S&P 500 volatile after President Trump’s tariffs confirmation; shares of NVIDIA and EBay fall

The S&P 500 experienced volatility and was little changed, influenced by President Donald Trump’s announcement to proceed with tariffs on Canada and Mexico. 

At the time of writing, the S&P 500 index was flat from the previous change at 5,956.25 points, while the Dow Jones was up nearly 1%. The Nasdaq Composite was down 0.3%. 

Trump announced on Truth Social that the proposed 25% tariffs on Mexico and Canada will be implemented on March 4, following a one-month moratorium. 

He asserted that both countries have failed to adequately reduce the flow of drugs across the border. 

Additionally, Trump stated that China, which currently faces 10% tariffs from the US, will be subject to an additional 10% levy.

“There is growing concern over President Donald Trump’s tariff threats,” David Morrison, senior market analyst at Trade Nation said. 

So far, the only tariff in effect is the additional 10% on Chinese goods.

NVIDIA shares fall

Nvidia’s share price dropped despite the chipmaker surpassing fourth-quarter expectations in both revenue and earnings. 

The AI-focused company also provided optimistic guidance, indicating sustained demand fueled by the AI race. 

Concerns were raised, however, due to a decline in gross margins for the quarter and the company’s smallest revenue beat in two years. 

This has led to questions about the sustainability of the bull market leader’s momentum.

“Nvidia earnings were outstanding, but they come during an extremely jittery stock market,” James Demmert, chief investment officer at Main Street Research, told CNBC.

At the time of writing, the stock was down more than 3% from the previous close. 

Jobless claims jump

Market sentiment was also dampened by a surge in US jobless claims, which added to recent worries of an economic slowdown. 

On Thursday, the Labor Department reported that jobless claims for the week ending February 22 totaled 242,000, up 22,000 from the previous week’s revised level and exceeding estimates of around 225,000.

This report follows a string of other recent economic data that has shaken stocks and raised concerns about the health of the US economy. 

These included weaker-than-expected consumer confidence, retail sales, and consumer sentiment readings.

The Federal Reserve’s preferred inflation gauge, the personal consumption expenditures price index, will be released on Friday and is the next item on traders’ radars.

EBay plunges

EBay’s stock experienced a significant drop of nearly 8% following the release of their first-quarter revenue guidance, which fell short of analyst expectations. 

The company projected revenue between $2.52 billion and $2.56 billion, while analysts at LSEG had anticipated a figure of $2.59 billion. 

This disappointing forecast overshadowed the company’s fourth-quarter results, which had actually surpassed estimates.

This news likely disappointed investors who were hoping for stronger guidance from the e-commerce giant. 

The shortfall in revenue projections could be attributed to a variety of factors, such as increased competition, changes in consumer spending habits, or macroeconomic headwinds. 

It’s also possible that eBay is being cautious with its guidance in light of ongoing uncertainties in the global economic environment.

Jefferies upgrade Freeport-McMoRan

Jefferies, a global investment banking firm, has recently revised its rating for Freeport-McMoRan, a leading international mining company, to a “buy” from its previous “hold” rating. 

This upgrade comes with a price target of $48 for Freeport-McMoRan’s stock, indicating a potential upside of more than 26% from its current trading price.

This positive outlook represents a significant shift in Jefferies’ stance on the copper producer, as the firm had downgraded Freeport-McMoRan to a “hold” just last month. 

The reversal is primarily attributed to the belief that the trade policies implemented by the Trump administration, particularly the tariffs on imported goods, could have a favorable impact on Freeport-McMoRan’s business in the foreseeable future.

Despite the recent positive rating by Jefferies, Freeport-McMoRan’s stock performance has been relatively flat over the past 12 months, with only fractional changes in its trading price. 

However, the new price target and “buy” rating suggest that Jefferies anticipates a significant increase in the company’s stock value in the coming period.