{ “title”: “U.S. Stocks Dip as AI Hype Recedes and Tariff Talk Intensifies”, “description”: “The stock market experienced a significant downturn on Thursday, driven by a slowdown in the AI technology sector and increasing anxieties about new tariffs proposed by former President Trump.”, “tags”: “stock market, Nvidia, tariffs, economy, inflation”, “rewritten_content”: “NEW YORK — U.S. stock indexes experienced a sharp decline on Thursday, marking a notable shift as the market’s fervor surrounding artificial intelligence (AI) technology began to cool. The Standard & Poor’s 500 index recorded a 1.6% fall, its fifth drop in the last six trading days, following a period of record highs last week. This downturn is largely attributed to concerns regarding the future of the U.S. economy, including anxieties about the potential impact of tariffs proposed by former President Trump, which could exacerbate inflation.
The Dow Jones Industrial Average fell by 193 points, equivalent to a 0.4% decrease, while the Nasdaq composite saw a more significant drop of 2.8%.
Nvidia, a company at the forefront of the AI boom and a major influence on the market, felt the effects most acutely. Despite initially rising at the start of trading following a favorable profit report, Nvidia quickly reversed course, ending with an 8.5% loss. The company’s chip technology has fueled the rise of AI, leading to better-than-expected earnings. However, fresh discussion of DeepSeek’s new large language model that can compete with the best without the most expensive chips may have changed investor perception of Nvidia.
According to analysts at UBS, Nvidia’s quarterly performance and its forecasts for the coming period were encouraging enough to keep the conversation moving forward. However, that was not enough to sustain the stock’s value, particularly given criticisms that its price had increased too rapidly. Nvidia’s stock more than doubled last year, after more than tripling two years prior.
Salesforce also faced losses, dropping 4% despite surpassing analysts’ profit expectations for the latest quarter. Although analysts considered the performance strong, and the company continued to highlight its AI offerings, its revenue forecast fell short of expectations.
Snowflake, an AI data cloud company, stood out, experiencing a 4.5% gain. This increase stemmed from stronger-than-anticipated profit and revenue for the most recent quarter. Despite the overall loss in the S&P 500, nearly two out of every five stocks in the index experienced growth, with Berkshire Hathaway’s 1.7% increase being a strong upward force.
Some investors have been waiting for other stocks to pick up the market’s leadership baton from Nvidia and the handful of big stocks that dominated for years. Nvidia accounted for a little more than 22% of the entire total return for the S&P 500 index last year.
In the bond market, Treasury yields fluctuated following a statement from Trump’s Truth Social account regarding tariffs on imports from Canada and Mexico, which could push up prices for U.S. households, with inflation already proving a problem. The announcement also stated an additional 10% tariff on Chinese products would take effect on the same date.
Such measures could raise prices for U.S. consumers at a time when inflation is already proving persistent. Some investors have been hoping that the tariff threats are merely a tactic to negotiate with other countries, resulting in a milder economic impact. Jeff Schmid, president of the Federal Reserve Bank of Kansas City, stated he had “become more cautious” and that discussions suggested “elevated uncertainty might weigh on growth” for the economy. The data released on Thursday left the government’s estimate for the U.S. economy’s performance during the last three months of 2024 unchanged but increased its estimate for a measure of inflation during the quarter.
According to a separate report, the number of U.S. workers applying for unemployment benefits increased last week to a three-month high. However, the number of applications is still significantly lower than during past recessions.
The yield on the 10-year Treasury in the bond market increased slightly, rising from 4.26% to 4.27%. Among stock markets overseas, indexes presented a mixed picture across Europe and Asia. Germany’s DAX decreased by 1.1%, while Japan’s Nikkei 225 rose by 0.3%.
All told, the S&P 500 fell 94.49 points to 5,861.57 Thursday. The Dow Jones industrial average dropped 193.62 to 43,239.50, and the Nasdaq composite tumbled 530.84 to 18,544.42.
“}
