Stocks tumbled on Wall Street as Donald Trump’s global trade war stoked investor fears, coinciding with rising concerns that an AI-driven market bubble might be ready to burst.
The tech-focused Nasdaq Composite fell 2%, while the S&P 500 dropped 1.6%, and the Dow Jones Industrial Average slid 1.4% in what has been a volatile week for equities.
Markets had briefly rebounded on Wednesday after Trump announced a one-month delay on tariffs for carmakers covered by trade deals with Mexico and Canada.
However, sentiment soured today following disappointing earnings from Marvell Technology, a semiconductor maker, which reignited worries of a broader AI-related sell-off. At the same time, tensions from the U.S. administration’s trade policies with neighbouring countries continue to escalate.
Matthew Cairns, a strategist at Rabobank, commented: “Starting a trade war that prompts retaliatory measures from targeted countries adds more pressure on the U.S. economy. That’s not a positive scenario for equities or earnings growth, especially since it’s likely to leave U.S. households poorer.”
