In recent trading sessions, financial markets have experienced significant turbulence, marked by the Dow Jones Industrial Average plunging 400 points and the Nasdaq entering correction territory.
These developments have been spurred by escalating concerns regarding trade policy fatigue, which is increasingly influencing investor sentiment. As uncertainty looms over the future of international trade agreements and their implications for economic growth, market participants are grappling with the potential consequences for both domestic and global economies.
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Stock Market Plunges: Nasdaq Enters Correction Amid Trade Policy Concerns
Stocks continued their steep decline on Thursday as the recent compromises from the White House regarding President Donald Trump’s contentious tariff policies failed to ease the jitters among investors.
The Dow Jones Industrial Average plunged by 516 points, or 1.2%, after dipping over 600 points earlier in the session. The S&P 500 fell by 2%, and the Nasdaq Composite declined by 2.9%.
These Thursday losses followed the implementation of U.S. tariffs on imports from Canada, Mexico, and China, which have sent ripples through the financial markets. Both Canada and China enacted retaliatory tariffs, while Mexico indicated it would announce its own measures by the weekend. The Nasdaq has dropped over 4% for the week, while both the Dow and S&P 500 have tumbled around 3.1% and 3.8%, respectively.
After the White House hinted at a one-month delay for tariffs on automakers aligning with the United States-Mexico-Canada Agreement (USMCA), Wednesday saw a brief rally. Investors hoped for further concessions that could lessen the anticipated impact on the U.S. economy.
On Thursday, Trump revealed that additional Canadian and Mexican goods under the USMCA would get a one-month extension on tariffs. However, this news failed to inspire the same optimism seen on Wednesday, as uncertainty loomed large.
Investor anxiety deepened on Thursday afternoon when Treasury Secretary Scott Bessent voiced support for the tariffs, leaving the market to ponder how much compromise could be expected on this contentious issue in the future. Many appeared weary of the administration’s shifting tariff position and mixed messaging.
“To the extent that another country’s practices harm our own economy and people, the United States will respond,” Bessent stated at an Economic Club of New York event, further emphasizing the administration’s “America-first” trade stance.
Bessent referred to Canadian Prime Minister Justin Trudeau as a “numbskull,” underscoring the administration’s focus on Main Street over Wall Street. The S&P 500 hit its lowest point since early November during this trading session.
“You’re witnessing a wave of confusion,” remarked Keith Lerner, chief market strategist at Truist. “This confusion is influencing daily market fluctuations.”
Adding to the downward pressure, a continued retracement in the once-booming artificial intelligence trade contributed to the market’s struggles on Thursday.
Chipmaker Marvell Technology saw a staggering drop of more than 17% after providing mixed guidance for its first quarter. Fellow semiconductor companies, including ON Semiconductor, Taiwan Semiconductor, and Nvidia, also faced declines.
Compounding these woes, a series of alarming economic reports raised red flags about the detrimental effects of Trump’s policies on the U.S. economy, all leading up to Friday’s eagerly awaited jobs report.
The Federal Reserve’s Beige Book and the Institute for Supply Management’s manufacturing data highlighted concerns about rising input costs due to tariffs. Additionally, data from Challenger, Gray & Christmas revealed layoff announcements surged to their highest since 2020, attributed to Trump and Elon Musk’s push to reduce the federal workforce.
Grains Soar as Mexico Gains Tariff Exemption: Impact Analysis
U.S. corn futures climbed approximately 2% on Thursday as easing trade tensions emerged—particularly after President Trump indicated that Mexico would not face tariffs on goods under a North American trade framework until April 2.
Soybeans and wheat also followed the positive sentiment, buoyed by a weaker dollar that made U.S. agricultural products more competitive in global markets.
This week, Trump had placed 25% tariffs on imports from Mexico and Canada along with new duties on Chinese goods, heightening concerns about inflation and overall growth.
As the largest importer of American corn and wheat in 2024, Mexico’s tariff threats triggered fears of trade disruptions, causing grain futures to drop significantly in earlier sessions, but Thursday’s exemption alleviated some of these worries.
“The demand is back on track with our biggest trading partner for corn and pork,” commented Don Roose, president of Iowa-based U.S. Commodities.
At 1:05 p.m. CST (1905 GMT), Chicago Board of Trade May corn (CK25) rose by 9 cents to settle at $4.64-3/4 per bushel, while May soybeans (SK25) gained 17 cents to reach $10.28-3/4 per bushel. CBOT May wheat (WK25) also increased by 6-1/2 cents, hitting $5.54-3/4 a bushel.
