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Stock market today: Dow sinks 650 points, S&P 500 wipes out post-election gains as Trump trade war intensifies

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Updated Tue, Mar 4, 2025, 1:10 PM 1 min read

The Dow Jones Industrial Average (^DJI) fell about 1.5%, or over 650 points, as losses escalated into the close, while the benchmark S&P 500 dropped around 1.2%. The tech-heavy Nasdaq Composite (^IXIC), which traded in the green at one point of the trading day, closed down about 0.4% but was able to avoid entering correction territory.

Stocks are retreating as markets assess the likely impact of Trump's broad tariffs on America’s top trading partners. The measures — fresh 25% tariffs on Canada and Mexico, and a doubling in China duties to 20% — were signed into effect at midnight ET on Tuesday.

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Canada hit back with a sweeping package of immediate tariffs on US imports, while China retaliated with additional 15% duties on US farm products such as chicken and pork, to come on March 10. Many saw Beijing's response as less aggressive than feared, leaving room for negotiation with Trump.

Target (TGT) warned that tariffs will put pressure on first quarter profit as it delivered an earnings beat before the bell. The retail giant's stock was little changed in early trading. Meanwhile, its sector peer Best Buy (BBY) put out a muted annual sales forecast alongside its own quarterly beat. The additional sign of consumer caution helped send its shares lower.

LIVE 17 updates

Flutter stock moves higher after fourth quarter earnings top forecasts

Flutter (FLUT) stock rose about 3% in after-hours trading after the comapany's fourth quarter earnings per share surpassed Wall Street's estimates while revenue came in just short of expectations.

For the quarter Flutter reported adjusted earnings per share of $2.94 on revenue of $3.79 billion. Wall Street had expected earnings per share of $1.73 on revenue of $3.83 billion.

"We've seen a strong start to 2025 including record levels of customer engagement for the Super Bowl, with almost half a billion dollars wages of the day and around 17,000 bets per minute at peak levels of engagement the Super Bowl," Flutter CEO Peter Jackson told Yahoo Finance.

Flutter issued more guidance in its US business for full-year 2025 roughly in line with Wall Street's expectations. The company expects US revenue to be in a range of $7.47 billion to $7.97 billion. Wall Street had projected revenue of $7.69 billion.

Broad concerns about a consumer spending slowdown have swirled recently but Jackson told Yahoo Finance that in prior economic downturns the gambling business has been "incredibly resilient" and he would expect a similar outcome should the macroeconomic scenario in the US worsen further.

"I'm very pleased with the momentum that we bought into the into the year, the performance we saw through the Super Bowl," Jackson said.
S&P 500 wipes post-election gains

The S&P 500 (^GSPC) wiped its post-election gains on Tuesday as stocks extended declines on the heels of fresh tariffs on Canada, Mexico, and China.

The Dow Jones Industrial Average (DJI) fell about 1.5% as losses escalated into the close, while the benchmark S&P 500 (GSPC) dropped around 1.2%. The tech-heavy Nasdaq Composite (IXIC), which traded in the green at one point of the trading day, closed down about 0.4% but avoided entering correction territory.

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The Trump trade is floundering

Trump-based euphoria has evaporated from the stock market as recent tariff escalations and disappointing data spark growth fears. Beyond the broader markets, certain sectors initially expected to perform well under a Trump administration have also lagged since the election.

Immediately following Trump's win, small caps surged, with the Russell 2000 (^RUT) outperforming the leading market indexes. But the rally was short-lived, and the index is now down about 8% since its Nov. 5 close.

Companies within the small-cap index, which include regional banks and smaller domestic players, were expected to benefit from anticipated policies from the Trump administration, such as lower taxes and deregulation. However, those policies have yet to materialize as tariffs remain the administration's current priority.

Meanwhile, sectors like Energy (XLE) and Industrials (XLI) also jumped in the aftermath of Trump's victory due to expectations of more M&A, a steeper yield curve, and less regulation. Both have fallen around 3%.

Financials (XLF) have been the lone exception, up about 7% since Nov. 5.

And bitcoin (BTC-USD), one of the biggest beneficiaries of the post-election rally, has perhaps lost the most momentum after first exceeding $100,000 a coin late last year. The largest cryptocurrency is now trading at around $85,000, down about 22% from an all-time high of just above $109,000 in mid-January.

