Stock Market Update: Dow Jones Drops on Trump Tariff Concerns; Nvidia Slips as Warren Buffett Stock Approaches Buy Zone

The stock market experienced a downturn on Wednesday as investors reacted to reports that former President Donald Trump is set to announce new tariffs on the auto industry. The uncertainty surrounding potential export restrictions weighed on major indexes, with Nvidia and Tesla among the hardest-hit stocks.

Market Overview: Dow Jones and Nasdaq Decline

The Dow Jones Industrial Average fell 0.3%, showing relative resilience compared to other major indexes. The S&P 500 declined by 1.1%, while the Nasdaq Composite took the hardest hit, dropping 2% (over 370 points). The tech-heavy Nasdaq remains well below its 200-day moving average, with the S&P 500 also slipping below this key technical level.

Trading volume on the New York Stock Exchange (NYSE) was lower, whereas the Nasdaq saw higher volume compared to the previous trading session. Declining stocks significantly outpaced advancers, with a 7-to-3 ratio on the Nasdaq and a 9-to-5 ratio on the NYSE.

The Russell 2000, which tracks small-cap stocks, also dropped 1.1%, while the Innovator IBD 50 ETF underperformed with a 2.1% decline. Meanwhile, the yield on the 10-year U.S. Treasury note rose by four basis points to 4.35%.

Sector Performance: Technology and Consumer Discretionary Stocks Lag

Among the S&P 500 sectors, consumer staples, utilities, and energy stocks gained, while technology and consumer discretionary stocks were among the biggest losers.

Nvidia Slips Amid Export Restrictions

Nvidia shares declined following concerns over potential new U.S. restrictions on chip exports to China. The stock, which had recently reclaimed its 21-day moving average, fell back below this level on Wednesday.

Other major tech stocks also faced selling pressure, with Tesla dropping nearly 6%, snapping a five-day winning streak. The electric vehicle giant is facing resistance at its 200-day moving average ahead of its Q1 delivery report on April 2.

Trump’s Tariff Announcement Impacts Auto Stocks

Reports indicate that Donald Trump will announce new tariffs on the auto industry at 4 p.m. ET. White House press secretary Karoline Leavitt confirmed the planned press conference.

The announcement triggered sharp declines in auto stocks:

• General Motors (GM) and Stellantis both fell over 3%.
• Ford Motor Co. managed to post a modest gain.
• Mercedes-Benz Group plummeted more than 4%, while Ferrari slid nearly 5%.
• Toyota and Honda each lost about 2%.

Retail Sector: Dollar Tree Trims Gains

Dollar Tree initially surged over 9% after announcing the sale of its Family Dollar business for $1 billion to Brigade Capital Management and Macellum Capital Management. However, the stock pared its gains, closing with a 3% increase.

Despite the boost, Dollar Tree’s downward-sloping moving averages indicate a bearish trend, and the stock remains below its 50-day moving average.

Chewy Stock Volatility Following Earnings

Chewy’s Q4 earnings and revenue exceeded expectations, but the stock was highly volatile. Initially plunging at market open, the stock briefly reversed course before ending the session down 1.1%.

• Revenue: $3.25 billion (+15% YoY).
• Earnings per share: $0.28 (+56% YoY).

Oil Stocks Approach Buy Points

Oil-related stocks gained traction, with oil and gas royalty stocks, oil exploration, and drilling stocks among the top performers.

• Range Resources pulled back slightly but remained near its buy point of 40.49.
• IBD Leaderboard stock LandBridge held within its buy zone at 76.22.

Chip Export Restrictions Weigh on Market

The Trump administration’s latest crackdown on chip exports also impacted investor sentiment. Several Chinese companies were added to the export blacklist due to national security concerns.

U.S. chipmakers looking to sell to blacklisted firms will now require government approval. One of Nvidia’s key customers is reportedly affected by the new restrictions, further pressuring the stock.

Warren Buffett-Backed Insurance Stocks Near Buy Zones

Several insurance stocks are approaching key buy points:

• Chubb (Berkshire Hathaway holding) is consolidating near a buy point of 302.05.
• Travelers (recent IBD Stock of the Day) is progressing toward a buy point of 269.56.
• AON, an IBD Leaderboard stock, remains in a buy zone at 395.33.

Key Economic Reports to Watch

Economic data released on Wednesday showed durable goods orders rose 0.9% in February, significantly better than the expected 1% decline.

Investors are now awaiting several critical reports:

• Thursday: The U.S. Bureau of Economic Analysis (BEA) will release Q4 productivity data. GDP is expected to increase 2.4% YoY.
• Friday: The Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge, will be released. Analysts predict 0.3% MoM inflation, with core PCE rising to 2.7% YoY (from 2.6%).

Dow Jones Winners: McDonald’s and Chevron Gain

Despite the overall market pullback, some Dow Jones stocks managed to post gains:

• McDonald’s, Chevron, and Procter & Gamble closed higher, providing some stability to the index.

GameStop Surges on Earnings and Bitcoin Plan

GameStop shares rallied after its Q4 earnings report:

• Revenue: $1.3 billion (-28% YoY).
• Earnings per share: $0.30 (+36% YoY).
• The company announced plans to add Bitcoin to its Treasury reserve assets, driving additional investor interest.

Final Thoughts: Market Faces Volatility Ahead

The stock market remains under pressure due to Trump’s tariff plans, tech stock weakness, and chip export concerns. While some sectors, such as energy and consumer staples, held firm, technology and auto stocks bore the brunt of the downturn.

Investors should closely monitor upcoming economic data, particularly the PCE inflation report, for clues on the Federal Reserve’s next policy moves.