After a significant decline of over 2% on Thursday, the Nasdaq has completely erased all its post-election gains, now lagging behind with its lowest performance since Donald Trump’s election. Investors are clearly concerned, influenced by rising tariffs, disappointing employment statistics, and fears of a slowdown in the artificial intelligence sector.
Tech Sector’s Significant Fall
The Nasdaq index has seen a steep decline of 10% since hitting its peak on December 16, and is poised for its worst week since September. The downturn particularly reflects a notable drop in chipmaker stocks, with Marvell leading the charge downward.
Investor Concerns
Current anxieties center around the negative implications of tariffs on imported goods, which have recently taken effect at a rate of 25% on imports from both Canada and Mexico, coupled with an additional 10% tariff on Chinese goods. These measures are expected to not only raise production costs for businesses but also increase consumer prices, aggravating the fears of retaliatory tariffs thereby reducing export opportunities.
The tech industry’s enthusiasm, previously buoyed by support for Trump among top executives—who were actively involved in his inauguration—has quickly dissipated. Figures from leading firms like Apple, Meta, Amazon, and Alphabet contributed to the tech industry’s growth over the past two years, making the current decline even more pronounced.
Performance of Major Companies
Among the largest tech stocks, Tesla has been hit hardest, plunging 35% this year and suffering a nearly 6% drop on Thursday alone. This is particularly striking in light of CEO Elon Musk’s influential role in Trump’s administration. Meanwhile, Nvidia, critical for AI operations, has experienced an 18% drop in stock value since the year’s start, with significant recent losses compounding concerns regarding tariffs and their business implications.
The semiconductor landscape reflects a similar trajectory, with Broadcom’s stock down 22% in 2023 despite having previously soared due to heightened demand for AI technology. Marvell Technology, which fell sharply by 20% in one day, suggestively points to the broader market struggles for chipmakers in light of current economic policies.
Employment Woes
Additionally, troubling employment figures reported by ADP have further stoked fears of an economic slowdown. The report indicated that only 77,000 private sector jobs were created in February, substantially below the expected figures. Without a significant rally on Friday, the Nasdaq could see its third consecutive week in the red and its fifth losing week out of six.
With ongoing tariff uncertainties paired with potential job market impacts, investors are pivoting away from riskier assets, highlighting an urgent need for stability amid fluctuating economic conditions.
