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US tech stocks fell sharply on Wednesday with the shock of new Wall Street volatility as Donald Trump’s trade tariffs and uncertainty around the world’s biggest economic health focused on investors’ sentiment.
NASDAQ Composite has set the stage for three consecutive days of profits, down 1.6% due to lunchtime deals in New York. Chipmaker Nvidia and Elon Musk’s electric vehicle company Tesla lost 5.2 and 5.7 percent, respectively, and was one of the biggest disabled.
Wall Street’s wider S&P 500 gauge fell 0.8% at lunchtime.
Wednesday’s pullback of tech stocks amounted to a “reality check” in the market after earning money at the beginning of the week following concerns over President Donald Trump’s tariffs and weakening of consumer sentiment and concerns over weakening of consumer sentiment, according to Peter Tochir, head of macro strategy for Securities at Brokers Academy.
“People were too comfortable on Monday, but we still find ourselves in a very tricky environment,” Tchir mentioned the 2.3% NASDAQ rally earlier this week.
Trump is set to unveil a new tariff regime next Wednesday at an event called “liberation day.” This could include heavy new taxes on major US trading partners, including Mexico and Canada, after the president previously imposed a 25% obligation on global imports of steel and aluminum.
Long-term US product orders rose 0.9% from the previous month in February, the Commerce Department said Wednesday it was far above the 1% decline in the FactSet poll. But an economist at investment bank Barclays noted that rising orders for vehicle parts “in the midst of tariff forecasts – related disruptions” had driven the rise.
Barclays economists also said the high-cost “capital goods” orders have fallen, suggesting that “there is a possibility that a resistance to fixed investment could be shaped from policy uncertainty.”
Consumer optimism has also shown signs of darkness in recent weeks, with data from the conference committee on Tuesday showing Americans’ outlook for future sinking in 12 years.
Investors and economists are increasingly warning about the possibility of slowing US growth, just as Trump’s escalating world trade war increases prices.
Federal Reserve policymakers significantly reduced their growth forecasts for the US economy last week, whilst increasing their inflation outlook. The Bureau of Economic Analysis is scheduled to release a new report on inflation on Friday.
