US benchmark equity indexes experienced a noticeable decline Thursday, primarily driven by a post-earnings sell-off in Nvidia's shares as traders reacted to impending tariffs on imports from Mexico and Canada. The Nasdaq Composite tumbled by 2.8%, closing at 18,544.4, while the S&P 500 dipped by 1.6% to settle at 5,861.6.
The Dow Jones Industrial Average observed a slight decrease of 0.5%, finishing at 43,239.5. In sector performance, technology bore the brunt of the losses, posting the steepest declines, whereas energy stocks emerged as the primary gainers amidst the turmoil. In corporate earnings reports, Nvidia, a leader in the semiconductor industry, saw its shares plummet by 8.5%, marking the worst performance on the Dow for the day.
The chip manufacturing giant had released fourth-quarter results that surpassed expectations; however, a modest gain in revenue, deemed an underwhelming achievement for investors, led to uncertainties. As stated by analysts from Deutsche Bank, the report revealed only the smallest revenue beat in the last two years, disappointing traders who were anticipating larger upside surprises given Nvidia's historical performance. Meanwhile, Salesforce, the prominent customer relationship management platform, faced difficulties as its fiscal fourth-quarter revenue fell short of Wall Street's predictions, resulting in a 4% decline in its stock price, which was the second-largest drop on the Dow for Thursday. In contrast, Warner Bros.
Discovery, despite an unexpected widening in its fourth-quarter loss, managed to report an uptick in subscribers and a forecast of consistent growth in this segment. This positive outlook contributed to a surge of 4.8% in its share price, making it one of the leading gainers on the S&P 500 that day. Amidst these corporate developments, President Donald Trump confirmed that proposed 25% tariffs on imports from Mexico and Canada will be implemented starting Tuesday.
Additionally, China is set to face a supplementary 10% tariff effective on the same day. This announcement follows a month-long pause on the tariffs that were initially slated for February. Analyzing US Treasury yields, reports indicated a mixed performance, with the two-year yield decreasing by 2.3 basis points to 4.051%, while the 10-year yield gained 1.7 basis points, reaching 4.266%. From an economic perspective, the US real gross domestic product experienced a 2.3% annualized rate increase in the fourth quarter, aligning with expectations from the Bureau of Economic Analysis and market consensus compiled by Bloomberg.
Additionally, the BEA's latest report highlighted an uptick in inflation during the December quarter compared to previous estimates. Real estate metrics also displayed concerning trends as pending home sales in the US decreased more than anticipated last month, hitting an all-time low according to data provided by the National Association of Realtors.
Furthermore, weekly applications for unemployment insurance climbed higher than market forecasts, reaching their joint-highest level since December, according to government statistics. In commodity markets, West Texas Intermediate crude increased by 2.2%, settling at $70.11 per barrel. This rise in oil prices was attributed to fresh concerns surrounding supply, particularly following Trump's announcement to revoke Chevron's operating license in Venezuela, as noted by D.A.
Davidson. On the other hand, gold prices fell by 1.5% to $2,887.6 per troy ounce, with silver also declining by 2.2% to $31.85 per ounce..