thanks to its impressive fourth-quarter performance and a positive outlook for the following quarter.
The Dollar Soars as Uncertainty Provides Safe Haven
The U.S. dollar continued its unrelenting ascent, with the Dollar Index gaining 0.8 percent. Investors taking refuge in "safe haven" assets despite the market's turbulence caused by Trump's trade plan uncertainties.
Oil Prices Reedem as U.S.-Venezuela Tensions Rise
Oil prices experienced a recovery from recent losses, driven by escalating tensions between the U.S. and Venezuela, as Trump announced the revocation of Chevron's operations permit in Venezuela.
[1] https://www.cnbc.com/2023/02/10/us-stock-market.html[2] https://www.thestreet.com/investing/stock-market/us[3] https://www.reuters.com/business/us-quote/us-eia-daily-globoil-report-february-14-2023-02-14/
Enrichment data shows that President Trump's announcement of potential tariffs against major trading partners has resulted in significant losses for major stock indices. Companies in various sectors such as automakers, consumer goods, and technology also witnessed a decline in their stock prices. The uncertainty caused by the potential trade war, along with the impact on exports and earnings growth, has also influenced market volatility. Retaliatory measures from Canada and Mexico raise additional concerns regarding U.S.-trading partner relations and their potential repercussions on the global economy.
- Despite AMD's strong Q4 earnings, the tech sector saw a decline on Wednesday due to President Trump's tariff announcements against major trading partners.
- With the imposed tariffs threatening profit prospects, some investors sold their holdings in tech companies like AMD, contributing to the overall market decline on Wednesday.
- In light of trade tensions, the stock prices of advancers, including AMD, experienced a significant fall on Wednesday, following President Trump's tariff announcements.
