Let us know about free updates
Simply sign up for US stock Myft Digest and it will be delivered directly to your inbox.
US tech stocks fell sharply on Wednesday with the shock of new Wall Street volatility as Donald Trump’s trade tariffs and uncertainty around the world’s biggest economic health focused on investors’ sentiment.
The technology-rich Nasdaq composite fell by 2%, snapping the index’s three-day consecutive profit streak. Chipmaker Nvidia and Elon Musk’s train company Tesla were among the biggest waterfalls, losing 5.7% and 5.6% respectively.
Wall Street’s wider S&P 500 gauge fell 1.1%.
The White House said Wednesday afternoon that the US president would announce new tariffs on automobile imports later that day.
These taxes are expected to be announced a week before Trump will unveil a new sweeping tariff regime if it is called “liberation day.” Next Wednesday’s announcement could include a large new taxation on large US trading partners, including Mexico and Canada, after the president previously imposed a 25% obligation on global steel and aluminum imports.
According to Peter Chill, head of macro strategy at Broker Academy Securities, Wednesday’s tech stock hike amounts to a “reality check” after profiting early in the week as concerns continue over Trump’s tariffs and weakening consumer sentiment.
“People were too comfortable on Monday, but we still find ourselves in a very tricky environment,” Tchir mentioned the 2.3% NASDAQ rally earlier this week.
Long-term US product orders rose 0.9% from the previous month in February, the Commerce Department said Wednesday it was far above the 1% decline in the FactSet poll. But an economist at investment bank Barclays noted that rising orders for vehicle parts “in the midst of tariff forecasts – related disruptions” had driven the rise.
Barclays economists also said the high-cost “capital goods” orders have fallen, suggesting that “there is a possibility that a resistance to fixed investment could be shaped from policy uncertainty.”
Consumer optimism has also shown signs of darkness in recent weeks, with data from the conference committee on Tuesday showing Americans’ prospects that the future will sink to its lowest level in 12 years.
Investors and economists are increasingly warning about the possibility of slowing US growth, just as Trump’s escalating world trade war increases prices.
Recommended
“You continue to have uncertainty around tariffs, and uncertainty usually means investors aren’t being tolerated by highly valuation stocks like the high-tech sector,” said Kristina Hooper, Chief Global Market Strategist at Invesco.
“But you also have uncertainty about the future of the economy,” she added. “Soft data is very concerned and raises more questions about the risk of the US economy falling into a recession.”
Federal Reserve policymakers significantly reduced their growth forecasts for the US economy last week, whilst increasing their inflation outlook. The Bureau of Economic Analysis is scheduled to release a new report on inflation on Friday.
