S&P500 and Nasdaq: CPI Relief Short-Lived as Tech Weakness Drives Stock Market Lower

Stocks Slide Late Thursday as Tariff Concerns and Tech Sell-Off Hit Sentiment

Equities pulled back sharply Thursday afternoon, retracing most of Wednesday’s tariff-driven gains. A 90-day delay on some of President Trump’s reciprocal duties offered only brief relief, as traders focused on the broader economic impact of elevated tariffs specifically targeting Chinese imports. By the late session, the S&P 500 was down 2.9%, the Nasdaq had lost 3.6%, and the Dow dropped 864 points, or 2.1%, as the early optimism faded fast.

Tech Rout Deepens with Tesla and Apple Leading Declines

The Technology sector led the decline, falling over 4%, pressured by a broad sell-off in megacaps. Tesla plunged 11% after multiple price target cuts from Wall Street analysts, while Apple dropped 7.2% and Nvidia lost 5.2%. The sharp reversal in the “Magnificent Seven” erased nearly all of Wednesday’s rebound. Microsoft and Meta also retreated, dragging on both the Nasdaq and S&P 500.

Communication Services was another major laggard, with Warner Bros. Discovery sliding 14% after China announced plans to limit Hollywood imports—further escalating trade tensions and raising concerns over content revenue from international markets.

Autos and Financials Recoil After Downgrades and Trade Fears

Auto stocks reversed sharply as the tariff overhang returned to focus. Stellantis dropped 13% after surging more than 18% in the previous session. Ford and General Motors fell over 5% and 6% respectively, following downgrades from Goldman Sachs and UBS, which cited rising tariff costs and demand risks.

Banks also fell sharply. Goldman Sachs and Citigroup both dropped over 7%, while Bank of America slid 5%. The SPDR S&P Bank ETF fell 7%, underlining the pressure on financials as traders weighed the implications of weaker loan demand and slower business activity tied to trade friction.

Energy Slumps While Defensive Plays Gain Traction

Energy was the worst-performing sector, down nearly 6% as traders grew cautious on global demand. Chevron declined 6.4%, and U.S. Steel lost 7% following Trump’s opposition to a foreign acquisition. Materials and Industrials also declined more than 2%.

In contrast, defensive pockets saw inflows. Consumer Staples rose 0.6%, supported by gains in Coca-Cola and Walmart, while Utilities held slightly positive. UnitedHealth led the Dow with a 3.8% jump, and McDonald’s climbed nearly 0.7% as investors rotated into names with more resilient earnings visibility.

Outlook: Earnings Take Center Stage as Inflation Reports Continue

A cooler-than-expected CPI report provided temporary relief on rate fears, but with PPI and the University of Michigan’s consumer sentiment data due Friday, inflation remains a near-term driver. That said, attention is turning toward corporate earnings, with several major banks reporting Friday morning.

Traders will be laser-focused on guidance, especially in sectors exposed to trade costs and consumer trends. Margin commentary, forward outlooks, and management tone will carry added weight as market sentiment stays fragile. The broader market’s next move may hinge less on macro headlines and more on whether companies can hold the line on profitability under rising input pressures.

More Information in our Economic Calendar.