On Thursday, U.S. equities indexes experienced a substantial decline as investors remained apprehensive about ongoing U.S. trade policy. The uncertainty surrounding the tariff decisions from the Trump administration continued to loom over the stock markets, even with the recent announcement that tariffs on certain goods imported from Mexico would be postponed until April. This news, however, failed to alleviate investor concerns as the market headed towards the final trading day of the week.
As the trading week comes to a close, attention is expected to shift towards the labor market. The Bureau of Labor Statistics is scheduled to release its February jobs report on Friday morning, and recent indicators have suggested a potential slowdown in hiring. This raises significant concerns about the overall strength of the U.S. economy, contributing to the market's volatility.
The S&P 500 index dropped by 1.8% on Thursday, while the Dow Jones Industrial Average fell by 1%. The technology sector, in particular, faced notable pressure, leading the Nasdaq to plummet by 2.6%. This decline was largely attributed to disappointing forecasts from companies in the artificial intelligence sector, notably semiconductor manufacturer Marvell Technology (MRVL), which issued a less-than-optimistic outlook for its fiscal first quarter.
Despite Marvell's sales and profit forecasts aligning closely with consensus expectations, analysts from Bank of America had anticipated a more robust outlook driven by AI-related growth. As a result, Marvell's shares experienced a staggering drop of nearly 20%, which in turn negatively impacted numerous stocks within the AI space.
Palantir Technologies (PLTR), a data analytics software provider that previously thrived on the hype surrounding AI, saw its stock fall by 10.7%, making it the worst performer in the S&P 500 index. This decline was exacerbated by a regulatory filing indicating that CEO Alex Karp plans to sell a significant portion of his shares in the company. Similarly, shares of Texas-based electricity generator Vistra (VST) declined by 9.8%, while fellow nuclear-focused utility Constellation Energy (CEG) suffered a drop of 9.4%.
In the entertainment sector, Netflix (NFLX) shares fell by 8.5% after research firm MoffettNathanson forecasted a slowdown in subscriber growth for the streaming service. Analysts suggested that the surge in subscriber additions in recent quarters was largely due to Netflix's crackdown on password sharing, indicating that the company may struggle to maintain its current growth trajectory.
Despite the overall market downturn, some companies thrived. MarketAxess Holdings (MKTX), which operates a digital trading platform for fixed-income securities, reported impressive year-over-year and month-over-month increases in average daily volume. This growth highlighted strength in emerging markets and Eurobonds, even amid weakness in U.S. credit markets. As a result, MarketAxess shares surged by 5.3%, marking the best performance in the S&P 500 for the day.
Additionally, shares of agribusiness firm Archer-Daniels-Midland (ADM) rose by 4.9%, recovering from previous losses caused by concerns over the impact of tariffs on the agricultural sector. Positive reports indicating that the Trump administration might consider a carveout for agricultural products contributed to this rebound. Notably, the recently announced tariff reprieve included an exemption for Canadian potash imports, a crucial ingredient for fertilizers.
As the market grapples with uncertainties surrounding U.S. trade policy and economic indicators, investors remain on alert. The upcoming jobs report and developments in key sectors such as AI and agriculture will be critical to watch as they will likely influence market dynamics in the days ahead.
