Stocks Dive to 4-Month Low as Tariff Fears Persist

(Thursday market close) Tariff-related selling emerged again on Wall Street today despite pledges by the Trump administration to pull back some trading barriers imposed on goods from Mexico. Tech stocks also drove losses in the major indexes after Marvell's (MRVL) guidance disappointed investors and sent the reeling chip sector to the lowest intraday levels since last August.

The Dow Jones Industrial Average^® ($DJI) fell 427.51 points (–0.99%) to 42,579.08; the S&P 500^® index (SPX) dropped 104.11 points (–1.78%) to 5,738.52, and the Nasdaq Composite^® ($COMP) lost 483.48 points (–2.61%) to 18,069.26.

President Trump said Thursday that he would offer a one-month exemption from tariffs for imports from Mexico that trade under the rules of the U.S.-Mexico-Canada Agreement, the trade pact he signed in his first term, according to media reports. Mexican products have an exemption until April 2.

"Some tariff delay announcements aren't providing any relief for stocks, at least initially," said Kevin Gordon, director, senior investment strategist at Schwab.

Thursday's intraday low of 5,711 for the SPX was below key technical support at the 200-day moving average of 5,730 and the weakest reading since November 4, the day before the U.S. presidential election. However, the index managed to close just above the 200-day, possibly a sign of some technical firmness heading into tomorrow. It was still the lowest close in four months.

The SPX is down more than 4% since the final session before the inauguration. Back-and-forth messaging from the White House on tariffs has led to confusion among corporations and investors, and to risk-off sentiment and choppy trading across most of the market.

"Volatility in stocks continues to persist as markets monitor tariff developments and economic data," said Nathan Peterson, director of derivatives analysis at the Schwab Center for Financial Research.

Barring any major overnight developments, all eyes will likely turn to tomorrow's 8:30 a.m. ET February nonfarm payrolls report, which could give the Federal Reserve and investors new clarity amid emerging economic concerns.

Analysts expect Friday's report to show 159,000 jobs added, with unemployment steady at 4%. Job cuts associated with government layoffs aren't likely to show up. Some economists have issued low-ball estimates for jobs growth of under 100,000.

Any major shortfall in jobs growth or uptick in unemployment might make investors even more nervous about the state of the economy, possibly weighing further on stocks and Treasury yields. However, yields are up from recent lows thanks in part to some recent positive economic data and the administration's apparent flexibility on tariffs.

Some relief from the drumbeat of soft data arrived late this week as ISM Services PMI^® data came in better than expected and initial weekly jobless claims today fell to 221,000 from 242,000 the prior week. Continuing claims, however, which track how difficult it is to find a job once an employee is laid off, jumped to a nearly three-year high near 1.9 million.

Challenger job cuts data Thursday reinforced economic growth fears as February layoffs soared to 172,000, up from under 50,000 in January and the highest for February since 2009. This partly reflects cuts by the Department of Government Efficiency (DOGE), according to the report.

Wednesday's February ADP employment change of 77,000 was well below the 143,000 Briefing.com consensus, but those private sector numbers don't often correlate with the official government reading. And the Atlanta Fed's GDPNow meter stayed under water for first quarter gross domestic product (GDP) at –2.4%, up just nominally from –2.8% earlier this week.

Yields are down from peaks earlier this year, but inflation expectations remain high.

"Government policies that impose trade barriers and limit immigration have the potential to raise inflation in the short run and slow growth in the long run," said Kathy Jones, chief fixed income strategist at Schwab. "It looks like the bond market has decided to bypass short-term inflation concerns and focus on the long-term prospects."

Rate cuts later this year still seem likely as the Fed funds futures market is now pricing in three cuts by year-end, but the Fed will probably be on hold the next few meetings. The CME FedWatch tool puts odds of another rate pause at around 90% for the Fed's meeting later this month, but projects roughly a 50-50 chance of a rate cut at the early May Fed meeting. At least one rate cut by June is an 85% possibility, according to futures trading.

