Stan Choe, AP Business Writer
NEW YORK (AP) — Backdown Goes Wall Street, and its former superstar, are leading the way again on Tuesday.
The S&P 500 is down 1% in afternoon trading. This is the latest shaking of a scary ride that has recovered for two consecutive days, down 10% from record. The Dow Jones industrial average fell 245 points (0.6%) as of 1:52pm east time, with the Nasdaq Composite down 1.5%.
Tesla was one of the heaviest weights on the market after a 4.6% drop. The electric vehicle maker’s stocks struggle with worrying about losing sales due to the rage of CEO Elon Musk, who has led efforts to cut spending by the US government. Meanwhile, EV rivals continue to remove their business. China’s BYD announced on Monday its ultra-fast charging system, which is said to be about as fast as filling gasoline.
Alphabet sank 2.5% after Google’s owner said it would buy cybersecurity company Wiz for $32 billion. This is the company’s most expensive purchase in its 26-year history and could boost the tech giant’s in-house cloud computing amid the burgeoning growth of artificial intelligence.
The decline in Big Tech continues to have a steady trend with recent sales in the market. Stocks that seemed unstoppable to stop momentum fell sharply after criticism that they simply became expensive.
The main one of them is stocks that have grown higher in frenzy around AI technology. Nvidia fell by 2%. The super microcomputer making a server lost 3.9%. Palantir Technologies, a customer-facing AI platform, has sunk 2.8%.
These stocks are among the biggest losers as Wall Street is being taken away amid uncertainty about what the Donald Trump trade war will do to the economy. Trump Rats – Announcements about tariffs and other policies have created concerns that US households and businesses can curb spending and hurt the economy.
It all makes the Federal Reserve calculus, which is launching the latest meeting of interest rates, different and is set to be announced on Wednesday.
The Fed could cut key interest rates, which would make it easier for US businesses and households to borrow. It could in turn boost the economy. However, lower interest rates could push inflation upwards, and US consumers have already begun to dress up for higher inflation due to tariffs.
Virtually everyone on Wall Street is hoping the Fed will stabilize its key interest rates on Wednesday. At least for now, the job market appears to be relatively stable after last year’s economy ran at a steady pace.
More attention has been paid to the forecasts the Fed will publish after the meeting, indicating that officials hope that interest rates, inflation and the economy will be at the forefront over the next few years. For now, Wall Street traders are primarily hoping that the Fed will offer two or three cuts to the rates by the end of this year.
According to Barclays strategists, the recent weeks of US stock market sales have been “order so far” and may be due to faith that the Fed can protect Wall Street as the epicenter remains within the tech. If conditions deteriorate rapidly, the Fed could cut interest rates to support the economy.
According to a strategist at Barclays, led by Venu Krishna, such faith can be “tested this week” if the Fed appears to be more interested in inflation than intensifying the economy, at least compared to market expectations.
In overseas stock markets, indexes rose in most parts of Europe and Asia. They’ve been doing much better than the US stock market this year, forcing questions about whether an end has come to what’s called “US exceptionalism.”
Japan’s Nikkei 225 rose 1.2%. Investors hope that the Bank of Japan will not change its benchmark interest rates at its Monetary Policy Committee meeting to close on Wednesday.
Trading on the Indonesian stock exchange was temporarily suspended after benchmark JSX fell by 6%. However, it later reduced the loss to 3.8%.
Investors have dropped shares in state-owned banks that have so far not proven popular after the government launched a sovereign wealth fund called Danantara. Budi Frencidi, a professor at the University of Indonesia, said concerns and other risks about US tariffs and other risks are also shaking confidence in the economy of the fourth most populous country in the world.
In the bond market, the 10-year U.S. Treasury bond yields fell from 4.31% to 4.28% in the second half of Monday.
Associated writers Matt Ott, Yuri Kageyama and Niniek Karmini contributed to this report.
Original issue: March 18, 2025, 11:14am EDT
