Stocks Close Lower on March 4, 2025, as Tariffs and Economic Worries Drag Markets Down; Banks Suffer Broad-Based Decline
By Stephen Wisnefski
Updated March 4, 2025, 6:37 PM EST
Stocks ended sharply lower on Tuesday, March 4, 2025, as new U.S. tariffs and ongoing economic uncertainty weighed heavily on investor sentiment. The Dow Jones Industrial Average dropped 1.6%, the S&P 500 fell 1.2%, and the Nasdaq Composite declined 0.4%. This marked the second consecutive day of broad-based losses for U.S. equities amid heightened concerns over the economy’s health and questions surrounding the impact of recent Trump administration trade policies.
Tariff Impact Weighs on Market
Late Monday night, the U.S. government implemented long-anticipated tariffs: 25% duties on imports from Canada and Mexico, and an increased 20% tariff on goods from China—doubling the prior levy. These moves triggered swift retaliatory tariffs from Beijing and Ottawa, with Mexico promising to announce its own countermeasures by Sunday. While the White House argues these tariffs will encourage domestic investment and create manufacturing jobs, investors fear the measures will drive inflation, slow economic growth, and disrupt multinational business operations.
The new tariffs have cast a shadow of uncertainty on corporate earnings and consumer prices. Major retailers and manufacturers voiced concerns on Tuesday:
- Target (TGT) shares dropped 3% despite reporting better-than-expected earnings, as the company warned that uncertainty around tariffs and consumer behavior would pressure results in the current quarter.
- Best Buy (BBY) plunged over 13% after delivering solid quarterly results but signaling that tariff-related cost increases will likely weigh on sales.
- Automakers, seen as particularly vulnerable to trade restrictions, suffered notable losses. Stellantis (STLA) and General Motors (GM) each declined more than 4%, while Ford (F) fell nearly 3%.
Financial Sector Leads Decline
The financial sector was the hardest hit in the S&P 500, sliding 3.5% as worries about the economic outlook intensified. Major banks such as Bank of America (BAC) and Citigroup (C) both dropped more than 6%. Shares of Wells Fargo (WFC), JPMorgan Chase (JPM), Goldman Sachs (GS), and American Express (AXP) also declined significantly amid broader market unease.
Technology Stocks Show Mixed Results
Tech giants delivered a mixed performance amid trade and economic uncertainty. Tesla (TSLA) dropped over 4%, continuing a year-to-date decline of about one-third. Apple (AAPL), Amazon (AMZN), and Meta Platforms (META) also closed lower. However, Nvidia (NVDA), the AI-focused chipmaker, bounced back with a nearly 2% gain after falling sharply the previous day. Microsoft (MSFT), Alphabet (GOOG), and Broadcom (AVGO) also posted modest advances.
Notably, AI sector stocks showed signs of resilience despite the tariff pressures. Alongside Nvidia, server producer Super Micro Computer (SMCI) rebounded 8.5% following heavy losses earlier in the week. Other AI-related stocks such as Palantir (PLTR) and Vistra (VST) participated in the recovery.
Notable Movers and Corporate News
- Super Micro Computer (SMCI) surged over 8% after a 13% drop in the previous session, regaining ground after investors digested tariff concerns affecting AI hardware supply chains.
- Walgreens Boots Alliance (WBA) jumped nearly 6% amid reports that private equity firm Sycamore Partners was nearing a $10 billion buyout deal, with plans to retain the core U.S. pharmacy business.
- Strategy (MSTR), formerly MicroStrategy and a major bitcoin holder, soared nearly 10%, boosted by renewed cryptocurrency interest.
Cryptocurrency and Bond Yields
Bitcoin fluctuated intraday, trading at around $87,300 late Tuesday, up from $81,500 earlier but below the recent peak near $95,000 achieved yesterday after President Trump’s announcement of a planned cryptocurrency strategic reserve.
In the fixed income markets, the yield on the 10-year U.S. Treasury note rose to 4.24% in late trading, up from 4.18% on Monday. It had dipped earlier in the day to 4.11%, its lowest since October, reflecting volatility tied to economic growth concerns. Treasury yields influence borrowing costs broadly, including home mortgages.
Commodities Update
Gold futures climbed 0.9% to $2,930 an ounce, benefiting from flight-to-safety demand. Meanwhile, crude oil prices fell 0.5% to $68.05 per barrel as investors weighed the economic implications of the tariff-related trade tensions.
Looking Ahead
Market participants are closely watching how the tariffs will affect inflation, corporate earnings, consumer spending, and global trade dynamics in the weeks ahead. With the S&P 500 and Nasdaq having erased all post-election gains, investors remain cautious amid a murky economic outlook and unpredictable trade environment.
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