Investors may want to blame politics and tariffs for technology stocks falling hard today. However, the tech sector enjoyed the hype around artificial intelligence for over two years. While Nvidia (NVDA) will grow faster than the market, its share price is not immune to a sell-off.
Nasdaq (QQQ) will perform worse than the broader market. Investors treat the index as a leading indicator of the health of the economy. Most notably, Apple (AAPL) fell last night by around 7% in reaction to the tariffs that are higher than expected. Markets expect global firms like Apple will face higher supply costs and reduced demand.
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Gold (GLD) will perform well, continuing its uptrend. The U.S. dollar is at risk of a correction as markets price in the risk of slower trade with the U.S. U.S. Treasury bill yields will fall as stock investors buy bonds instead.
Investors may want to avoid countries facing the highest tariff rates. China has a 34% tax, while Vietnam must deal with a 46% rate. South Korea is at 25% while Japan is at 24%.
U.S. trade partners will announce counter-tariffs next. Americans will need to pay for them. As the price of many goods rises, consumer spending will weaken measurably.
On Friday, the government will likely post a strong jobs report for March. However, this is the last good report. Job losses may mount as the economy weakens.
