TheDrop Market Analysis, 02/03/25

Markets sank in reaction to the Trump tariffs, but breaking news allowed for a strong bounce-back.

The S&P 500 sank 0.8%, the Dow fell 0.3%, and the Nasdaq plummeted 1.2%. Meanwhile, the value of gold and the USD skyrocketed for yet another day post-Trump inauguration. Overall, market sentiments reflected on Trump's mini trade war between the U.S. and Canada, Mexico, and China, with him enacting a 25% tariff on the former and middle, and a 10% tariff on the latter.

Yet, over the course of the day, stocks remedied their losses as a result of the pausing of these tariffs by President Trump. The president issued these pauses after both Canadian Prime Minister Justin Trudeau and Mexican President Sheinbaum conceded to his demands regarding the fentanyl trade and border security.

Today was particularly bad for big tech. These companies, especially with the 10% tariff on China having been implemented, would spell disaster with a much more expensive duties bill as well as a lack of access to cheap labor overseas. Nvidia fell 2.8%, Tesla fell 5.2%, Microsoft fell 1%, and Apple fell 3.4%, to name a few. Other stocks like Intel and Google also had losses, but much more marginally due to their more domestic operations rather than overseas like the former multinational corporations.

Not many stocks rose today, but among the very few were IonQ and Tempus AI, two companies which are beginning to recover from previous deep losses.