The stock market faced a significant setback on March 26, 2025, as worries over potential tariffs led to a sell-off, especially in the technology sector. Bellwether stocks, including Nvidia, Tesla, and Broadcom, saw steep declines after fresh concerns over tariffs emerged. The Nasdaq Composite closed 2% lower, while the S&P 500 fell 1%. The Dow Jones Industrial Average dropped by 132.71 points, closing at 42,454.79.
Tariffs on Autos and Microchips Fuel Selling Pressure
The market’s decline was sparked by fears of new tariffs on various goods, ranging from cars to microchips. President Trump’s announcement that he would impose 25% tariffs on global automotive imports to the U.S. added to the unease, particularly affecting the automotive sector. After-hours trading saw auto stocks dip further.
Technology shares had been recovering recently, with the so-called “Magnificent Seven” tech stocks gaining 6.2% over the previous three sessions. However, on Wednesday, an ETF tracking these stocks fell by about 3%. Nvidia and Tesla each saw losses of more than 5%.
Shifting Investor Sentiment Amid Tariff Uncertainty
Sam Stovall, Chief Investment Officer at CFRA Research, commented on the shift in sentiment: “Last Friday, Trump mentioned that tariffs might not be as broad. But now, we’re back in defensive mode with talks of tariffs on copper and autos.”
The potential new tariffs have left investors uncertain. General Motors dropped 3%, while Ford’s stock remained nearly unchanged. While market optimism had grown when the Trump administration seemed to narrow its tariff plans, uncertainty remains high ahead of the expected announcement of new levies on April 2.
Economic Data and Investor Reactions
Despite the volatility in the stock market, U.S. economic data showed signs of strength. Durable goods orders rose 0.9% in February, surpassing expectations for a 1% decline. However, the ongoing tariff threats have dampened both consumer and business sentiment.
In response to market turmoil, investors moved away from growth stocks, opting for safer investments in sectors that typically perform better during economic downturns, such as consumer staples and utilities. Companies like Hormel Foods and Tyson Foods saw gains of nearly 3%.
Notable Stock Movements
While the broader market struggled, some stocks performed well. GameStop shares surged by 12% after the company reported strong results and announced plans to invest in Bitcoin. Dollar Tree also saw a 3.1% increase after securing a $1 billion deal to sell its Family Dollar business.
Market Indicators
The yield on the benchmark 10-year Treasury note closed at 4.34%, up from 4.307% on Tuesday. Copper futures hit a new high of $5.216 per pound, marking a 0.64% increase for the day and a 3% gain over the past two sessions. The White House has hinted at potential tariffs on copper imports, further adding to market uncertainty.
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