Stock Market Suffers Worst Weekly Decline in Six Months Amid Trade and Economic Uncertainties
The U.S. stock market experienced its most significant weekly downturn in six months, as investors grappled with uncertainties surrounding trade policies and economic forecasts. The shift to a risk-off sentiment was largely driven by the political realities of the Trump administration, including ongoing tariff issues and conflicting economic predictions.
Both the Nasdaq 100 and S&P 500 indices recorded substantial losses, with the tech-heavy Nasdaq 100 briefly entering correction territory. The S&P 500 endured its worst weekly decline since September, testing its 200-day moving average, a critical technical indicator closely watched by market analysts.
The semiconductor sector bore the brunt of the sell-off, with industry giant Nvidia facing severe declines and a significant drop in market capitalization. Marvell Technology’s weak earnings report and disappointing outlook further contributed to the sector’s downturn. However, Broadcom provided a glimmer of hope, rising 8% on strong guidance and maintaining some investor optimism in the artificial intelligence space.
In currency markets, the U.S. dollar index experienced a notable decline, contrary to expectations that inflationary pressures from tariffs would boost the currency. The unexpected drop was partly attributed to uncertainties surrounding tariffs, including last-minute exemptions under the USMCA trade agreement. President Trump’s announcement of potential reciprocal tariffs added to the market’s unease.
Meanwhile, the 10-year U.S. Treasury yield increased, influenced by a rebound in the U.S. Services PMI and a decline in jobless claims. The movement in Treasury yields was also impacted by recent economic data, including a lukewarm February jobs report.
As markets navigate through these turbulent times, investors remain cautious, closely monitoring developments in trade negotiations and economic indicators for signs of stability or further volatility.
