Market Decline as Tariff Concerns Grow
The stock market reversed its three-day winning streak on Wednesday as reports emerged that former President Donald Trump is set to impose new tariffs on the auto industry. Investors reacted to the potential economic impact, leading to a market pullback. The fear of stricter export controls also weighed on major indexes.
Leading the decline was Nvidia, along with Tesla, as concerns over semiconductor export restrictions to China increased.
Dow Jones, Nasdaq, and S&P 500 Performance
- The Dow Jones Industrial Average dropped 0.3%, showing resilience compared to other indexes.
- The S&P 500 declined 1.1%, slipping below its 200-day moving average.
- The Nasdaq Composite suffered the largest decline, plunging 2% (over 370 points) as tech stocks sold off.
Market breadth deteriorated, with declining stocks outpacing advancers by a 7-to-3 margin on the Nasdaq and 9-to-5 on the NYSE.
Sector Performance: Nvidia Drags Tech Stocks
Among the S&P 500 sectors, consumer staples, utilities, and energy showed strength, while technology and consumer discretionary stocks faced losses.
Nvidia’s stock fell, reversing recent gains, as new concerns emerged regarding restrictions on chip exports to China. The stock, which had reclaimed its 21-day moving average, dropped below the key level once again.
Other tech giants also struggled, with declines in:
- Tesla (-6%), breaking its five-day rally ahead of Q1 delivery data on April 2.
- Apple, Microsoft, and Meta, all facing downward pressure.
Auto Stocks Drop as Trump Tariff Announcement Looms
President Trump is expected to announce new tariffs on the automobile sector at 4 p.m. ET Wednesday, according to White House Press Secretary Karoline Leavitt.
As a result, major automakers saw losses:
- General Motors (GM) and Stellantis fell more than 3%.
- Mercedes-Benz Group sank over 4%, while Ferrari declined nearly 5%.
- Toyota and Honda slipped close to 2%.
Meanwhile, Ford managed a slight gain despite the broader downturn in the sector.
Dollar Tree Gains on Business Sale, But Momentum Fades
Shares of Dollar Tree surged 9% after announcing the sale of its Family Dollar business for $1 billion to Brigade Capital Management and Macellum Capital Management. However, the stock trimmed its gains to just 3% by market close.
Despite the surge, Dollar Tree’s stock chart remains bearish, struggling below its 50-day moving average.
Oil Stocks Near Buy Zones
Energy stocks showed resilience, with oil and gas companies nearing key buy points:
- Range Resources retreated slightly but remained near a buy point of $40.49.
- LandBridge, a top-performing IBD Leaderboard stock, held within a buy zone from a $76.22 entry point.
Chip Export Restrictions Impact Markets
Reports surfaced that the Trump administration has added several Chinese companies to an export blacklist due to national security risks.
As a result, U.S. chipmakers, including Nvidia, are now required to obtain government approval before selling certain chips to these companies.
Insurance Stocks Near Buy Points
Amid the broader market decline, insurance stocks continued their steady performance, with Warren Buffett-backed Chubb approaching a buy point of $302.05.
Other stocks showing strength in the sector included:
- Travelers, working toward a $269.56 buy point.
- AON, currently trading within a buy zone from a $395.33 entry level.
Upcoming Economic Data Releases
Investors are now looking ahead to key economic reports due later this week:
- Thursday: The U.S. Bureau of Economic Analysis will release Q4 productivity data, with GDP expected to edge up to 2.4% year-over-year.
- Friday: The Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge, will be released.
- Core inflation is expected to rise to 2.7% annually, up from 2.6%.
Dow Jones Gainers: McDonald’s and Chevron Rise
Despite market losses, a few Dow stocks managed to gain:
- McDonald’s and Chevron posted modest increases.
- Procter & Gamble also saw slight gains.
GameStop Surges on Earnings, Plans to Add Bitcoin to Reserves
Shares of GameStop rallied after the company reported Q4 earnings per share of $0.30, up 36% year-over-year, despite a 28% drop in revenue to $1.3 billion.
The gaming retailer also announced a strategic move to add Bitcoin to its Treasury reserves, fueling investor optimism.
Conclusion
The stock market faced sharp losses on Wednesday as tariff concerns and export restrictions weighed on investor sentiment. Nvidia and Tesla led the decline, while automakers and tech stocks struggled.
However, certain sectors—oil, insurance, and consumer staples—showed resilience. With key economic data on the horizon, investors remain focused on inflation trends and GDP growth for further market direction.
