The benchmark S&P 500 stock index ended Tuesday at its lowest level since Nov. 4 — wiping out its gains seen since President Donald Trump’s Nov. 5 election victory on rising fears that the administration’s wide-ranging tariff salvo will slam economic growth.
The tech-heavy Nasdaq Composite index flirted with correction territory — defined as a drop of 10% from a recent high — on Tuesday, before attempting a rebound into positive territory. The Nasdaq ended the day with a decline of 0.4% at 18,285.16, its lowest finish since Nov. 4, after hitting a session low of 17,956.60.
Market Snapshot
The Dow Jones Industrial Average fell 670.25 points, or 1.55%, to 42,520.99, the S&P 500 lost 71.57 points, or 1.22%, to 5,778.15 and the Nasdaq Composite lost 65.03 points, or 0.35%, to 18,285.16.
Market Movers
Electric-vehicle maker Tesla was down 4.4%, following a 2.8% drop on Monday, as Trump's tariffs announcement sent Wall Street reeling. Tesla assembles all its vehicles for the domestic market in the U.S., but about 15% of the parts in a Model Y sold in the U.S. come from Mexico. Some parts come from Canada as well, though an exact amount is harder to pin down. Meanwhile, preliminary data from the China Passenger Car Association said Tesla's sales of electric vehicles made in China dropped 49.2% in February.
Nvidia shares closed up 1.7% on Tuesday at $115.99. The stock fell 8.7% on Monday, closing at its lowest level since Sept. 18. Shares of chip makers Advanced Micro Devices and TSMC also rallied, closing up 2.6% and 4%, respectively. The iShares Semiconductor exchange-traded fund was up 0.6%.
Sea Ltd topped Wall Street estimates for fourth-quarter revenue on Tuesday, helped by strong growth in its financial services segment and e-commerce platform Shopee. U.S-listed shares of Sea were up 7% on Tuesday.
General Motors was down 4.6%, Ford Motor fell 2.8%, and Jeep maker Stellantis declined 4.4% as the Trump administration enacted tariffs. Ford CEO Jim Farley has said the tariffs threaten to wipe out billions of dollars in auto-industry profits as the levies have the potential to raise prices for car buyers.
Shares of Nvidia rose 1.7% to $115.99 after the leading maker of artificial-intelligence chips dropped 8.7% on Monday to $114.06 -- the stock's lowest close since mid-September 2024 -- on tariff worries. Coming into Tuesday, Nvidia has closed lower for five of the past trading sessions. Its market cap has dropped below $3 trillion. Analysts at Mizuho wrote that Nvidia has slumped for a number of reasons, including continued concerns about potential restrictions on exports of its AI hardware amid reports that advanced chips have been reaching China despite U.S. sanctions.
United Airlines Holdings fell 6%, Delta Air Lines slumped 6.4%, and cruise companies such as Royal Caribbean Group, down 5.9%, and Carnival, down 5.8%, were tumbling on worries that tariffs would crimp travel demand. The U.S. Global Jets exchange-traded fund fell 3.4%.
Wells Fargo fell 4.8%, JPMorgan Chase declined 4%, and Morgan Stanley was off 5.7%. Investors appeared to be weighing not just the impact of tariffs but concerns about a broader economic slowdown, which could crimp demand for loans and other banking services and products.
Walgreens Boots Alliance rose 5.6% to $10.84 after The Wall Street Journal reported the drugstore chain was nearing a deal with private-equity firm Sycamore Partners to be acquired for around $10 billion. The Journal report, which cited people familiar with the matter, said a share price of $11.30 to $11.40 had been discussed, and the aim was to complete the deal as soon as Thursday. The agreement would take Walgreens private.
Target was down 3%. Strong holiday demand for discretionary items helped the retailer beat fourth-quarter earnings expectations, but Target said uncertainty over consumer demand and tariffs will weigh on the current quarter's performance.
Super Micro Computer rose 8.5% Tuesday, after the maker of AI servers dropped 13% on Monday. The stock has declined 29% over the last three trading sessions. Super Micro has suffered from a hangover after an initial celebration last week when it avoided delisting and met its compliance deadline for submitting financial filings.
Best Buy, the electronics retailer, reported fourth-quarter earnings and revenue that topped Wall Street forecasts. The stock, however, declined 13%. Best Buy said it expects fiscal 2026 revenue in the range of $41.4 billion to $42.2 billion. Analysts surveyed by FactSet were expecting $41.8 billion. The company also forecast adjusted earnings between $6.20 and $6.60 a share. Analysts were expecting closer to the high end of that range, at $6.58. Management also warned consumers would likely foot the bill for Trump's tariffs.
Okta jumped 24% after the provider of cloud-based software and identity-access solutions reported better-than-expected fourth-quarter earnings and revenue, and said it anticipates fiscal first-quarter revenue of $678 million to $680 million, higher than Wall Street predictions of $670 million. "We're optimistic about FY 26, but also it's pretty early in the year," Chief Executive Todd McKinnon told Barron's in an interview.
SoundHound AI fell 5.9% after the artificial-intelligence voice technology company said it was delaying its 10-K filing. SoundHound "requires additional time to prepare the financial statements and the accompanying notes" disclosed in the annual report, due to the complexity of accounting for two separate acquisitions that happened last year, the company said in a regulatory filing. The company expects to file no later than March 18.
Software firm GitLab swung to a profit as fourth-quarter adjusted earnings of 33 cents a share beat analysts' expectations for 23 cents. Revenue rose 29% to $211.4 million and topped estimates. For fiscal 2026, GitLab said it expects adjusted earnings per share of 68 cents to 72 cents, below Wall Street forecasts for 80 cents, and revenue of $936 million to $942 million, compared with analysts' expectations for $938.9 million. Shares rose 12%.
Market News
Trump May "Meet in the Middle" on Canada, Mexico Tariffs: Commerce
President Donald Trump could roll back a portion of the tariffs he imposed on imports from Canada and Mexico as soon as Wednesday, according to Commerce Secretary Howard Lutnick.
Lutnick told Fox Business on Tuesday afternoon that Canadian and Mexican officials had been on the phone with him all day and that Trump was listening. The president is “going to work something out with them,” Lutnick said. “It’s not going to be a pause, none of that pause stuff, but somewhere in the middle will likely be the outcome.”
China Sets GDP Target at About 5% Despite Trump Tariffs
China is keeping its economic growth target at “around 5%” for 2025 despite a looming trade war with the United States and other headwinds.
The target for GDP growth was announced Wednesday in a report being presented by Premier Li Qiang at the opening session of the National People’s Congress, the annual meeting of China’s legislature.
“A target of around 5% is well aligned with our mid- and long-term development goals and underscores our resolve to meet difficulties head-on and strive hard to deliver,” the government report said.
