Wall Street Extends Losses Amid Looming Tariff Uncertainties and Growing Stagflation Risk

Barry Adams
04 Mar, 2025
New York City

Benchmark indexes on Wall Street extended losses for the second consecutive day after looming tariff threats dampened market enthusiasm and sparked a worldwide sell-off. 

The S&P 500 index decreased 0.4%, and the Nasdaq Composite declined 0.8%, and the Trump administration confirmed its plans to impose tariffs on select goods shipped from China, Mexico, and Canada.

Investors are struggling to understand the rationale for tariffs, and market participants are increasingly factoring a rebound in inflation, which would postpone the Fed's rate cuts and push the U.S. economy into stagflation. 

Presidential candidate Donald Trump promised to lower prices, kill inflation, and end the Russia-Ukraine war in the first week of his administration.

However, weak Cabinet appointments and lack of economic priorities have only made life difficult for U.S. consumers and businesses. 

Moreover, investors are worried that slowing U.S. economic growth and rising inflation would make it harder for corporations to deliver earnings growth in the quarters ahead. 

In addition, rising traded tensions between China and the U.S. could negatively impact sales of fabless chip companies, semiconductor equipment makers, and chip foundries, which could halt the two-year tech rally.

 

U.S. Movers

Nvidia Corp. decreased 3% to $110.29, and the artificial intelligence chip and systems maker extended two-day losses to more than 12% and traded at the level last seen in September. 

Investors worried that rising trade tensions between the U.S. and China could force the company's sales lower. 

Target Corp. decreased 3.3% to $116.95 after the large-format store chain operator reported better-than-expected fourth-quarter results. 

However, the company warned that earnings in the fiscal first quarter are likely to face "meaningful pressure" compared to the rest of the year.

Best Buy declined 4.5% to $82.60 after the electronics products retailer reported a decline in sales and earnings in the holiday-driven fiscal fourth quarter. 

The company added that prices are likely to rise because of the surge in tariffs on goods from Asia and Mexico. 

Tesla dropped 5% to $270.35 after the electronic vehicle maker's unit China-made sales plunged 50% to a two-year low of 30,688 in February. 

In the two-month period to February, which includes the Lunar New Year Calendar shift, Tesla China sold 93,926 vehicles to customers in China and Asia, a decrease of 28.7% from 131,812 in the same period last year.

Illumina Inc. decreased 2.4% to $82.17, and PVH Corp fell 3.2% to $69.0 after China added the two companies to the list of companies to avoid doing business with and announced additional restrictions.