Market Turmoil: Tariffs and Tech Woes Send Stocks Reeling
Tariff Tensions Send Dollar Soaring
A sudden announcement from the White House that President Donald Trump plans to impose tariffs on China, Mexico, and Canada this weekend sent shockwaves through the markets, causing the dollar to surge and stocks to plummet. The news erased earlier gains, with the S&P 500 falling 0.2% and the Nasdaq 100 rising 0.4%.
Tech Sector Under Pressure
Concerns about the impact of a cheap artificial intelligence model from Chinese startup DeepSeek on tech valuations also weighed on the market. The emergence of DeepSeek has raised questions about the profitability of tech giants, with some analysts warning that the “Magnificent Seven” could become the “Lagnificent 7” this year.
Investors Seek Shelter
As uncertainty grips the markets, investors are seeking shelter in safe-haven assets. The Bloomberg Dollar Spot Index rose 0.4%, while the yield on 10-year Treasuries advanced two basis points to 4.54%. Oil prices swung between gains and losses, and cryptocurrencies such as Bitcoin fell 2.3%.
Earnings Season Brings Mixed Results
The earnings season has brought mixed results, with some companies beating expectations and others falling short. Apple Inc. gave a reassuring revenue forecast, while Intel Corp. issued a revenue forecast that fell short of analysts’ expectations. Exxon Mobil Corp. beat earnings estimates, but Chevron Corp. raised dividends by 5% despite underperforming expectations.
Experts Weigh In
According to Max Gokhman at Franklin Templeton Investment Solutions, “Bulls have tried their best to keep calm and carry on through all the turbulence this week, but the pressure of uncertainty keeps them from peacefully grazing on stocks.” Brent Donnelly, president of Spectra Markets, noted that “traders have had to contend with ‘headline ping-pong’ similar to 2017/2019 as various outlets publish various unsourced stories which the administration quickly refutes, leading to wild whipsaw price action.”
Looking Ahead
Despite the turmoil, some experts remain optimistic about the market’s prospects. Solita Marcelli at UBS Global Wealth Management believes that “the greater efficiency from new, lower-cost algorithms will lead to increased economic productivity, which is supportive of the broader equity market.” The firm sees the S&P 500 reaching 6,600 by the end of the year.
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