Market Volatility: Tariffs and NVIDIA’s Resilience

February presented significant challenges for the stock market and individual investors, resulting in notable declines across major indices.

Turmoil stemmed from a mix of factors, such as President Trump’s renewed tariff threats, the German elections, AI claims from DeepSeek, worsening consumer confidence, and persistent inflation. Consequently, the S&P 500 fell by 1.4%, the Dow lost 1.6%, and the NASDAQ dropped nearly 4% by month’s end.

March has kicked off with similar volatility. Markets experienced a sell-off yesterday as deadlines loomed for tariffs against Canada and Mexico announced by President Trump. The S&P 500 declined 1.7% on Monday, marking its worst day of the year. The Dow dropped by 1.5%, while the tech-heavy NASDAQ fell by 2.6%.

This morning, the stock market reacted sharply to tariff news, with major indices opening significantly lower. At one point, they were down over 1% before reducing some of those losses during afternoon trading. Investor concerns grew over the economic impact of these tariffs, which are now in effect.

In today’s Market 360, we will discuss the latest tariff developments, providing reasons for optimism and emphasizing what investors should remember during downturns. Solid stocks tend to recover. I’ll highlight NVIDIA as an example and explore how quantum computing could drive its future growth.

The Ongoing Tariff Situation

As of midnight Tuesday, President Trump enacted 25% tariffs on Canada and Mexico and raised the tariff on China to 20%. In response, Canada announced tariffs on $107 billion worth of U.S. goods. Additionally, China has introduced tariffs of up to 15% on essential U.S. agricultural products such as poultry and beef, with Mexico’s response expected shortly.

Despite the air of uncertainty surrounding tariffs, I remain optimistic that these measures will not contribute significantly to inflation. For instance, tariffs levied on China may be offset by deflationary trends in the country and a weaker yuan. However, Canadian and Mexican tariffs may present more immediate challenges.

As the retaliatory measures unfold, it will be crucial for Commerce Secretary Howard Lutnick to negotiate new trade agreements if necessary. Lutnick is known for advocating tariffs as a means to reduce income tax, which may indicate that immediate changes are unlikely.

Investors should remember that strong stocks typically rebound after sell-offs, much like fresh tennis balls bouncing back.

NVIDIA’s Resilience

A prime example of this rebound is NVIDIA Corporation (NVDA).

NVIDIA faced pressure after releasing its fiscal Q4 and fiscal year 2025 results on Wednesday, despite achieving record figures. Wall Street was concerned about the quarterly margins of 73%, compared to 76% the previous year. The company also projected margins of 71% for the current quarter. (For a comprehensive review of NVIDIA’s earnings, click here.)

After the earnings report, NVIDIA’s stock fell 8% on Thursday but rebounded on Friday. However, it faced another drop on Monday, opening down nearly 3% today before reversing course and closing up approximately 2%. This rebound is notable considering the NASDAQ dropped by 2.1% at its lowest before recovering some losses. The index finished the day down 0.3%.

Despite recent fluctuations, NVIDIA’s fundamentals remain strong. The company reported fourth-quarter revenue of $39.3 billion, a 78% increase year-over-year, surpassing analyst estimates of $38.16 billion. Data center revenue for Q4 reached $35.6 billion—up 93% from the same period last year. Moreover, fourth-quarter earnings rose 71% year-over-year to $0.89 per share, exceeding expectations of $0.85.

For the fiscal year 2025, NVIDIA achieved total revenue of $130.5 billion, reflecting an annual growth rate of 114%. Its earnings reached $2.99 per share, representing a growth of 130%. These figures also surpassed analyst expectations for full-year revenue and earnings.

Notably, NVIDIA’s new Blackwell chip contributed $11.0 billion in revenue during the fourth quarter, accounting for 28% of total sales.

When NVIDIA opened lower today, investors quickly moved to buy the dip, as the stock had recently hit lows not seen since September 2024. (For my detailed review of NVIDIA’s impressive earnings, go here.)

I plan to retain NVIDIA in our Growth Investor portfolio through the end of the decade, as I anticipate significant advancements, particularly in quantum computing.

Innovation remains relentless, making quantum computing an exciting investing opportunity. Recently, Amazon.com, Inc. (AMZN) introduced its first quantum computing chip, Ocelot, joining Microsoft Corporation (MSFT) and Alphabet Inc. (GOOG) in this competitive tech landscape.

Historically, early investors in emerging technologies tend to reap substantial rewards.

Understanding quantum computing and its market implications can be complex, so my team and I are developing a special series on quantum investing that will launch later this week.

In the meantime, we welcome your questions regarding quantum computing. I will address them in upcoming Market 360 articles. You can reach us at Feedback@InvestorPlace.com, using “Quantum computing questions” in the subject line to ensure I review each inquiry.

Sincerely,

Louis Navellier

Editor, Market 360

The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

NVIDIA Corporation (NVDA)