U.S. Stock Market Plunges Amid Trade Policy Uncertainty

Major U.S. stock indices tumbled to session lows on Thursday, March 6, 2025, as uncertainty over trade policies dampened investor sentiment.

U.S. President Donald Trump announced that certain Canadian and Mexican goods complying with the United States-Mexico-Canada Agreement (USMCA) would receive a one-month tariff exemption. However, unlike previous sessions, this announcement failed to lift the market as concerns over trade policy continued to weigh on investors.

According to Xinhua on Friday, March 7, 2025, the Dow Jones Industrial Average dropped by 427.51 points or 0.99%, closing at 42,579.08. The S&P 500 declined by 104.11 points or 1.78% to 5,738.52, while the Nasdaq Composite fell sharply by 483.48 points or 2.61% to 18,069.26. Nasdaq is now down over 10% from its all-time high in December, officially entering correction territory.

Among the 11 major sectors in the S&P 500, 10 ended in the red. Consumer goods and real estate led the declines, falling 2.93% and 2.78%, respectively. Energy was the only sector to post gains, rising 0.50%.

U.S. Treasury Secretary Scott Bessent reaffirmed the administration’s commitment to a protectionist trade policy. "As long as foreign economic practices harm our economy and citizens, the United States will respond accordingly. This is an 'America-first' trade policy," he stated at the Economic Club of New York.

However, investors appeared fatigued by the continuous statements from government officials and recent tariff policy shifts. Keith Lerner, Chief Market Strategist at Truist, noted that the volatility has created uncertainty in daily market movements. "There's a lot of confusion, and that confusion seeps into daily market fluctuations," he said.

Tech Sector Leads Market Sell-Off

The technology sector bore the brunt of the sell-off after Marvell Technology issued disappointing quarterly sales projections, missing investor expectations for AI-driven growth. Shares of Marvell plummeted 19.81%, dragging down other chipmakers like Nvidia, Broadcom, and AMD.

Meanwhile, investors analyzed the latest Labor Department report on the job market. Data showed that weekly jobless claims dropped to 221,000, lower than both the previous week and economists' estimates. However, Washington, D.C., recorded 1,510 new unemployment claims for the week ending March 1, down from 1,893 but still significantly above the historical average.

Separately, a report from Challenger, Gray & Christmas revealed a sharp increase in layoffs for February, reaching 172,017—the highest monthly level since July 2020. This marks a staggering 245% surge in job cut announcements compared to the previous month.

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