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Nvidia (NVDA, Financial) shares dropped about 3% Thursday morning after posting fourth-quarter results that failed to sustain the recent artificial intelligence-driven upswing. The chipmaker, widely seen as a bellwether for AI-related momentum, reported earnings that met forecasts but did not surpass them enough to energize the broader tech sector.
Meanwhile, U.S. economic data provided mixed signals. The Commerce Department said fourth-quarter gross domestic product stood at 2.3%, while inflation indicators ended 2024 slightly above prior estimates. Labor Department figures showed jobless claims rose to 242,000, hinting at possible softness in employment. Despite the steady GDP reading, concerns about price pressures added to market caution.
President Donald Trump's statement that 25% tariffs on Canada and Mexico will go into effect on March 4 and an additional 10% tax on Chinese imports also sparked a trader's caution. His remarks raised the prospect of new trade frictions, and the dollar strengthened afterward. Equity indexes lagged in the wake of that loss of momentum, and technology shares especially led the way down.
While Nvidia's good-but-not-great performance dampened AI-optimism from the recent sessions, market watchers pointed out the semiconductor giant's efforts. The broader bull market still remains intact, but some analysts said that investors were taking geopolitical factors, like tariffs, and the interplay between inflation and growth, into their view.
This article first appeared on GuruFocus.