What a wild week it’s been for the DJIA! It concluded with a painful 1.7% drop, nearly 700 points. The decline is mainly due to a sharp fall in tech stock. At the same time, frustrations are fueled by increasing worries about tariff impacts stemming from new U.S. trade policies. Due to this, the index has posted two consecutive red days, mirroring an overall theme of uncertainty in the market.
On Wednesday, the DJIA dropped 10% or over 2400 points. As in previous months, this drop was primarily propelled by the tech sector, still reeling from the impacts of these ongoing tariff discussions. In fact, since the announcement of President Donald Trump’s “reciprocal” tariffs on April 2, the DJIA has already dropped some 5.6%. This fluidity around these tariffs has further compounded an already volatile market and caused investors to become cautious.
Just this month alone the DJIA has announced a loss of nearly 6% – potentially the start of a seriously worrisome trend for investors. Tariffs, particularly on auto parts, have worsened the economic strain on the index. At the same time, concern over blanket export controls are mounting – especially among technology firms that rely on semiconductor-led innovation and advancement. The stakes are even higher now. A separate quarterly charge of $5.5 billion that is attributable to the export of H20 graphics processing units (GPUs) to China and other markets.
The market’s volatility follows a pause announced late last week, as tariffs on China increased with alarming speed. Financial analyst Peter Boockvar calls this a “dangerous mix” that leaves the economy on “very weak knees.” Analysts agree with this feeling, pointing out the tenuousness of our currently expanded financial system.
“I think the economy is on very weak knees right now.” – Peter Boockvar
Furthermore, Federal Reserve Chair Jerome Powell noted that the ongoing uncertainty is “likely to move us further away from our goals,” hinting at potential challenges in achieving economic stability amidst fluctuating market conditions.