The market faced significant uncertainty as policy risks, sluggish growth data, and mixed tech earnings all weigh on investor sentiment. President Trump’s “2.0” agenda continues to create turmoil, with his latest announcement confirming that tariffs on goods from Canada and Mexico will take effect on March 4, accompanied by an extra 10% tariff on Chinese imports. In addition, Trump defended his planned tariffs on autos and even hinted at a 25% levy on EU imports, while affirming that the reciprocal tariff measures scheduled for April 2 remain in place. These aggressive trade measures have injected considerable volatility into the market, fueling fears of retaliatory actions and higher consumer prices.

At the same time, economic indicators are painting a sobering picture. Consumer confidence has plunged to its lowest point since 2021, January’s housing data fell short of expectations, and initial jobless claims have soared to their highest levels since October—signs that the labor market may be weakening. This slowdown is compounded by recent reports that DOGE job cuts are starting to show up in the data, adding another layer of concern about overall economic growth.

In the technology sector, even strong underlying fundamentals in artificial intelligence have not been enough to sustain investor enthusiasm. Despite a robust earnings report, Nvidia’s stock took a hit as the earnings beat and subsequent guidance failed to fully address near-term concerns over potential gross margin compression from its Blackwell ramp. Analyst commentary regarding Microsoft canceling leases for data center capacity has further fueled worries about an emerging AI capex bubble.

On the fiscal side, political uncertainty continues to add to the market’s woes. Senate Republicans have raised critical questions about the House-passed budget resolution, particularly the absence of a permanent extension for the TCJA and proposed cuts to Medicaid. There is also mounting scrutiny over DOGE savings claims, which appear to be significantly overstated and may be contributing to the lower yield backdrop.

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