TLDR
- US stock markets declined as President Trump confirmed tariffs on Mexico and Canada will proceed
- Nasdaq fell 1.2% with tech companies like Nvidia dropping 3% amid tariff concerns
- S&P 500 extended its losing streak to three days while the Dow Jones remained relatively stable
- Bitcoin prices hit a three-month low, falling below $90,000
- Investors are focused on Nvidia’s upcoming earnings report and January’s PCE inflation data
The US stock market experienced notable declines on Monday and continued mixed performance on Tuesday as investors processed President Donald Trump’s commitment to implement tariffs on Mexico and Canada when the current delay period ends next week. The technology sector led the downturn, with particular focus on how these trade policies might affect major players like Nvidia ahead of its highly anticipated earnings report.
On Monday, the tech-heavy Nasdaq Composite dropped 1.2%, while the S&P 500 fell 0.5%. The Dow Jones Industrial Average showed more resilience, remaining relatively unchanged after experiencing its worst week since October. Tuesday’s trading continued this pattern, with the S&P 500 hovering near flat as it attempted to break a three-day losing streak, while the Nasdaq shed another 0.4%. The Dow Jones outperformed its peers, gaining approximately 183 points or 0.4%.
During a press conference on Monday, President Trump confirmed that tariffs on Mexico and Canada would “go forward on time, on schedule” once the month-long delay expires next week. This announcement intensified concerns among both American consumers and businesses about the potential economic impact of these trade policies.
The cryptocurrency market also showed signs of weakness, with Bitcoin prices falling below $90,000, reaching their lowest level in three months. The leading cryptocurrency is now trading almost 20% below its all-time high, which was reached on President Trump’s inauguration day in January 2025.
Tech stocks particularly affected by downturn
Tech stocks have been particularly affected by the market downturn. Nvidia, whose earnings report on Wednesday is widely viewed as the highlight of the week, saw its shares fall 3% on Monday and an additional 0.6% on Tuesday. The company’s stock is now down 3.5% for the year, marking a significant shift from its previous strong performance.
Microsoft also lost ground following an analyst report suggesting the company is pulling back on data center construction plans. These tech sector declines have been substantial enough to pull the Nasdaq into negative territory for the year to date.
Not all tech news was negative, however. Apple’s stock showed modest gains after the company pledged to spend and invest $500 billion in the United States, potentially offsetting some concerns about overseas manufacturing and trade issues.
Home Depot provided a bright spot in Tuesday’s market after reporting fourth-quarter figures that exceeded analyst expectations. This positive earnings report boosted the company’s stock by approximately 2%, contributing to the Dow’s relative outperformance.
Investor attention is now focused on several key economic reports scheduled for release this week. The Conference Board’s consumer confidence index for February is expected to show a reading of 102.3, lower than January’s 104.1, indicating potential consumer concerns about economic conditions.
Friday will bring the January report for the Personal Consumption Expenditure (PCE) index, which serves as the Federal Reserve’s preferred measure of inflation. This data could provide important insights into the trajectory of interest rates and monetary policy.
Additional reports on US GDP, housing market conditions, and further consumer confidence metrics are also expected in the coming days, all of which could influence market sentiment and trading patterns.
Analysts remain optimistic
Some market analysts remain optimistic about longer-term trends despite the current volatility. Doug Clinton, a managing partner at Deepwater Asset Management, commented on CNBC that while investors “almost want to believe that the AI trade is over” and are “looking for evidence and reasons to doubt,” his perspective is that “the AI trade is still real” and that the boom could continue for “two to four years.”
Beyond North American trade concerns, investors are also monitoring reports that the White House is preparing for tighter restrictions on China’s semiconductor exports, according to Bloomberg News. This development adds another layer of complexity to the technology sector outlook and global trade dynamics.
As markets navigate these various factors, the upcoming Nvidia earnings report will be closely watched for insights into how the AI chipmaker is handling the threat of tariffs, maintaining demand from Big Tech companies, and competing with potentially lower-cost technology from China-based competitors like DeepSeek.
The current market environment reflects a careful balancing act as investors weigh the potential impacts of trade policies against company-specific developments and broader economic indicators, with technology stocks currently bearing the brunt of this uncertainty.
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