Nasdaq slides 2% as "magnificent seven" sink under tariff pressure
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The Nasdaq Composite index fell sharply by 2% on Wednesday as markets reacted negatively to renewed trade tensions. U.S. President Donald Trump's announcement of a 25% tariff on imported automobiles, effective April 3 with no exemptions—including for critical trade partners Canada and Mexico—triggered a sell-off across technology shares, intensifying uncertainty ahead of further trade announcements due next week.
Losses were broad-based, but the technology giants known as the "Magnificent Seven" bore the brunt. Nvidia (-5.8%) and Tesla (-5.5%) led declines, reflecting heightened sensitivity to global supply-chain disruptions and trade friction. Alphabet fell by 3.2%, while Meta and Amazon each shed over 2%. Microsoft (-1.3%) and Apple (-1%) also declined but showed relative resilience amid the broader tech slump.
Markets had been anticipating volatility ahead of Trump's broader tariff strategy, which is expected to be unveiled on April 2. However, the early move on autos—targeted explicitly at foreign manufacturers—renewed investor caution around potential global retaliation and disruption to consumer and supply chain dynamics. The U.S. Treasury expects these measures to raise approximately $100 billion annually, but market participants remain wary of potential adverse impacts on consumer spending, corporate profitability, and economic growth.
Despite the negativity in the Nasdaq, futures for the broader indices, the S&P 500 and the Dow Jones Industrial Average, held slight gains early Thursday. This modest optimism signals some investor hope that the full details next week could be less severe than feared or provide clarity sufficient to stabilize sentiment.
In the near term, uncertainty and volatility will likely persist, making careful risk management crucial. Traders should closely monitor further announcements on tariffs and potential international responses, as these will heavily influence short-term positioning, especially within the vulnerable tech sector.
Losses were broad-based, but the technology giants known as the "Magnificent Seven" bore the brunt. Nvidia (-5.8%) and Tesla (-5.5%) led declines, reflecting heightened sensitivity to global supply-chain disruptions and trade friction. Alphabet fell by 3.2%, while Meta and Amazon each shed over 2%. Microsoft (-1.3%) and Apple (-1%) also declined but showed relative resilience amid the broader tech slump.
Markets had been anticipating volatility ahead of Trump's broader tariff strategy, which is expected to be unveiled on April 2. However, the early move on autos—targeted explicitly at foreign manufacturers—renewed investor caution around potential global retaliation and disruption to consumer and supply chain dynamics. The U.S. Treasury expects these measures to raise approximately $100 billion annually, but market participants remain wary of potential adverse impacts on consumer spending, corporate profitability, and economic growth.
Despite the negativity in the Nasdaq, futures for the broader indices, the S&P 500 and the Dow Jones Industrial Average, held slight gains early Thursday. This modest optimism signals some investor hope that the full details next week could be less severe than feared or provide clarity sufficient to stabilize sentiment.
In the near term, uncertainty and volatility will likely persist, making careful risk management crucial. Traders should closely monitor further announcements on tariffs and potential international responses, as these will heavily influence short-term positioning, especially within the vulnerable tech sector.