S&P 500 Indices: Tech Selloff Deepens as Energy and Materials Struggle to Hold Gains

Wall Street Slips as Factory Orders Decline, Tariff Uncertainty Looms

Wall Street’s major indexes fell on Monday as weaker factory orders and concerns over upcoming tariffs weighed on investor sentiment. The Institute for Supply Management’s (ISM) February survey showed manufacturing remained stable, but new orders dropped significantly, raising fears of an economic slowdown. Traders also awaited details on U.S. tariffs on key trading partners, set to take effect soon.

Which Sectors Took the Hardest Hit?

Technology stocks led the losses, with the sector down 0.9%. Nvidia (NVDA.O) plunged over 6.0%, dragging down the broader chip industry. Meanwhile, cyclical sectors such as materials (-1.08%) and energy (-2.94%) also declined following weaker economic data.

On the upside, defensive stocks such as healthcare (+0.48%) and consumer staples (+0.62%) attracted buyers looking for stability. Real estate stocks also posted gains, rising 0.97%, benefiting from ongoing rate-cut speculation.

How Are Tariff Fears Impacting Markets?

With President Donald Trump expected to finalize new tariffs on Canada and Mexico by early Tuesday, investors are bracing for further trade disruptions. Additionally, Trump has threatened to impose an extra 10% duty on imports from China, which could provoke retaliation from Beijing.

As a result, U.S.-listed Chinese companies slumped, with Nio (NIO) falling 4.5% and JD.com (JD) losing 2.4%. Rising trade tensions have amplified fears that tariffs could push inflation higher, complicating the Federal Reserve’s decision on interest rate cuts.

Which Stocks Stood Out?

Despite broader weakness, Tesla (TSLA.O) jumped 3.1% after the opening after Morgan Stanley reinstated the EV maker as its “top pick” in the auto sector. However, the stock is now trading 2.50% lower as sentiment shifted.

Crypto-related stocks also rallied, with MicroStrategy (MSTR.O) climbing 3.7% and Coinbase (COIN.O) rising 1.9% after Trump proposed a reserve of digital assets.

In the semiconductor space, Intel (INTC.O) rose 3.6% on reports that Nvidia and Broadcom were testing manufacturing processes with the company.

What’s Next for Traders?

With economic policy uncertainty surging, markets remain on edge. Investors are closely watching this week’s employment data and business activity reports, which could influence the Fed’s rate outlook. Currently, traders are pricing in at least two 25-basis-point rate cuts by December, but that could change if inflation remains stubborn.

Markets will also react to any new developments on trade, particularly if China responds with countermeasures to U.S. tariffs. With volatility likely to persist, traders should stay alert for further policy shifts that could impact key sectors.

More Information in our Economic Calendar.