Wall Street Declines as Tech Stocks Struggle Amid Tariff Fears

Wall Street closed significantly lower on Thursday, driven by declines in technology and discretionary stocks. The S&P 500 index confirmed that it has entered correction territory as investor sentiment remained subdued amidst ongoing tariff discussions from the Trump administration. All three major indexes ended the day in negative territory.

Market Index Performance

The Dow Jones Industrial Average (DJI) dropped 1.3%, equating to a loss of 537.36 points, closing at 40,813.57. Out of 30 components in the index, only 10 finished positively, while 20 saw declines.

The Nasdaq Composite, heavily weighted with tech stocks, fell by 345.44 points or 2%, finishing at 17,303.01.

Meanwhile, the S&P 500 dipped 77.78 points, or 1.4%, to settle at 5,521.52. Notably, 10 of the 11 sectors within the benchmark index ended the day down, with the Consumer Discretionary Select Sector SPDR (XLY), Communication Services Select Sector SPDR (XLC), and Real Estate Select Sector SPDR (XLRE) losing 2.5%, 2.1%, and 2%, respectively. Only the Utilities Select Sector SPDR (XLU) gained, rising by 0.3%.

The CBOE Volatility Index (VIX), a measure of market volatility, increased by 1.8% to reach 24.66. Thursday’s trading volume totaled 15.11 billion shares, below the 20-session average of 16.60 billion, and decliners outnumbered advancers by a ratio of 2.75-to-1 on the NYSE.

S&P 500 Confirms Correction as Tariff Concerns Persist

Earlier this month, the Nasdaq Composite acknowledged a correction after dropping 10.4% from its December 16 all-time high. On Thursday, the S&P 500 closed 10.1% lower than its February 19 record, confirming its correction status.

Investor confidence has been shaken by the Trump administration’s inconsistent tariff policies, which have reversed gains made since Trump’s election in November. Concerns about rising inflation pushing the economy toward a recession continue to loom large in market analysis.

The market turmoil intensified on Thursday when Trump threatened a 200% tariff on European wines and spirits following the E.U.’s announcement of a 50% tax on U.S. whiskey imports. Such unpredictable tariff discussions have dampened investor sentiment, overshadowing positive indicators such as a decrease in producer-side inflation.

As a result, stocks of Warner Bros. Discovery, Inc. (WBD) and Meta Platforms, Inc. (META) fell by 5.1% and 4.7%, respectively. Both companies currently hold a Zacks Rank #3 (Hold).

Latest Economic Data Released

The Department of Labor reported that initial claims for unemployment benefits decreased by 2,000 to 220,000 for the week ending March 8, reflecting a revised previous week’s level of 222,000. The 4-week moving average rose to 226,000, up by 1,500 from the prior week’s revised average of 224,500.

Continuing claims for the week ending March 1 reached 1,870,000, a decrease of 27,000 from the previously reported level of 1,897,000. The 4-week moving average for continuing claims grew by 6,250 to 1,872,250.

According to the U.S. Bureau of Labor Statistics, the Producer Price Index (PPI) remained flat in February, while the January figure was revised upward to 0.6% from 0.5%. Core PPI reflected a 0.4% increase in February, with the January figure also revised up from 0.1% to 0.2%.

Zacks’ Research Team Highlights Promising Stocks

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This top pick represents a leading financial firm with a rapidly growing customer base of over 50 million and an array of innovative solutions, signaling strong future performance. While not all selections guarantee success, this stock could outperform previous Zacks’ top stocks like Nano-X Imaging, which surged 129.6% in just over nine months.

For more insights, view our top stock recommendations and four additional options.

Warner Bros. Discovery, Inc. (WBD): Free Stock Analysis

Meta Platforms, Inc. (META): Free Stock Analysis

This article originally published on Zacks Investment Research (zacks.com).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.