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Nvidia, Trump tariffs shake markets

Losses at chipmaker Nvidia dragged down US stock indices while a confirmation of new tariffs on imports from Mexico, Canada and China by US President Donald Trump further unsettled investors on Thursday. Both US and European equity markets finished Thursday deep in the red and Asia followed suit on Friday with considerable losses at chipmakers. The US dollar strengthened on the tariff news. 

Data
Autore
Shane Strowmatt, LGT
Tempo di lettura
5 minuto

US economy
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Nvidia shares plummeted 8.5% on Thursday following its quarterly results a day earlier, pushing the company’s market capitalisation back below USD 3 trillion and heavily impacting the Nasdaq-100 index, which fell 2.8% to 20,550.95 points. Other chip stocks, including Applied Materials and Broadcom, also declined. The Dow Jones Industrial Average dropped 0.5% to 43,239.50 points, while the S&P 500 lost 1.6%, closing at 5861.57 points. The sell-off went beyond equities as the US dollar soared. The US Dollar Index increased 0.8% on Thursday, while gold continued to fall from recent all-time highs, trading near USD 2860 per ounce. Meanwhile, bitcoin slid to its lowest level since November, trading under USD 80,000.

Trump confirms new tariffs on Mexico, Canada and China

US President Trump announced on Thursday that tariffs on Mexico and Canada will commence on 4 March, alongside an additional 10% tariff on Chinese imports. Trump cited ongoing issues with illicit drug trafficking from Mexico and Canada as the rationale for these tariffs. The announcement caused confusion among market participants as it contradicted previous statement by the White House.

US GDP growth slows in fourth quarter

The US Bureau of Economic Analysis reported on Thursday that real GDP grew at an annual rate of 2.3% in the fourth quarter of 2024, down from 3.1% in the third quarter. The deceleration was mainly due to declines in investment and exports, partially offset by increased consumer and government spending. For the entire year, real GDP rose by 2.8%, consistent with previous estimates.

US jobless claims surge to 242,000

Weekly jobless claims in the US rose to a seasonally adjusted 242,000 for the week ending Saturday, according to a Labour Department report on Thursday. This increase of 22,000 from the previous week marks the highest level since early October 2024 and exceeds the market’s expectations. The rise in claims comes amid concerns over economic growth and recent declines in consumer sentiment. Trump's efforts to reduce the federal workforce, led by Elon Musk’s advisory board, have contributed to thousands of job cuts.

Asian chip stocks decline on Nvidia's market cap drop

Asian semiconductor stocks fell on Thursday, dragged down by losses at Nvidia in US trading. Advantest, Tokyo Electron, Renesas Electronics, Lasertec and TSMC were among the biggest losers. Broad stock indices in the Asia-Pacific region were trading lower on Friday, mirroring the declines in US and European markets. Japan’s Nikkei 225 was down 3%, despite retail sales in the country growing at the fastest pace in nearly a year. Korea’s Kospi fell 3.2%, and Australia’s S&P/ASX 200 was 1.2% lower. Hong Kong’s Hang Seng Index dropped 2.6%, while mainland China’s CSI 300 was trading 1.2% lower.

Swiss GDP growth accelerates in fourth quarter

Switzerland's gross domestic product (GDP) grew by 0.5% in the fourth quarter of 2024, up from 0.2% in the previous quarter, driven by robust performance in both the industrial and services sectors, according to data released on Thursday. The chemical and pharmaceutical industries saw significant growth, contributing to a 4.2% increase in exports. The services sector, including accommodation and food services, also showed strong growth, supported by a rise in international tourism. Overall, GDP growth for 2024 was 0.9%, down from 1.2% in 2023. Switzerland’s SMI declined 0.6% on Thursday.

EU economic sentiment rises in February

Economic sentiment in the EU and euro area improved in February, with the Economic Sentiment Indicator (ESI) increasing to 97.1 in the EU and 96.3 in the euro area. However, the Employment Expectations Indicator (EEI) fell to 98.1 in the EU and 97.0 in the euro area, reflecting weaker employment plans in services and construction. Industry confidence rose for the second consecutive month, while consumer confidence saw a slight improvement. European stock indices finished Thursday's session in negative territory. The Euro Stoxx 50 dropped 1.1%, Germany’s DAX fell 1.1% to 22,550.89 points, and France’s CAC 40 decreased by 0.5%.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Allianz, BASF, Holcim, and Pearson.

Economic data in focus: German retail sales (08:00), Swiss KOF Economic Barometer (09:00), German unemployment rate (09:55), German Consumer Price Index (14:00), Canadian gross domestic product (14:30), US personal consumption expenditures (14:30).

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.

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