NEW YORK (Reuters) -Major U.S. stock indexes declined sharply on Thursday with investors concerned about the impact President Donald Trump's trade policy may have on companies and the broader economy, while Marvell Technology's revenue forecast sparked concerns about spending on artificial intelligence infrastructure.
The Nasdaq Composite ended down 10.4% from its record high close on December 16, confirming the tech-heavy index has been in a correction since peaking several months ago.
Below are investor comments about the selloff, which also saw the S&P 500 dip below its 200-day moving average for the first time since November 1, 2023.
BRIAN NICK, HEAD OF PORTFOLIO STRATEGY, NEWEDGE WEALTH, ATLANTA
“We’re still fairly calm and so are our clients; selloffs of this magnitude are fairly common, we see about one every year in the order of magnitude of 10% or more. But what did catch attention today is that the market was on the verge of breaking below the psychologically important 200-day moving average, after which, typically, we’ll see another 5% to 8% correction. Here, our investors are paying attention to the news flow and how that interacts with the market – and that has been chaotic. So chaotic, in fact, that I’m surprised we haven’t had a more dramatic spike in volatility. This doesn’t feel like an irrational, completely overdone correction.”
JIM CARROLL, PORTFOLIO MANAGER, BALLAST ROCK PRIVATE WEALTH, CHARLESTON
“If the bounce upward doesn’t hold, then people get nervous and start to take more risk off the table. And the last two bounces we had, on Friday and on Wednesday, didn’t hold, so clearly we’re in risk-off mode again. Clearly people are looking at what is happening in Washington and wondering how the tariffs disruption and DOGE upheavals will be beneficial. So the reaction is to sell some stuff until the market finds a bottom.”
ADAM HETTS, GLOBAL HEAD OF MULTI-ASSET, JANUS HENDERSON, DENVER, COLORADO, AND OLIVE BLACKBOURN, PORTFOLIO MANAGER, JANUS HENDERSON, LONDON
"What is clear is that markets appear to agree that tariffs are not good for most risk assets. Given the higher exposure to global trade and industrial production, it is not surprising that equity markets outside of the U.S. tend to suffer when tariff announcements are leading headlines. However, U.S. equity markets have shown that they are not immune to trade conflict either. While there are concerns about the potential inflationary impact of tariffs, U.S. Treasuries have so far looked to have greater worries about signs of slowing U.S. growth."
TIM GHRISKEY, SENIOR PORTFOLIO STRATEGIST, INGALLS & SNYDER, NEW YORK
"The market opened lower, then made a move up, but then we've had a worse selloff. Trump has been very confusing about these tariffs. One day they're on and the next day they're off for a month. He did warn us that there was going to be some pain initially here, and the market doesn't like pain. I don't think that's giving investors a lot of confidence. Trump is being extremely aggressive and that frightens a lot of investors, and partially because we're just two weeks removed from the all-time highs, there are at least traders, if not investors, out there taking profits at these levels. There's no real news here... It's just some fear here about Trump and his perhaps lack of concern for the market."
DENNIS DICK, TRADER, TRIPLE D TRADING, ONTARIO, CANADA
“There are a lot of people who are really concerned about what this trade war is doing, not only directly with the cost of the tariffs, but with international relations, altogether. This is a serious concern for the market.”
“Maybe I want to reallocate to China, maybe I want to reallocate to Europe, which has been underperforming for years and doesn’t have this geopolitical risk. ... It just makes sense that U.S. markets are not the best place to be anymore.”
GENE GOLDMAN, CHIEF INVESTMENT OFFICER, CETERA INVESTMENT MANAGEMENT, EL SEGUNDO, CALIFORNIA
“The Trump bump for equities has now turned into the Trump slump. Equity markets continue to be in a risk-off mentality on the combination of market uncertainty and the overall mixed messages around tariffs emanating from Washington. In particular, the S&P 500 continues to drive toward the important key support level at the 200-day moving average (5730). Any significant breach through that level could send stocks into correction territory (around 5500 for the S&P 500).”
MARK HACKETT, CHIEF MARKET STRATEGIST, NATIONWIDE, DOWNINGTOWN, PENNSYLVANIA
"I think the rapidity with which the decline has happened is a little bit overdone. I would say half of the (recent selloff) was really attributable to fears of growth data coming in weak. Since then the back and forth .. . the tariff discussion on again, off again, is making people have a little bit of a temper tantrum."
"I think people are hitting the panic button because number one, there is this temper tantrum from lack of clarity on tariffs and then you line that up with the growth concerns."
"I think that this is an emotional driven selloff that is more likely to become a buying opportunity than a selling opportunity. There's not enough data out there to justify the move that we've seen."
ART HOGAN, B. RILEY, MARKET STRATEGIST, BOSTON
“The administration seems to be trying to play a ping pong game by announcing something and then pulling it back on tariffs, but this time it’s not working. People reacted to Howard Lutnick’s attempt to calm the markets with distrust. Clearly, there are signs of a slowdown ahead of any tariffs really digging in and faced with uncertainty, consumers, corporate leaders and investors are all going to freeze and put off longer-term business plans."
"At this point, there’s nothing left to give the market a boost now that the excitement of electing a president who was seen as pro-business has worn off.”
SAM STOVALL, MARKET STRATEGIST, CFRA, ALLENTOWN, PENNSYLVANIA
"The longer that these tariffs remain in place, the lower that the market is likely to go because of the increasing threat of inflation and recession."
"To make markets feel good, it would have to be a more broad based and more sweeping lift of the tariffs, not just individual sectors, such as automakers."
"Marvell earnings is also causing investors to think the AI-trade is slowing down, and it's time to take profits now that we can. The combination of tariffs and technology has been explosive for stock prices."
BILL STERLING, GLOBAL STRATEGIST, GW&K INVESTMENT MANAGEMENT, BOSTON
"A continuation of this on-again, off-again with tariffs particularly with Mexico and Canada (is what is creating uncertainty in markets)."
"The rational economic response to business leaders when there's such a high degree of uncertainty is to sit on their hands and just defer making decisions."
"The other is simply the size of the tariffs. This is way beyond what was experienced in 2018 with the you know so-called China trade war and this could raise inflation, which is what the Fed cares most about, by a full percentage point or a little bit more over the next year."
BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN
"On-again, off-again tariffs may be worse than just getting the tariffs done with. The uncertainty isn’t resolved, it’s just prolonged. Businesses will still try to hike prices just in case. Consumers may be more willing to accept price increases because they’re afraid of how much higher prices could go. It’s not a healthy dynamic. The Fed isn’t in a position to run to the rescue."
CAROL SCHLEIF, CHIEF MARKET STRATEGIST, BMO PRIVATE WEALTH, MINNEAPOLIS, MINNESOTA
"A combo of things has come spilling out the worry closet this week – tariffs started it (their actual imposition) and it continues given the flip flopping. Businesses are having a tough time adjusting and the data out recently – including this week – show. Sentiment (business and consumer) is down, inventories way up, job losses are mounting, and commentary from the Fed’s beige book all indicate business is having a tough time planning and consumers are concerned."
"Recent tech earnings reports are still making investors question how much longer the data center build-out goes on, even as excitement grows in use cases by more (and smaller) businesses."
(Reporting by Johann M Cherian, Saqib Iqbal Ahmed, Noel Randewich, Caroline Valetkevitch, Sinead Carew, Tatiana Bautzer, Suzanne McGee and Carolina MandlEditing by Nick Zieminski)
