- Nasdaq composite sinks 10% from peak, worst weekly loss since 2022
- S&P 500 sheds 1.8% as tariff reprieve fails to calm investors
- AI sector loses $450B valuation in 72-hour market rout
Wall Street suffered its third consecutive day of heavy losses Thursday as conflicting trade policy signals collided with a dramatic tech sector retreat. The Nasdaq's 2.6% decline pushed the tech-heavy index into correction territory, erasing $1.2 trillion in market value from artificial intelligence leaders since Monday. Analysts attribute the sell-off to growing skepticism about political solutions to the US-China tariff standoff, combined with profit-taking in overvalued AI stocks.
The White House's latest tariff delay announcement backfired spectacularly, with the S&P 500 closing 1.8% lower despite the proposed relief measures. Market strategists note that temporary solutions are exacerbating long-term uncertainty, particularly for multinational corporations facing 18-22% increases in supply chain costs. Semiconductor manufacturers and EV producers saw particularly heavy losses, with the Philadelphia Semiconductor Index dropping 3.9% in afternoon trading.
Three critical industry developments are reshaping market dynamics:
- Midwestern manufacturers report 14% Q1 inventory surplus due to shipping delays
- Institutional investors shift $12B into defensive healthcare and utilities stocks
- Federal Reserve officials signal possible rate cut pause at March meeting
A regional case study from Silicon Valley reveals the human impact of the AI slump. Local employment platforms report a 37% increase in tech worker resumes since Tuesday, with machine learning specialists now accepting 12-15% lower base salaries compared to Q4 2024. Venture capital firms have frozen $2.8B in planned AI startup funding this week alone, redirecting capital toward cybersecurity and quantum computing initiatives.
Year-to-date performance metrics paint a grim picture for growth stocks. The Russell 2000's 7.3% annual decline suggests small businesses are bearing the brunt of tightened credit conditions. Meanwhile, the Dow's marginal 0.1% gain underscores the flight to blue-chip safety, with consumer staples giants Procter & Gamble and Coca-Cola outperforming the broader market by 6.8 percentage points since January.