The New York stock market closed mixed amid extreme volatility a day before U.S. President Donald Trump's announcement on reciprocating tariffs. Economic indicators heightening concerns over stagflation pressured investor sentiment, but the rally in technology stocks, fueled by bargain buying, supported the market.
On the 1st (Eastern Time), the Dow Jones Industrial Average, centered on blue-chip stocks, finished at 41,989.96, down 11.80 points (0.03%) from the previous session. The large-cap benchmark S&P 500 index increased by 21.22 points (0.38%) to close at 5,633.07, while the tech-focused Nasdaq Composite index rose by 150.60 points (0.87%) to end at 17,449.89.
All stocks in the 'Magnificent 7' (M7) closed higher that day. The gain percentages were as follows: Nvidia 1.63%, Microsoft 1.81%, Apple 0.48%, Alphabet 1.57%, Tesla 3.59%, Amazon 1%, and Meta 1.67%.
The pro-Trump cable news channel Newsmax continued its record surge for two consecutive days after going public on the New York Stock Exchange. Newsmax's stock price surged by 735% the previous day and skyrocketed by 179.01% that day.
Shares of healthcare product manufacturer Johnson & Johnson (J&J) fell by 7.59%, recording the worst performance among S&P 500 constituents. J&J's attempt to resolve thousands of consumer lawsuits related to talc, which sparked a cancer controversy, through a bankruptcy protection (Chapter 11) filing was thwarted, impacting its stock price.
The stock that followed J&J with the largest drop was Southwest Airlines, which declined by 5.93%. The investment bank Jefferies downgraded its investment opinion on Southwest Airlines from 'hold' to 'underperform,' while its ratings on American Airlines and Delta Airlines were downgraded from 'buy' to 'hold.'
By sector, among the 11 sectors that make up the S&P 500, 9 sectors including discretionary goods (1.14%), staple goods (0.28%), energy (0.58%), industrials (0.6%), materials (0.32%), real estate (0.09%), technology (0.95%), communication services (1.02%), and utilities (0.3%) saw gains, while two sectors—financials (0.16%) and healthcare (1.75%)—experienced declines.
The White House announced that President Trump will unveil his plan for reciprocating tariffs as scheduled at 4 p.m. on the 2nd in the White House Rose Garden, with the measure taking effect immediately. White House spokesperson Caroline Levitt noted regarding market volatility due to tariff concerns, 'Just like during Trump's first term, Wall Street will be fine.'
The Institute for Supply Management (ISM) reported that the manufacturing purchasing managers index (PMI) for March was 49.0, falling below both the market estimate (49.5) and the previous month’s figure (50.3). The manufacturing sector shifted back into contraction territory (below 50) for the first time in three months, dampening expectations for economic recovery.
The U.S. Department of Labor reported that February job openings totaled about 7.57 million, also falling short of the market expectation (7.63 million). Compared to the previous month (7.76 million), this represented a decrease of about 200,000, and compared to the same month last year (8.45 million), it suggested a significant freeze in the labor market.
Thomas Barkin, president of the Richmond Federal Reserve Bank, projected regarding President Trump's tariff policy, 'Some will be reflected in prices, and therefore inflation will occur.' He added, 'If demand decreases due to price increases, corporate revenues will decline, and companies that do not raise prices will see their margins decrease,' warning that 'tariffs could also impact the labor market.'
Meanwhile, Goldman Sachs raised the possibility of a U.S. recession from 20% to 35%, stating that the Federal Reserve might increase the number of interest rate cuts within the year.
The volatility index (VIX), as tracked by the Chicago Board Options Exchange (CBOE), indicated a decrease of 0.51 points (2.29%) to 21.77.