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US stocks fell sharply on Thursday as a renewed sell-off in the tech sector rattled a market already weighed down by concerns about the impact of President Donald Trump’s tariffs on the world’s biggest economy.
The blue-chip S&P 500 was down 1.7 per cent by early afternoon, leaving it on course for its worst week since early September. The tech-heavy Nasdaq Composite lost 2.4 per cent, with chipmaker Marvell Technology plunging as much as 20 per cent after its first-quarter results disappointed.
Nvidia, which was down 4.9 per cent, led the tech rout, while other chipmakers such as Broadcom slumped 5.7 per cent ahead of its earnings report due after close.
Wall Street stocks have weakened over the past two weeks as Trump’s tariffs on China, Mexico and Canada sparked fears over the hit to growth — reversing a multiyear period of US dominance in global equities.
“Investors are starting to think the US administration is losing control of the narrative,” said Luca Paolini, chief strategist at Pictet Asset Management.
JPMorgan analyst Dubravko Lakos-Bujas added that, “The US exceptionalism trade has been experiencing turbulence over the last two weeks as policy uncertainty rose sharply at a time of a budding growth scare and crowded investor positioning.”
Stocks briefly trimmed losses on Thursday after the US signalled the latest tariff reprieve to its trading partners before resuming their decline. Commerce secretary Howard Lutnick said all goods compliant with its 2020 trade deal with Canada and Mexico would probably be exempt from the levies for a month.
Thursday’s decline is the latest swing on Wall Street this week as investors weigh the fallout from Trump’s tariffs on America’s three largest trading partners, a last-minute exemption for carmakers and the threat of more sweeping tariffs next month.
“We are in a ping-pong market,” said Mike Zigmont, co-head of trading at Visdom Investment Group. “At the moment, the market [takes] the latest White House soundbite as fact, but it is ready to go the other way in a heartbeat.”
In a sign of the rising worries, demand for S&P 500 index put options — which would gain in price if Wall Street’s blue-chip index falls — expiring later on Thursday have skyrocketed, Bloomberg data shows.
Stocks have also been hit in recent weeks by worsening economic data, including manufacturers reporting a steep decline in orders in February.
Private sector jobs data on Wednesday showed that only 77,000 jobs were created in February, compared with economists’ estimate of 140,000. Closely watched non-farm payrolls figures on Friday will offer the latest indication of the health of the US labour market.
European stocks, however, continued a recent rally that has led them to outperform Wall Street this year. The Europe Stoxx 600 was flat, while Germany’s Dax, which has surged following a historic €500bn spending package from Berlin announced earlier in the week, gained 1.5 per cent.
The US dollar was down 0.1 per cent against a basket of rivals.
Additional reporting by Ian Smith
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