In a notable turn of events, US benchmark equity indexes experienced a downturn on Thursday as the markets processed the implications of potential 25% tariffs on Mexico and Canada, set to take effect next week. The Nasdaq Composite saw a significant drop of 2.8%, closing at 18,544, while the S&P 500 registered a decline of 1.6%, ending the day at 5,861.
The Dow Jones Industrial Average fell by 0.5%, finishing at 43,239. Notably, among various sectors, technology emerged as the steepest decliner, whereas financials managed to lead the gainers despite the overall market setback. In the realm of interest rates, US Treasury yields showed a mixed performance.
The 10-year rate increased by 2 basis points to reach 4.27%, whereas the two-year rate witnessed a slight decline, dropping 1.1 basis points to 4.06%. Turning to the energy sector, April West Texas Intermediate crude oil prices advanced by 2.2%, rising to $70.12 per barrel on Thursday. From an economic perspective, the latest report from the US Department of Labor revealed a rise in weekly initial jobless claims, which increased to 242,000 in the third week of February, marking a 22,000 rise compared to the previous week.
Weekly applications for unemployment insurance surpassed market expectations of 221,000, with the four-week moving average climbing by 8,500 to reach 224,000. On the macroeconomic front, real GDP growth in the US decelerated to 2.3% during the fourth quarter, down from 3.1% in the third quarter. This slowdown was attributed to gains in consumer and government spending being partially offset by decreased investment, according to the second estimate released by the Bureau of Economic Analysis.
For the entire year, GDP displayed a growth of 2.8%, supported by robust increases in spending, investment, government expenditures, and exports. In the corporate landscape, Warner Bros. Discovery saw a notable uptick of over 5.6% following a significant multi-year global licensing agreement with Mattel for DC stories and characters through its Global Consumer Products division. Conversely, Teleflex experienced a staggering drop of 22% after announcing its acquisition of a significant portion of Biotronik's Vascular Intervention business for approximately 760 million euros, or $793.1 million, in cash.
Furthermore, Teleflex disclosed plans to spin off its urology, acute care, and OEM segments into a publicly traded company. Another notable stock movement involved Nvidia, with shares falling 8%. According to Deutsche Bank's report, the company's fiscal Q4 results released on Wednesday reflected 'the smallest revenue beat in two years,' which appeared underwhelming for investors who had anticipated larger upside surprises. Payoneer witnessed a decline of 14% as its core earnings outlook for 2025 projected a year-over-year decline, signaling potential challenges ahead. Finally, precious metals experienced declines, with gold prices reducing by 1.6%, settling at $2,885.2 per troy ounce, while silver prices dropped 2.4%, ending at $31.81 per troy ounce..