Nasdaq Plunges, Trump Tariff Boosts USD
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US stocks ended lower on Thursday amid fresh tariff threats from President Trump, some mixed economic data, and after an earnings report from AI-chip darling Nvidia failed to impress.
The second reading for US Q4 gross domestic product (GDP) showed a growth rate of 2.3%, unchanged from the first reading and matching economists’ forecasts but lower than the final Q3 figure of 3.1%.
Meanwhile, initial jobless claims rose to 242,000 in the latest week, an increase from the previous figure of 220,000, and well above forecasts for 222.000.
And US pending home sales fell to -4.6% in January, much weaker than forecasts of -1.3%, with the index hitting an all-time low of 70.6, down from 74.2 in the prior month.
US durable goods orders, however, surprised on the upside, coming in at 3.1%, beating forecasts of 2.0% and marking a sharp turnaround from the previous month’s figure of -1.8%.
The main macro focus, however, was on the Federal Reserve's preferred measure of inflation, due on Friday, with the annualised personal consumption expenditures (PCE) growth rate expected to have slowed to 2.4%, down from a 2.6% increase in December.
This would be a relief amid growing concern over the inflationary impact of President Trump's tariff threats, with the postponed 25% levies on US imports from Canada and Mexico now set to kick in next week, and tariffs on Europe to follow.
On currency markets, the US dollar extended its bounce from almost 11-week lows, gaining 0.50% versus the pound at 0.7930 and adding 0.79% against the euro at 0.9613.
At the close in New York, the blue-chip Dow Jones Industrials Average was down 0.5% at 43,239, while the broader S&P 500 index shed 1.6% at 5,861, and the tech-laden Nasdaq Composite dropped 2.8% at 18,544.
Nvidia fell 8.5% as the chip maker’s guidance for Q1 profit margins fell short of estimates, overshadowing Q4 results and revenue guidance for the current quarter that beat analyst expectations.
Meanwhile, eBay lost 8.2% after the eCommerce giant posted weaker-than-expected revenue guidance for the first quarter, overshadowing a fourth-quarter earnings beat.
And Salesforce shed 4.1% following disappointing Q4 revenues and a softer-than-expected outlook.
Away from tech, Bath & Body Works slumped 12.7% after the retailer issued a below-consensus forecast for its first quarter.
But Warner Bros. Discovery gained 4.8% as its fourth quarter adjusted earnings slightly exceeded forecasts, although revenue was weaker than expected.
On commodity markets, crude prices jumped as supply concerns resurfaced after President Trump revoked a licence granted to oil major Chevron to operate in Venezuela.
US WTI crude was up 2.2% to $70.10 a barrel, while UK Brent crude gained 1.8% to $73.81 a barrel.
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