Bubble about to burst? Wall Street stocks keep sliding amid tariff uncertainty, here's all you need to know

US stocks dropped sharply on Thursday as investors and businesses faced growing uncertainty over President Donald Trump’s trade policies, particularly his plans for tariffs. Earlier in the day, Trump announced a nearly one-month delay on tariffs for all products from Mexico covered by the USMCA free trade agreement. This marked a significant shift from his earlier stance and added to the confusion surrounding his administration’s trade strategy.

Will Canada receive a reprieve?

Commerce Secretary Howard Lutnick had hinted at this delay during a CNBC interview, suggesting that Canada might also receive a similar reprieve. While stocks initially opened lower, they briefly recovered some losses after Lutnick’s comments but fell again following Trump’s official announcement.

By mid-afternoon, the Dow Jones Industrial Average was down 600 points, or 1.42%, while the S&P 500 dropped 2.1%, and the Nasdaq Composite fell 2.9%. This decline put the Dow on track for its worst week since March 2023, with a weekly loss of over 3%. The market has struggled during Trump’s presidency, partly due to the unpredictability of his trade policies. Since Trump took office, the Nasdaq has fallen more than 7%, and the S&P 500 is down over 4%.

More unease in labor market?

Investors are also worried about recent economic data showing a surge in layoffs and concerns about spending on artificial intelligence. According to a report by Challenger, Gray & Christmas, U.S. employers announced plans to cut 172,017 jobs in February, a 103% increase from January and the highest February total since 2009. This news added to the unease in the labor market, causing Dow futures to tumble in early trading.

The combination of trade policy uncertainty, rising job cuts, and concerns about AI spending has created a challenging environment for investors. The market’s volatility reflects broader anxieties about the economy’s direction under the current administration. As businesses and investors try to navigate these uncertainties, the stock market’s performance remains shaky, highlighting the impact of political decisions on economic stability. The coming weeks will be crucial as investors watch for further developments in trade policy and economic indicators to gauge the market’s future trajectory.