From a technical perspective, there are signs of the market approaching oversold conditions, Schwab's Peterson said. All the major indexes dropped to their 200-day moving averages and the Cboe Volatility Index^® (VIX) climbed above 25. It had been below 15 at its 2025 lows.

Also, the SPX Relative Strength Index (RSI)—a momentum indicator—dropped to 33 today, with 30 historically seen as oversold.

"But markets are sensitive to tariff headlines and soft economic data so it's probably too early to call a near-term bottom," Peterson warned.

From a sector standpoint, Thursday was a sea of red. Only the S&P energy sector managed to post any gains by late in the session as info tech and consumer discretionary fell to near the very bottom of the scorecard. Those are two of the worst sector performers the last month, with consumer discretionary down double digits on pressure mainly from Amazon (AMZN) and Tesla (TSLA).

Weakness from Nvidia (NVDA), Broadcom (AVGO), and other chip stocks crushed info tech Thursday.

• Marvell (MRVL) plunged almost 20% despite the company topping analysts' earnings expectations, apparently because investors wanted even better guidance than Marvell delivered. This came even as the company provided an upbeat overall outlook expecting strong AI-related growth. Marvell's rough day echoed Nvidia's upbeat earnings report and market reaction last week when investors picked apart the outlook and sold off the stock due to a small projected margin drop.
   
• Nvidia fell 5.7% and Broadcom fell 6.3%, dragged down by weakness in Marvell and general risk-off trading that's swept through the tech sector and put the S&P 500 Technology Select Sector Index (IXT) below its 200-day moving average. Broadcom reports Thursday afternoon, and investors likely will survey the outlook carefully for any signs of weakness.
   
• MongoDB (MDB) toppled nearly 27% despite earnings from the software firm that beat Wall Street's estimates. Guidance disappointed investors.
   
• Bitcoin (/BTC) fell 0.8% after Wednesday's rebound and crypto-related stocks MicroStrategy (MSTR) and Coinbase (COIN) lost 1.4% and 3.7%, respectively as risk-off sentiment continued.
   
• Victoria's Secret (VSCO) fell 8.2% as guidance appeared to disappoint investors. Tariffs could be a source of pressure, the company said.
   
• Tesla fell another 5.6% to a four-month low as investors continued to pile out of the stock amid declining sales numbers in Europe and China.
   
• Palantir (PLTR), Snowflake (SNOW), AppLovin (APP), Reddit (RDDT), and Roku (ROKU) fell sharply as tech and internet stocks generally saw selling pressure amid risk-off sentiment.
   
• The 10-year Treasury note yield (TNX:CGI) climbed two basis points to 4.29% on hopes for tariff relief.
   
• Crude oil (/CL) rebounded slightly Thursday from multi-year lows posted Wednesday below $66 per barrel. Still, worries that U.S. demand might slide in a slumping economy kept crude near the lowest level since mid-2023. Falling crude and Treasury yields reflect slowdown worries, but ultimately could provide an economic boost if they stay down.
   
• Homebuilder stocks were a bright spot today, helped by this week's sharp rise in the MBA Mortgage Applications Index. Home Depot (HD) and Lowe's (LOW) both outperformed the SPX today, as well.

Volatility considerations: If you're worried about the current choppiness, you're almost certainly not alone. Turbulent market conditions can make anyone nervous, so here's some of Schwab's expert perspective on things investors might want to consider at such times, including resisting the urge to sell and taking the long-term view.

Check out the Investors' Calendar for a summary of the top economic events and earnings reports on tap this week.

March 7: February nonfarm payrolls, February unemployment, and February hourly wages.
March 10: Expected earnings from Oracle (ORCL).
March 11: January Job Openings and Labor Turnover Survey (JOLTS) and expected earnings from Dick's Sporting Goods (DKS) and Kohl's (KSS). 
March 12: February Consumer Price Index (CPI) and core CPI and expected earnings from Adobe (ADBE).
March 13: February Producer Price Index (PPI) and core PPI, and expected earnings from Dollar General (DG) and Ulta Beauty (ULTA).
March 14: University of Michigan Preliminary March Consumer Sentiment.