Slow Recovery for Nasdaq after Tariffs Sank Stocks
Stocks are slightly up on Tuesday compared to Monday's steep decline caused by tariff changes and AI disruption fears.
Quick overview
- The stock market is showing signs of recovery after a bearish decline due to new tariffs imposed by President Trump.
- The Dow and S&P 500 gained 0.2% and 0.1% respectively, while technology stocks faced significant losses amid fears of AI disruptions.
- Advanced Micro Devices saw an 11% increase after announcing a partnership with Meta Platforms, contrasting with the overall tech sector decline.
- Investors remain cautious as the volatility from tariff changes continues to create uncertainty in the market.
After a bearish, the stock market is ticking back upward with the Nasdaq recovering 0.04% from Monday’s 0.06% loss caused by tariff concerns.
The round of new tariffs imposed by President Donald Trump impacted the stock market in a big way this week, causing all three indices to fall, but they started to make some gains Tuesday.
The Dow climbed 0.2% while the S&P 500 gained 0.1%. Continued fears over AI disruptions caused technology stocks to tumble this week, with Google (GOOGL) down 1.47% and Nvidia (NVDA) losing 2.07%.
Trump Tariffs Create Markets Uncertainty
A new round of global tariffs from President Trump has the stock market in turmoil. Shares dropped precipitously on Monday and continued to decline Tuesday. On the Nasdaq Composite index, pharmaceutical and technology stocks plummeted at incredible rates. Many of these steep declines can be attributed to fear over the changing cost of exports with global tariffs extending 10-15%.
Not all tech stocks stumbled on Tuesday, though, as Advanced Micro Devices (AMD) soared 11% thanks to their announcement that the company would be partnering with Meta Platforms for several years. AMD will supply Meta with processing units to handle AI functions for data centers.
AI disruption fears persists, however, and analysts are concerned that tech companies may be overextending themselves with AI investment and the job market may change dramatically as AI becomes more pervasive and developed. The tariff hikes could affect tech profits directly, spiking import costs and keeping companies from expanding as quickly as they would like.
Major losses for the Dow on Monday have been partially reversed, after the index dropped 1.6% yesterday and lost 800 points. All three major indices are slightly better today than they were yesterday but are still under bearish pressure as investors are hesitant to make bold moves in the volatile economic environment. The state of tariffs is still incredibly unstable, and Trump has pledged to raise tariffs with multiple trade partners, which could set off a catastrophic economic reaction.
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