TheDrop Market Analysis, 03/13/25

Markets tumbled as President Trump makes a new wave of tariff threats.

President Donald Trump speaking at an event.

Markets generally shifted in the downward direction today. The Nasdaq fell by 2%, the S&P 500 fell by 1.4%, and the Dow fell by 1.3%. In addition, the Russell 2000 index fell 1.6%. Overall, investors once again chose to sell out of the market in droves as an array of events spark fear.

President Trump today made additional tariff threats to other trading partners across the globe, as if the previous tariffs which he implemented or proposed were merely just the beginning. In reaction to the European Union's over $28 billion retaliatory tariff to the president's "reciprocal tariffs," Trump threatened a retaliation-to-the-retaliation tariff of over 200% on all European Union wine imports. As of now, the EU has yet to respond. Also, the President and the Senate Republican Delegation failed in their missions of reducing federal expenditures to solve the debt ceiling crisis, which is about to become in the spotlight shortly, as the previous Biden administration in late December temporarily postponed talk of a debt ceiling increase until Spring 2025 to avert a government shutdown.

Investors, fearing an uptick of inflation, therefore were warranted to evacuating the stock market could dip further. However, markets did not collapse, but rather dipped by a small margin, as CPI data shows that the economy so far remains healthy, prices are going down, and inflation is cooling, all despite many economists and investors warning about the negative implications of his tariff policies. However, the true effect of these tariffs may take up to a year to truly be realized, so take this data with a grain of salt.

Insofar as the day has passed, the Magnificent 7 stocks performed abysmally as they begin to correct, albeit very slowly thus far. Nvidia fell 0.1%, Tesla fell 3%, and Apple fell 3.4%, to name a few. However, these are not significant dips, as compared to much of last week and earlier this week where some of these stocks fell by double digits.

Meanwhile, Intel made a substantial 14.6% surge as the "chip veteran" Lip Bu-Tan was named CEO of the company. Intel, despite being far lower from its post-pandemic highs of 2021, is slowly making a recovery progression upward. Furthermore, the value of gold strengthened, while the value of the USD fell, reflecting on differing sentiments by forex and domestic investors, respectively.