On Thursday, US benchmark equity indexes experienced a notable retreat as ongoing trade tensions continued to exert pressure on the markets, coinciding with the anticipation of the upcoming official jobs data for February. The Nasdaq Composite saw a significant slide of 2.6%, settling at 18,069.3, while the S&P 500 declined by 1.8% to reach 5,738.5.
Meanwhile, the Dow Jones Industrial Average dropped 1% to stand at 42,579.1. Excluding the energy sector, all sectors faced declines, prominently led by consumer discretionary. In a bid to address some of the trade issues, the White House announced temporary tariff exemptions for goods from Canada and Mexico that comply with the provisions of a North American trade pact.
This announcement comes in the wake of the US administration's recent decision to double its tariff levies on Chinese imports, while both Canada and China are reportedly gearing up to implement retaliatory measures. Government data released on Thursday highlighted a staggering 34% increase in the US trade deficit in January, a surge fueled by a notable rise in imports. In more economic news, February registered the highest monthly total of job cuts in the US since July 2020, primarily driven by reductions in the government workforce.
This information was disclosed by Challenger Gray & Christmas in their latest report. The senior vice president of the firm, Andrew Challenger, commented: "With the impact of the Department of Government Efficiency actions, as well as canceled government contracts, fear of trade wars, and bankruptcies, job cuts soared in February." Looking forward, the Bureau of Labor Statistics is anticipated to release a report on Friday indicating that the US economy added approximately 160,000 nonfarm jobs last month, reflecting a rise from the 143,000 job gain recorded in January.
A Bloomberg-compiled survey supports this expectation. Additionally, weekly applications for unemployment insurance in the US showed a reduction that exceeded expectations, while continuing claims increased according to government data disclosed on Thursday. Despite this, data from recent weeks do not signal any signs of an impending broader weakness in the labor market, even when accounting for seasonal volatility, as noted by Jefferies. In the bond market, US Treasury yields displayed a mixed performance on Thursday.
The 10-year yield rose by 1.5 basis points to 4.282%, whereas the two-year yield fell by 1.7 basis points to rest at 3.969%. In company-specific news, shares of MongoDB ($MDB) plummeted by 27% following the software maker's release of a downbeat outlook for its full-year financial performance late Wednesday.
Streaming giant Netflix ($NFLX) experienced a decline of 8.5%, making it one of the largest drop-offs on the S&P 500. Conversely, shares of Burlington Stores ($BURL) surged by 8.7% after the off-price retailer released fiscal fourth-quarter results that surpassed expectations and suggested that the existing economic uncertainty might favor discount retailers.
Meanwhile, Kroger's ($KR) fiscal fourth-quarter earnings were reported to be ahead of market estimates, yet revenue fell short of forecasts, prompting the supermarket chain to project a full-year profit outlook below Wall Street's expectations. Notably, Kroger's shares managed to increase by 2%. In commodity trading, West Texas Intermediate crude oil saw a slight dip of 0.1%, priced at $66.26 a barrel.
Gold prices decreased by 0.3%, settling at $2,918.80 per troy ounce, while silver gained 0.2%, reaching $33.20 per ounce..