US Stock Market Plunges on Trade Uncertainty and Tech Sector Woes

On May 6, 2025, the US stock market experienced significant declines driven by several key factors. The Dow Jones Industrial Average dropped by 389.83 points, or 0.95 percent, while the S&P 500 fell by 0.77 percent. The Nasdaq Composite also dipped, declining by 0.87 percent.The market's downward trend was largely influenced by the ongoing uncertainty surrounding President Donald Trump's tariffs and their potential impact on trade and corporate profits. Despite a recent recovery from losses incurred after Trump's early-April tariff announcement, investors remain cautious about the future of trade policies.Palantir Technologies was one of the most notable decliners, with its shares falling more than 10 percent despite reporting earnings that met analysts' expectations and raising its full-year revenue forecast. This drop was attributed to concerns over international growth and the company's high software multiple making it vulnerable to revenue growth slowdowns.Other significant movers included Constellation Energy, which fell 4 percent after its earnings release. The technology sector, particularly companies involved in AI, saw substantial declines as the AI mania on Wall Street began to lose steam.Investors are closely watching the two-day Federal Reserve meeting that began today, although no changes in interest rates are expected. Fed Chair Jerome Powell's comments on Wednesday regarding the economic outlook and the impact of tariffs will be closely monitored.In terms of market-moving news, the ongoing trade war and its effects on companies continue to be a major concern. The yield on the ten-year Treasury note remained unchanged at 4.34 percent, and the US dollar index fell by 0.3 percent to 99.55.Looking forward, pre-market futures indicated further declines, with futures tied to the Dow Jones Industrial Average down by 0.7 percent, the S&P 500 down by 0.9 percent, and the Nasdaq down by 1.1 percent. Key events to watch include Powell's remarks on Wednesday and upcoming earnings releases from various companies. The market will also be sensitive to any developments in trade negotiations and their potential impact on the economy.This content was created in partnership and with the help of Artificial Intelligence AI