Read more here.
Here's where gas prices will rise post-Trump tariffs

Yahoo Finance's Ines Ferré reports

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Intel drops 7% following TSMC's $100 billion US investment

Intel (INTC) stock sank 6% midday Tuesday, adding to Monday's 4% drop after its Taiwanese rival TSMC (TSM) joined President Trump at the White House to announce a $100 billion investment in its US manufacturing capabilities.

Intel stock had risen as much as 5.5% earlier in the day Monday on a Reuters report that AI chip designers Nvidia and Broadcom are testing its new manufacturing technology but sharply reversed direction following the TSMC announcement.

Intel began making chips for outside customers in 2021, and the storied chipmaker has positioned itself as the American alternative to foreign semiconductor manufacturers — namely TSMC — as the US pushes to bring back domestic chip production and maintain its lead in the emerging AI market. Analysts have widely argued that the US can better achieve its goal by incentivizing TSMC to expand US operations rather than betting on troubled Intel.

Intel shares had experienced a historic rally earlier in February on news that the US government was working on a deal with TSMC to aid the ailing chipmaker. Intel last week pushed back the deadline for its $28 billion Ohio chip factory to come online.
Financials lead sectors lower

It was a sea of red on Tuesday, with all 11 sectors in negative territory as Trump's tariff escalations wreaked havoc on Wall Street.

Financials (XLF) led the way lower, down 3%, followed by Consumer Discretionary (XLY) and Industrials (XLI), which declined 1.5% and 1.4%, respectively.

Within the tech sector, Nvidia shares (NVDA) rose 2% after falling nearly 9% on Monday. Alphabet shares (GOOG, GOOGL) also traded 2% higher while Meta (META) and Tesla (TSLA) continued to slide, down about 3% and 5%, respectively.
Yields plummet as market sell-off, growth fears encourage flight to safety

As stocks sell-off, investors are flocking to the bond market.

US Treasury yields are now trading at levels not seen since late last year as investors worry Trump's tariffs will hurt economic expansion and the labor market, potentially prompting the Federal Reserve to lower the cost of borrowing even as risks of higher prices remain tilted to the upside.

The 10-year yield (^TNX) has sunk over 63 basis points from its January high to trade at just around 4.15%.

But as Citi analyst Stuart Kaiser put it in a new note on Monday, "Rates are lower for the 'wrong' reasons."

Recent data has highlighted these growth concerns, marking the return of "bad news for the economy is bad news for stocks." On Monday, ISM Manufacturing prices paid came in at their highest since June 2022 while new orders fell into contraction, suggesting a "stagflationary" environment in which growth slows but price increases remain elevated.

Meanwhile, confidence plummeted in February, notching its biggest monthly decline in nearly four years as 12-month inflation expectations jumped and recession fears escalated. The latest consumer sentiment reading also highlighted greater concerns around tariffs and the impact those and other policies could have on inflation and the broader economy.

Traders now expect three rate cuts from the Federal Reserve this year, according to the CME FedWatch Tool.
Markets pricing in more Fed rate cuts 'is not a good thing' for markets

As weaker-than-expected data has spurred concerns about US economic growth, markets have moved to price in more easing from the Federal Reserve this year.

On Tuesday, traders were betting on three interest-rate cuts from the Fed in 2025, for the first time this year. Debate around when the Fed's next rate cut will come has intensified too. Markets now see a 50/50 chance the Fed lowers rates at its May meeting, per the CME FedWatch Tool. Just a week ago, they were pricing in a 75% chance the Fed would hold rates steady that month.

But stocks have slumped amid a shifting Fed narrative, and the S&P 500 (^GSPC) is now at its lowest level since before Donald Trump won the presidential election in November.

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While rate cuts could bring benefits like lower borrowing costs for corporates, Citi equity strategist Drew Pettit sounded a note of caution. He told Yahoo Finance that if soft economic data drives the Fed to ease monetary policy, markets won't welcome the news as they have in the past.

"'Fed cuts because of weak economic data' is not a good thing for markets anymore," Pettit said. "If we were talking about this two months ago, you know 'Fed cuts against a resilient backdrop' was good for markets."
The 'Trump bump' is gone as markets wipe out post-election gains

US markets have eliminated all their post-election gains as stocks deepen their sell-off with fresh tariffs on Canada, Mexico, and China now officially in effect.

The S&P 500 (^GSPC) has erased about $3.3 trillion in market cap since its record closing high of 6,144.15 on Feb. 19. At that time, the benchmark index's post-election gains had been hovering at just around 6%.

