[New York Stock Market Briefing] Investor sentiment drops due to Trump's inconsistency... Nvidia and Tesla plunge over 5%

Nvidia plunges over 5%... market cap falls below $2.7 trillion

Semiconductor stocks fall across the board... Tesla also drops over 5%

The three major stock indices in the New York stock market plunged. Although U.S. President Donald Trump officially decided to postpone the 25% tariff on many imports from Canada and Mexico for about a month, investor sentiment appears to be more contracted. This is interpreted as amplified concerns that uncertainty surrounding the Trump administration's tariff policy will continue.

On the 6th (local time), the Dow Jones Industrial Average closed at 42,579.08, down 427.51 points (0.99%) from the previous day on the New York Stock Exchange (NYSE). The Standard & Poor's (S&P) 500 index closed at 5,738.52, down 104.11 points (1.78%) from the previous day, and the Nasdaq Composite index finished at 18,069.26, down 483.48 points (2.61%).

Sang-young Seo, a researcher at Mirae Asset Securities, analyzed, "Although Trump postponed tariffs on Canada before the market close following Mexico, the market fell due to political uncertainty combined with economic instability. The sharp decline in the semiconductor sector, including Marvell Tech and Nvidia falling about 20% and 6% respectively, as well as the poor performance of individual stocks such as Tesla (05.61%), also affected investor sentiment negatively."

On this day, Trump signed an executive order exempting items covered by the United States-Mexico-Canada Agreement (USMCA) from the 25% tariff until April 2. This expands the exemption coverage following the previous day's inclusion of Mexican and Canadian automobiles in the one-month tariff exemption.

Trump suggested that he would continue negotiations with Mexico and Canada on drug distribution sanctions until April 2, when mutual tariffs will take effect.

However, investors responded to this news with selling. This is interpreted as investors feeling anxious about Trump's policy direction being too variable rather than the fact that tariffs were postponed.

There are concerns that uncertainty will remain as policies could easily be reversed depending on Trump's judgment in the future. Keith Lerner, chief market strategist at Truist, said, "It's just confusing," adding, "That confusion is seeping into the market's everyday volatility."

Meanwhile, concerns about economic recession are expanding. Patrick Harker, president of the Federal Reserve Bank of Philadelphia, assessed, "While unemployment remains low and economic growth continues, there are threats to this. Confidence is beginning to weaken among both consumers and businesses." He expressed concern, saying, "Although inflation is gradually slowing down, that slowdown is currently at risk. I still expect the downward trend in inflation to continue, but that outlook is also under threat."

By stock, all of the 'Magnificent 7' referring to seven giant tech companies declined. Nvidia fell 5.74%, with its market capitalization falling below $2.7 trillion.

Tesla also dropped 5.61%, recording a seven-week consecutive decline. Amazon and Meta Platforms also fell by around 4%.

Artificial intelligence (AI) and semiconductor-related stocks also showed widespread weakness.

The Philadelphia Semiconductor Index plunged more than 4%, with all but two of the 30 stocks that make up the index declining. Marvell Technology's stock plunged 20% as its earnings forecast fell short of expectations despite its Q4 results meeting or exceeding Wall Street estimates. TSMC, Broadcom, ASML, and Arm also recorded declines of 3-6%.

Min-kyung Shin, Hankyung.com reporter radio@hankyung.com