Stocks once again failed to sustain an early upward move and came under pressure over the course of the trading day on Thursday. Unlike the previous session, however, the major averages extended the pullback as the day progressed, closing sharply lower.

The tech-heavy Nasdaq posted a particularly steep loss, plunging 530.84 points or 2.8 percent to a nearly four-month closing low of 18,544.41.

The S&P 500 (SPI:SP500) also slumped 94.49 points or 1.6 percent to a one-month closing low of 5,861.57, while the narrower Dow fell 193.62 points or 0.5 percent to a one-month closing low of 43,239.50.

Stocks initially benefited from a positive reaction to earnings news from Nvidia (NASDAQ:NVDA), which reported better than expected fourth quarter results and provided upbeat revenue guidance for the current quarter.

However, shares of Nvidia subsequently tumbled by 8.5 percent as the AI darling and market leader also warned about increased global competition.

The sell-off on Wall Street also came as President Donald Trump clarified that previously paused 25 percent tariffs on imports from Mexico and Canada will go into effect on March 4th.

Trump said an additional 10 percent tariff on imports from China will also be imposed on that date, claiming drugs are pouring into the U.S. from Mexico and Canada and that a large percentage of the drugs are supplied by China.

The president also said in a Truth Social post that the April 2nd date for reciprocal tariffs on other U.S. trade partners will “remain in full force and effect.”

Traders were also reacting to the latest batch of U.S. economic data, including a Labor Department report showing first-time claims for U.S. unemployment benefits climbed much more than expected in the week ended February 22nd.

A separate report released by the Commerce Department showed durable goods orders surged by much more than expected in January, although the growth was largely due to a spike in volatile orders for transportation equipment.

Sector News

Semiconductor stocks saw substantial weakness on the day, resulting in a 6.1 percent nosedive by the Philadelphia Semiconductor Index. The index plunged to its lowest closing level in over five months.

Considerable weakness was also visible among computer hardware stocks, with the NYSE Arca Computer Hardware Index plummeting by 5.1 percent

Gold stocks also moved sharply lower along with the price of the precious metal, dragging the NYSE Arca Gold Bugs Index down by 3.8 percent.

Utilities, software and airline stocks also saw significant weakness on the day, moving lower along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan’s Nikkei 225 Index rose by 0.3 percent, while Hong Kong’s Hang Seng Index dipped by 0.3 percent.

Meanwhile, European stocks moved mostly lower on the day. The German DAX Index slumped by 1.1 percent and the French CAC 40 Index slid by 0.5 percent, although the U.K.’s FTSE 100 Index bucked the downtrend and increased by 0.3 percent.

In the bond market, treasuries gave back ground after moving sharply higher over the past several sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 3.6 basis points to 4.285 percent.

Looking Ahead

Trading on Friday is likely to be driven by reaction to the Commerce Department’s reports on personal income and spending in January, which includes the Federal Reserve’s preferred consumer price inflation readings.

SOURCE: RTTNEWS