#NewsAlert | Canada to impose 25% tariffs against C$155B of US goods (Agencies)#Canada #TrumpTariffs pic.twitter.com/4oUaZp0bxa
— ET NOW (@ETNOWlive) February 2, 2025
The White House’s plan to implement tariffs on Canadian, Mexican, and Chinese imports starting Saturday has caused stocks to give up earlier gains. The Dow Jones Industrial Average dropped 340 points, or 0.8%, while the S&P 500 and Nasdaq fell 0.5% and 0.3%, respectively. The negative turn followed White House press secretary Karoline Leavitt’s announcement about the imminent 25% and 10% tariffs on imports from Canada, Mexico, and China.
Stocks of major technology companies, particularly Apple and Nvidia, saw notable declines.
#NewsAlert | Donald Trump signs 25% tariffs on Canada, Mexico and 10% on China #TrumpTariffs pic.twitter.com/XKZIKPeb5Z
— ET NOW (@ETNOWlive) February 2, 2025
Nvidia’s struggles intensified as its market value plummeted by $553 billion over the week, a loss greater than the market capitalization of Novo Nordisk, Europe’s most valuable public company. Despite Nvidia’s downturn, the month’s performance was strong overall for the market, with the Dow and S&P posting their best January returns since 2019.
What happens if countries retaliate against the US tariffs with counter-tariffs? This from Bloomberg re President Trump’s Executive Orders relating to Canada, China and Mexico:
“The Republican’s orders also included retaliation clauses that would increase US tariffs if the…
— Mohamed A. El-Erian (@elerianm) February 2, 2025
Tariffs impact tech stock performance
Analysts noted the apparent contradiction in the broader market rising while Nvidia, a leading global tech company, faced substantial losses. Solita Marcelli, UBS Global Wealth Management’s chief investment officer for the Americas, mentioned, “We expect the greater efficiency from new, lower-cost algorithms to lead to increased economic productivity, which is supportive of the broader equity market.”
January saw mixed performances among stocks.
Constellation Energy led S&P returns with a 34% gain, followed by GE Aerospace (22%) and Meta (18%). On the downside, Edison International fell 31%, and Nvidia was the biggest mega-cap loser, dropping 9%. For the week, Royal Caribbean and IBM outperformed with gains of 15% and 14%, respectively.
In contrast, Nvidia continued its decline, paralleled by 15% drops in UPS and Deckers Brands. The market awaits the impact of the new tariffs and whether Nvidia can recover from DeepSeek-induced losses while adjusting to the evolving competitive landscape in AI technology.