Markets News, March 4, 2025: Stocks Close Lower as Tariffs, Economic Concerns Weigh on Sentiment; Banks Lead Broad-Based Decline

Stocks closed sharply lower on Tuesday after a late-day rally fizzled, as businesses and investors assessed the impact of newly imposed U.S. tariffs against leading trade partners. 

The Dow Jones Industrial Average and S&P 500 shed 1.6% and 1.2%, respectively, while the tech-heavy Nasdaq Composite fell 0.4%. It was the second consecutive day of big, broad-based declines for U.S. stocks amid growing concerns about the health of the economy and uncertainty about the impact of Trump administration policies. The S&P 500 and Nasdaq have now given back all of the gains they posted following the presidential election in early November.

Overnight, the U.S. imposed long-awaited 25% tariffs on Canada and Mexico, while doubling the levy on goods imported from China to 20%. Beijing and Ottawa quickly announced retaliatory tariffs on a number of products, while Mexico said it would announce measures on Sunday. The White House argues that tariffs will lead to more investment and new manufacturing jobs in the U.S., while investors fear that the trade measures will spark inflation, slow economic activity and harm companies that do business around the world.

Target (TGT) shares closed 3% lower after the retail giant reported better-than-expected earnings but warned that consumer uncertainty, as well as uncertainty around tariffs, would weigh on current-quarter results. Best Buy (BBY) shares plunged 13% after the electronics retailer released strong quarterly results but said that tariffs would likely lead to price increases that hurt sales.

Shares of automakers, which stand to be hit hard by the tariffs, also lost ground. Jeep and Chrysler maker Stellantis (STLA) and General Motors (GM) each dropped more than 4%, while Ford (F) shares fell nearly 3%.

The financial services sector led the S&P 500 decline amid the uncertain economic outlook. Bank of America (BAC) and Citigroup (C) both declined more than 6%, while shares of Wells Fargo (WFC), JPMorgan Chase (JPM), Goldman Sachs (GS) and American Express (AXP) also tumbled. The S&P 500 financial services sector index was down 3.5%.

Shares of the world's largest technology companies turned in a mixed performance on Tuesday. Tesla (TSLA) shares, which have lost about a third of their value since the start of the year, fell more than 4%, while Apple (AAPL), Amazon (AMZN) and Meta Platforms (META) also lost ground. AI chipmaker Nvidia (NVDA), which had fallen nearly 9% yesterday, was up nearly 2%, while Microsoft (MSFT), Alphabet (GOOG) and Broadcom (AVGO) also gained ground.

Among noteworthy gainers, shares of server maker Super Micro Computer (SMCI) jumped more than 8% after plunging 13% the previous session. Walgreens Boots Alliance (WBA) shares gained nearly 6% after The Wall Street Journal reported that the pharmacy chain was close to a roughly $10 billion deal to be taken private. Strategy (MSTR), formerly known as MicroStrategy and one of the world's largest holders of bitcoin, soared nearly 10%.

Bitcoin was at $87,300 recently, up from $81,500 early in the day but down from the $95,000 level it hit yesterday following an announcement by Trump that a crypto strategic reserve would be created.

The yield on 10-year Treasurys, which tends to fall when economic conditions weaken, was at 4.24% in late trading, up from 4.18% at yesterday's close. The yield, which affects borrowing on all sorts of costs, notably mortgages, fell as low as 4.11% Tuesday morning, its lowest level since October.

Gold futures were up 0.9% at $2,930 an ounce, while West Texas Intermediate crude oil futures fell 0.5% to $68.05 per barrel.

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