Trump took to social media platform Truth Social to announce that Mexico would not incur tariffs on goods falling under the United States-Mexico-Canada Agreement until April, though he omitted any mention of a similar arrangement for Canada, despite his commerce secretary hinting that it was on the table.
Investors remain wary of a potential trade war that could escalate, reminiscent of the previous U.S.-China tariff conflict.
Meanwhile, China’s new tariffs on U.S. agricultural products threaten to alter global trade patterns, prompting the world’s leading agricultural importer to seek more meat, dairy, and grains from South America, Europe, and the Pacific, according to analysts.
Amazon Cloud Launches Service to Revolutionize Game Streaming Industry
On Thursday, Amazon’s cloud division announced the launch of a service designed to enable video game publishers to stream their games online.
Named GameLift Streams, this new service will allow games to be played on any device with a browser supporting the WebRTC standard, which includes smart TVs, smartphones, tablets, and PCs. This service can serve as a rapid distribution channel for games in development to testers, with features to securely revoke access later.
“Lots of AAA games leverage our service in this capacity,” said Chris Lee, general manager and head of immersive technologies at Amazon Web Services (AWS), in a recent interview with CNBC. Major gaming companies like Electronic Arts and Take-Two Interactive are known for their significant investments in high-quality games.
AWS generates a significant portion of its revenue from core services like leasing server and storage space from data centers worldwide. Additionally, it provides hundreds of other services that cater to software developers. For the last decade, AWS has been a primary profit driver for Amazon.
Jackbox Games, known for casual titles like “Quiplash” and “Fibbage,” plans to utilize GameLift Streams to launch a game-streaming platform that will offer access to multiple titles. Currently, Jackbox’s games are available only for a one-time fee.
Evan Jacover, the technology chief at Jackbox, expressed that their company considered developing its own streaming technology but ultimately chose AWS after learning about its offerings.
“We had a proof of concept, but it wasn’t efficient to get it functioning at scale,” Jacover explained.
Jackbox aims to introduce an early ad-supported version of its service in the first half of the year, with plans to expand its game library and add a subscription model later. The nature of Jackbox’s games means they aren’t graphically intensive, minimizing latency concerns and allowing for effective streaming.
Amazon GameLift Streams supports playback at 1080p resolution and 60 frames per second.
“That’s the sweet spot when we engage with customers,” Lee remarked.
In contrast, Microsoft’s Xbox Series X and Sony’s PlayStation 5 Pro offer up to 4K resolution and 120 frames per second capabilities, suitable for more advanced gaming experiences. However, current-generation consoles come with a hefty price tag.
Cost for GameLift Streams is determined by the choice of Nvidia graphics processing units and the amount of storage used for game data. Games can be executed on either Windows or Linux, with seamless integration requiring no modifications, according to the blog post.
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Marvell Stock Dives 20% after Missing High Expectations
Marvell Technology shares tumbled 19.8% after the chipmaker’s guidance fell short of elevated expectations from some investors.
For the first fiscal quarter, the company projected sales of approximately $1.88 billion, just surpassing the $1.87 billion anticipated by analysts surveyed by LSEG. However, the outlook disappointed some investors who were anticipating revenue near $2 billion, particularly after the stock skyrocketed by 83% in 2024.
The results led to concerns about Marvell’s collaboration with Amazon Web Services on its Trainium AI chip and possible limitations for its custom application-specific integrated circuits business.
“Solid figures missed the high watermark set by other players in the AMZN supply chain,” commented Barclays analyst Tom O’Malley in a note following the announcement. “While the company remains optimistic about its ASIC prospects, the near-term Amazon figures are a concern; the market is punishing anything that isn’t flawless in AI.”
Marvell specializes in creating tailored chips and hardware utilized in data centers, networking, and infrastructure, experiencing growth from the surge in artificial intelligence that has propelled the sector. Yet, chipmakers are now facing heightened expectations for their financial performance.
For the fourth quarter, Marvell reported adjusted earnings per share of 60 cents and revenue of $1.82 billion, which slightly exceeded the earnings estimate of 59 cents and the revenue forecast of $1.80 billion from LSEG.
Their data center revenue reached $1.37 billion, just above the $1.36 billion average estimate.
Marvell’s poor performance weighed heavily on other semiconductor stocks as well, with the VanEck Semiconductor ETF falling 4%. AI chip giants Nvidia and Broadcom both suffered losses of over 5%, while Taiwan Semiconductor decreased by nearly 4%.