Since the start of 2025, the S&P 500 is down around 2% while the Nasdaq Composite (^IXIC) is off nearly 6% and is currently flirting with correction territory, on track to close 10% off its record high. The blue-chip Dow (^DJI) is trading just barely in the green for the year.

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Only a few months ago, stocks traded at consistent records as Donald Trump's presidential win fueled bullish Wall Street euphoria on hopes of pro-business policies and lower taxes.

Flash forward to today, and that euphoria has all but evaporated as Trump's tariffs spark growth fears while inflation remains stubbornly elevated.

"Many of the key trends in financial markets in the run-up to and immediate aftermath of the US election last November have stalled or partly reversed since President Trump took office last month," Jonas Goltermann, deputy chief markets economist at Capital Economics, wrote in a note last week.

"Since then, US Treasury yields have dropped back, the 2-10s curve has flattened, US equities have struggled both in absolute terms and relative to those elsewhere, and the dollar has dropped back," he said. "In other words, the 'Trump trade' narrative that dominated many markets in Q4 is floundering."
US stocks slide at the open

US stocks continued their sell-off on Tuesday as fresh tariffs on Canada, Mexico, and China officially went into effect at midnight.

The Dow Jones Industrial Average (^DJI) fell about 0.7%, while the benchmark S&P 500 (^GSPC) dropped 0.8%. The tech-heavy Nasdaq Composite (^IXIC) shed around 0.9%, as all three indexes took a leg lower.

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Treasury Secretary Bessent shrugs off tariff sell-off, says Wall Street isn’t the focus

US Treasury Secretary Scott Bessent argued that a market sell-off in response to new tariffs would be temporary, Bloomberg reports, though he acknowledged there may be a transition period as new duties on Canada, Mexico, and China take effect.

The Treasury Secretary's comments come after stocks plummeted Monday in response to the tariffs. On Tuesday morning, futures for Dow Jones Industrial Average futures (YM=F) fell 0.3%, while S&P 500 futures (ES=F) dropped 0.8%. Contracts on the tech-heavy Nasdaq 100 (NQ=F) shed nearly 1%.

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Bloomberg reports:

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US yield curve gets steeper as tariffs put growth at risk

The risk to global growth from Trump's tariffs is rattling bond investors, who appear increasingly convinced that the president is no longer just making threats as a precursor to a deal.

Traders also ramped up bets on the Federal Reserve making more interest-rate cuts than previously expected.

Bloomberg reports:

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Okta stock jumps on 'blowout quarter'

Shares of Okta jumped in premarket trading Tuesday after the identity and cybersecurity company reported solid sales, earnings, and 2025 profit guidance.

All three metrics beat Wall Street analysts' estimates as the company benefitted from increased corporate spending on cybersecurity protection amid the AI boom.

Okta stock rose 14% Tuesday morning and was a trending ticker on Yahoo Finance.

"This is a blowout quarter," Okta co-founder and CEO Todd McKinnon told Yahoo Finance's Brian Sozzi in an Opening Bid podcast exclusive. "It's reflective of big deals in the quarter," McKinnon said, pointing to a 25% surge in subscription backlog to more than $4 billion.

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Ignore the Target earnings beat

Target's (TGT) earnings just hit the wires.

And while the earnings beat will quickly grab your eyes, it's more important to lock in on this line from the release given all the risk around tariffs:

"In light of ongoing consumer uncertainty and a small decline in February net sales, combined with tariff uncertainty and the expected timing of certain costs within the fiscal year, the company expects to see meaningful year-over-year profit pressure in its first quarter relative to the remainder of the year," Target said.

Target declined to share specific first quarter earnings guidance. Yahoo Finance data shows Wall Street analysts were looking for a slight first quarter year-on-year earnings improvement.
Good morning. Here's what's happening today.
Xi leaves door open for talks with Trump

China's tit-for-tat move to Trump was to slap tariffs of up to 15% on US farm goods such as pork and beef, starting next week. That's going down generally well on Wall Street, which sees the targeted action as designed to avoid escalating a trade war between the world's top two economies.

Bloomberg reports:

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President Donald Trump's tariffs take effect

US President Donald Trump's plan for wide-ranging tariffs against Canada and Mexico has occurred with no further delays.

Yahoo Finance's Ben Werschkul reports:

Read more here.