Nasdaq Enters Correction Territory Amid Trade Concerns and Tariff Delays

By Colin Laidley
Updated March 06, 2025, 5:44 PM EST

Overview of Market Trends

On March 6, 2025, U.S. stock markets faced significant declines, with the tech-heavy Nasdaq Composite falling 2.6%, marking its entry into correction territory. The broader S&P 500 index dropped 1.8%, while the Dow Jones Industrial Average fell 1%. The market turmoil was primarily attributed to ongoing uncertainty surrounding President Trump’s fluctuating trade policies, particularly in light of recently announced tariff delays.

Tariff Announcements and Market Reaction

The volatility in the markets followed President Trump’s announcement of a one-month delay on tariffs imposed on automobile imports from Canada and Mexico. This decision was intended to ease some immediate pressures on stock prices, leading to a brief rally the previous day. However, the administration’s continued reversals regarding tariffs on these goods, set to be fully implemented by April 2, raised concerns about potential inflationary impacts and adverse effects on economic growth across North America.

Despite the delays, Wall Street is still reacting adversely to the prospect of tariffs and their corresponding counter-tariffs, leading to heightened investor anxiety and volatility.

Key Stock Market Movements

The day’s trading saw significant losses across major technology stocks.

• Broadcom (AVGO) saw its shares tumble by over 6% during the day but rebounded strongly after reporting better-than-expected quarterly earnings, ultimately gaining traction in after-hours trading.
• Tesla (TSLA) and Nvidia (NVDA) both faced declines of more than 5%, while Meta Platforms (META) and Amazon (AMZN) lost 4% and 3%, respectively.
• Tech giants such as Microsoft (MSFT), Apple (AAPL), and Alphabet (GOOGL) managed to resist a greater downturn, with losses of less than 1%.

A particularly notable downturn occurred in the semiconductor industry, as Marvell Technology (MRVL) plummeted nearly 20% following a weak earnings forecast. Meanwhile, MongoDB (MDB) shares sank by over 26% due to an unanticipated disappointing outlook.

Labor Market Pressures

A report from outplacement firm Challenger, Gray & Christmas revealed that layoffs surged to their highest level since July 2020, largely attributed to significant government cuts influenced by Elon Musk’s cost-reduction strategies. While these layoffs might not yet be reflected in the upcoming February jobs report, investors are keenly watching labor market trends for any signs of weakness.

Economic Indicators

The 10-year Treasury yield increased slightly from 4.28% to 4.3%, reflecting heightened inflation expectations among investors and potential implications for Federal Reserve policy. In the cryptocurrency sector, Bitcoin prices fell to $89,200, while West Texas Intermediate oil futures stabilized at $66.30 per barrel. Concurrently, gold futures dipped to approximately $2,920 an ounce.

Notable Stock Performance

Decliners

Several high-profile stocks experienced notable declines:

• Palantir Technologies (PLTR) dropped 10.7%, continuing a recent sell-off prompted by CEO Alex Karp’s announcement of plans to divest a significant portion of his shares.
• Vistra (VST) saw a decrease of 9.8%, while Constellation Energy (CEG) fell by 9.4%, both impacted by the broader pessimism surrounding the market.
• Netflix (NFLX) shares declined by 8.5% in response to a forecast predicting slower subscriber growth.

Gainers

Conversely, not all stocks suffered:

• Shares of MarketAxess Holdings (MKTX) surged by 5.3%, buoyed by strong trading volume growth in emerging markets and Eurobonds.
• Archer-Daniels-Midland (ADM) gained 4.9% after reports surfaced about a possible exemption for agricultural products from upcoming tariffs.
• Fastenal (FAST) reported a 4.5% increase following positive sales growth indicators for February.

Broadcom’s Post-Earnings Rally

Following the release of a robust fiscal first-quarter earnings report, Broadcom (AVGO) shares surged 9% in after-hours trading. The chipmaker posted a significant year-over-year revenue increase of 25%, driven by a 77% surge in AI-related revenues, and anticipated continued strength in the sector.

Conclusion

The current market landscape is characterized by heightened volatility, primarily influenced by shifting trade policy and tariff concerns. As investors grapple with these uncertainties, the next economic indicators and corporate earnings reports will play crucial roles in shaping market expectations moving forward.

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