Stocks dropped on Thursday afternoon as President Donald Trump’s announcement of temporary exemptions from 25% tariffs on many imports failed to prevent a broader market decline. The S&P 500 fell by 1.8%, while the Nasdaq dropped 2.6%, now down more than 10% from its recent all-time high.
The Dow Jones Industrial Average experienced a loss of over 400 points, or about 1%. This marked a continuation of a tough week for the major stock indices, with each losing about 3%. The S&P 500 has now erased all gains made since Trump’s election in November, and it is currently down 6% from its peak in January, the month he took office.
Trump’s Comments Fuel Market Decline
President Trump blamed “globalist countries and companies” for the market sell-off and dismissed concerns about the stock market’s performance. In a statement, he remarked, “I think it’s globalists that see how rich our country’s going to be and they don’t like it. Big market out there. But again, they’ve been ripping off this country for years.” He further stated, “We can’t let this continue to happen to America. Otherwise, we’re not going to have a country any longer.”
Trump’s comments came after a brief rally on Wednesday, following news that American carmakers would be exempt from the 25% tariffs imposed on goods imported from Mexico and Canada.
Market Reaction to Tariff Policy
Earlier Thursday, Trump announced that all Mexican goods covered by the United States-Mexico-Canada Agreement (USMCA), the replacement for NAFTA, would not be subject to tariffs for one month. He later clarified that the one-month exemption would also apply to Canadian goods covered by the USMCA. However, this announcement did little to calm the markets, which were already under pressure from concerns in the tech sector.
AI Sector Concerns and Job Market Weakness
Markets were also rattled by concerns about a slowdown in the development of artificial intelligence (AI). Marvell Technology, a California-based chipmaker, released earnings that suggested a potential slowdown in the AI race among major tech companies. This news, coupled with growing concerns about a weakening economy, contributed to the market decline.
On Thursday, the Challenger, Gray & Christmas consultancy reported that February saw the largest number of job cuts announced in a single month since the early days of the pandemic. The report indicated that massive layoffs, particularly related to Elon Musk’s DOGE project, were starting to take effect. This followed data from private payroll processor ADP, which revealed that fewer jobs were added in January than expected.
Mixed Employment Data
Despite the job cuts, the Challenger report also showed that hiring remained steady in various industries. On Friday, the Bureau of Labor Statistics is set to release the official job numbers for February, with analysts expecting the addition of around 170,000 payrolls—higher than the 143,000 job gains recorded in January.
President Trump continued to downplay the market decline, claiming that he was not focused on stock market movements while again blaming “globalists” for the sell-off.
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