Nvidia tumbles, Bitcoin drops, gold rallies and AI stocks face selling pressure

• Stock markets have declined sharply amid tariff concerns, raising fears of further selling pressure.
• Nvidia and AI stocks are struggling despite strong earnings, highlighting investors’ caution in tech.
• Bitcoin And gold show diverging trends, reflecting uncertainty and flight to safety.
  

Yesterday was rough for the stock market, with the Nasdaq leading declines, dropping nearly 2.8%. The S&P 500 and Russell 2000 also posted steep losses, both falling over 1.5%. And the Dow Jones Industrial Average fared slightly better, slipping just under 0.5%.

Heavy trading volume accompanied the sell-off, raising questions about whether today would bring further declines or a rebound.

Tariffs to take effect

The downturn began after President Trump announced the tariffs he had previously postponed for Canada, Mexico, and China would officially take effect on March 4.

Canada and Mexico will be hit with a 25% tariff, while China will see a 10% tariff added to the existing trade barriers. All three countries have vowed to retaliate with tariffs of their own, heightening fears of an escalating trade war with severe economic consequences.

The impact of the tariffs was not limited to U.S. markets because global stocks also faced significant declines in response to the news.

Quarterly earnings reports

Several major companies reported earnings overnight, adding to market volatility. Shares in Dell (DELL) were down 4% in premarket trading after the company warned that rising costs for artificial intelligence (AI) chips could pressure margins.

Meanwhile, stock in Nvidia (NVDA) has taken a heavy hit, down over 11.5% for the week. Despite strong earnings and an optimistic outlook, the chipmaker fell 8.5% yesterday and is down nearly 1% in premarket trading.

HP Inc. (HQ) also disappointed investors, dropping 3% premarket after issuing a weaker-than-expected outlook. However, not all earnings news was negative—

Monster Energy (MNST) surprised to the upside, with shares up 2% in premarket trading.

Bitcoin has also faced significant selling pressure, shedding approximately 25% of its value and dipping below $80,000 for the first time since November. The cryptocurrency initially rallied following President Trump’s election because his administration appeared favorable to the sector, but recent declines suggest a shift in sentiment among investors.

On the economic front

In economic news, the latest personal consumption expenditures (PCE) report aligned with expectations. Core PCE, which excludes food and energy, rose 2.6% year-over-year and 0.3% month-over-month. Add food and energy and PCE matched forecasts at 2.5% annually and 0.3% monthly. However, Personal Spending unexpectedly declined by 0.2%, despite projections of a 0.2% increase, potentially indicating growing consumer caution.

With the month coming to an end, the S&P 500 is on track for its worst performance since April. Gold prices have surged nearly 10% this year, while bonds have rallied, pushing interest rates lower—both signs of a flight to safety amid market uncertainty.

As tariffs threaten spur inflation and heighten economic instability, investors like Warren Buffett have increased cash reserves to reduce equity exposure. Looking ahead, volatility remains high, and traders may be hesitant to hold risk into the weekend.

As always, a disciplined, long-term investment approach is key in navigating market fluctuations.

JJ Kinahan is CEO of IG North America—which includes tastylive, tastytrade and IG's FX Business. Kinahan traded for 21 years at the Chicago Board Options Exchange. He serves on the CBOE Advisory Board and the SIFMA Options Committee. @thejjkinahan

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