Dow slips 1,700 points, while S&P sheds Wednesday's gains; big tech, bank stocks see steep declines

Stocks declined on Thursday, reversing half of the previous session's historic gains, as investors responded to US President Donald Trump's 90-day reprieve on some "reciprocal" tariffs with concern that economic activity will still be slowed by the higher rates imposed on China.

At the time of writing, the Dow Jones Industrial Average slipped by more than 1,700 points, while the S&P 500 slumped over 5%.

The Nasdaq Composite fell nearly 6% from the previous close. 

Apple and Tesla experienced the most significant declines on Thursday, retreating more than 6% and 10% respectively.

NVIDIA and Meta Platforms also saw losses, falling 7.3% and 6.9% respectively.

The White House confirmed to CNBC on Thursday that the new 125% duty on Chinese goods, combined with the existing 20% tariff related to the fentanyl crisis, will result in a total tariff rate of 145% on products from China.

Following a historic surge on Wall Street, where the S&P 500, the Dow, and the Nasdaq saw significant gains in the previous session, the market slumped on Thursday once again. 

Trump's announcement of a temporary 90-day tariff rate reduction to 10% for most countries spurred a market rally. 

The European Union responded with a similar 90-day pause on US goods, while Canada and Mexico were exempted from the additional 10% duty.

“If there had been any doubt previously, the real target of President Trump’s tariffs is now apparent,” said David Morrison, senior market analyst at Trade Nation. 

Morrison said:

Bank stocks slip

Bank stocks experienced significant declines during Thursday's market downturn. 

The SPDR S&P Bank ETF (KBE) and the SPDR S&P Regional Banking ETF (KRE) both fell by 8%, exceeding the S&P 500's 5% drop.

Several banking stocks experienced declines during the session. Western Alliance Bancorp saw the most significant drop, falling over 12%. 

Webster Financial and Voya Financial also experienced substantial losses, dropping 11.6% and 10.1%, respectively. 

Additionally, major financial institutions, including Goldman Sachs, JPMorgan, Wells Fargo, Morgan Stanley, and Citigroup, all saw their stock prices fall.

The energy sector sees steep losses

The S&P 500's energy sector has been hit hard, falling over 5% due to oil's continued sell-off amidst uncertainty surrounding Trump's trade war. 

Occidental Petroleum and Devon Energy tumbled over 10% and 12% respectively, while oil majors Exxon and Chevron fell over 7%. Refiner Phillips 66 was down almost 4%.

US crude oil has dropped nearly 5%, falling below $60 per barrel and giving up most gains from Wednesday's relief rally following Trump's decision to delay tariff increases for most countries.

Traders are now focused on the escalating US-China trade war, with Trump raising tariffs on the world's largest crude importer to 145%.

Big tech falters

Following President Trump's announcement of a temporary halt on certain reciprocal tariffs, major technology stocks, often referred to as megacap tech stocks, took a downturn after experiencing significant gains in the previous trading session. 

This announcement led to a shift in market sentiment, causing investors to re-evaluate their positions.

Tesla, the electric vehicle manufacturer, saw its stock price slide by over 10%. 

This decline was further fueled by several Wall Street firms lowering their price targets on the company. 

This adjustment in price targets reflects a more cautious outlook on Tesla's future performance, potentially impacting investor confidence.

Similarly, NVIDIA experienced a drop of more than 7% in its stock price. 

This decline can be attributed to the broader market pullback in the technology sector, as well as the potential impact of the tariff announcement on NVIDIA's supply chain and global operations.

While the temporary pause on tariffs may provide some relief in the short term, the long-term implications for the technology sector remain uncertain, leading to increased volatility and investor caution.