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U.S. stocks opened lower, weighed down by tariff fears and chipmaker Marvell Technology’s lukewarm revenue forecast which reignited concerns about artificial intelligence spending.
Marvell Technology topped analysts’ estimates for the final months of 2024. It also issued guidance for the first three months of the year that was mostly in line with expectations, but some had hoped for more. The company also flagged a slowdown in part of its data-center business. Shares tumbled more than 19%. Other chip stocks like ON Semiconductor, Taiwan Semiconductor and Nvidia also slid.
Outside of Marvell, investors also remained skittish over President Donald Trump‘s tariffs. Trump levied a 25% tax on Mexican and Canadian goods, which sent stocks on a two-day plunge.
However, Trump delayed on Wednesday by a month his tariff on automakers whose cars comply with the United States-Mexico-Canada Agreement. That brought hopes Trump could provide further exemptions, and stocks rebounded.
Trump, however, said his tariff plans will otherwise continue. Canada said it would retaliate with 25% tariffs and Mexico said it would announce its tit-for-tat measures on Sunday.
Around 9:43 a.m. ET, the broad S&P 500 index fell 1.49%, or 86.92 points, to 5,755.71; the blue-chip Dow lost 1.22%, or 522.98 points, to 42,483.61; and the tech-heavy Nasdaq dropped 1.,86%, or 345.97 points, to 18,206.77. The benchmark 10-year yield inched up to 4.282%.
Economic worries
Many economists fear a trade war would fan inflation that remains stuck above the Federal Reserve’s 2% target. If the economy continues to slow at the same time, some economists say “stagflation,” which is a sluggish economy with high inflation could set in. The Atlanta GDPNow forecast, which is a running estimate of real economic growth based on available economic data, currently shows the economy contracting in the first three months of the year.
Paul Ashworth, chief North America economist, says he believes a first-quarter contraction would mostly be due to the unseasonably severe winter weather and the pre-tariff surge in imports, both of which will be reversed in the following quarter.
The bigger concern, he said, is consumer spending. With confidence falling, Americans may be loathe to keep spending amid economic uncertainty.
“Rather than front-running tariffs by bringing forward big-ticket purchases, consumers are instead pulling in their horns and opting to boost precautionary saving ahead of what they expect to be another damaging episode of high inflation undermining their future purchasing power,” Ashworth said.
This is why, he said, economists will be watching all economic data closely, starting with Friday’s key monthly jobs report.
Eonomists expect 160,000 new jobs in February, up from 143,000 in the prior month, according to FactSet’s consensus estimates. The unemployment rate is expected to remain steady at 4.0%, while hourly earnings growth is expected to fall to 0.3% in February from 0.5% in January.
Before the opening bell on Thursday, data showed productivity jumped while labor costs growth cooled. That’s “good news,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management.
“In order for the economy, Fed and stock market to thread the needle, it’s critical that productivity pick up because higher labor costs (pushing inflation higher) or a slowing labor market (threatening the economic expansion) are the twin enemies of the market right now,” he wrote in a note.
Corporate news
- Macy’s reported disappointing quarterly results, and shares of the retailer slid 1.88%.
- Veeva Systems’s quarterly results and outlook topped analysts’ estimates. Shares of the cloud-solutions company climbed 8.11%.
-  Kroger posted lower-than-expected quarterly sales, and gave disappointing 2025 guidance. Still, shares of the supermarket chain rose 4.26%.
- MongoDB’s full-year view outlook fell below analysts’ estimates. The company has seen the slowest revenue growth since going public in 2017. Shares tumbled 22.1%.
- ON Semiconductor offered to buy Allegro Microsystems for $35.10 per share in cash. Allegro said the offer was too low. Shares of Allegro jumped 5.56% but ON slumped 5.29%.Â
- Zscaler’s quarterly results beat analysts’ forecasts in the company’s fiscal second quarter. Shares of the cloud security company rose 5.1%.
- Victoria Secret beat earnings expectations in the final months of the year, but its revenue outlook for the first three months of the year missed. Shares of the lingerie retailer fell 8.28%.
- Chinese e-commerce company Alibaba unveiled its latest AI model as it takes aim at DeepSeek, which rocked markets earlier with its competitive AI model built on a budget. Its shares rose 1.86%.
Cryptocurrency
Commerce Secretary Howard Lutnick said in an interview Trump will unveil plans for his strategic bitcoin reserve during the White House inaugural crypto summit this Friday. He suggested bitcoin would have the most prominent role in the reserve.
Still, bitcoin was last down 1.37% at $89,402.53.
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.