Dow Futures Tumble on Trump’s Tariff, CoreWeave Plunges

Here’s a rewritten and expanded version of the provided article, focusing on clarity, engagement, and comprehensive coverage of the key points.

Market Overview and Futures Trading

Overnight trading saw a slight dip in Dow Jones, S&P 500, and Nasdaq futures. This downturn occurred in the wake of President Trump’s announcement of a 35% tariff on Canadian goods, with potential tariffs targeting the European Union on the horizon. While overnight futures trading can offer insights, it’s important to remember that they don’t always accurately predict the direction of the regular stock market session.

Thursday’s Market Performance: A Mixed Bag

The stock market demonstrated resilience on Thursday, overcoming initial losses to close modestly higher. Both the S&P 500 and Nasdaq reached new all-time highs. However, beneath the surface of these overall gains, many growth stocks experienced significant declines.

Key Stock Movements and Sector Performance

• Growth Stock Struggles: Several growth-oriented stocks faced headwinds. CoreWeave (CRWV), an Nvidia-backed IPO, saw a notable price decrease. Cybersecurity and software companies like Rubrik (RBRK) and Palo Alto Networks (PANW) also had a challenging day.

• Tech Giants Shine: Nvidia (NVDA) bucked the trend, closing above a $4 trillion market capitalization. Advanced Micro Devices (AMD) also showed strength, signaling a potential new entry point for investors.

• Other Notable Movers: Delta Air Lines (DAL) experienced a significant gap up after strong earnings reports and positive guidance. 3M (MMM), Millrose Properties (MRP), and Boot Barn (BOOT) all broke out.

Trump’s Tariffs: A Source of Market Uncertainty

President Trump announced a 35% tariff on Canadian goods, effective August 1st. While Canada had previously been exempt from certain tariffs, it already faces duties on various goods. Reports suggest that exemptions will remain for Canadian goods under the U.S.-Mexico-Canada Agreement. Trade talks with Canada had previously stalled over a digital service tax.

The President also indicated plans to issue a tariff letter for the European Union. Beyond Canada and the EU, Trump has floated the idea of a 50% tariff against Brazil due to the trial of former President Jair Bolsonaro. Furthermore, he is considering raising the baseline tariff from 10% to 15%-20%.

Market Reaction to Tariffs: A History of Volatility

The initial announcement of tariffs in April triggered a market downturn. However, the market has since appeared to absorb revised duties, possibly due to increased familiarity with the concept of high tariffs or expectations of future deals or delays. Historically, Trump has sometimes delayed or modified tariffs in response to market sell-offs.

Inflation Concerns

There is growing concern that existing tariffs could contribute to inflation, and new tariff increases could exacerbate these concerns.

Index Performance in Detail

• Dow Jones Industrial Average: Rose 0.4%.
• S&P 500 Index: Climbed 0.3%, reaching a new high.
• Nasdaq Composite: Edged up 0.1%, also reaching a new high.
• Russell 2000 (Small-Cap): Advanced 0.5%.

The Invesco S&P 500 Equal Weight ETF (RSP) outperformed the standard S&P 500, gaining 0.6% to reach a 2025 high. Conversely, the First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) dipped 0.3%. The Innovator IBD 50 ETF (FFTY) slumped 1.9% after an initial rise, marking its fifth downside reversal in recent sessions.

Commodities and Treasury Yields

U.S. crude oil prices fell 2.65% to $66.57 per barrel. The 10-year Treasury yield edged up to 4.35%.

ETF Performance

• Software: The iShares Expanded Tech-Software Sector ETF (IGV) slumped 2%.
• Semiconductors: The VanEck Vectors Semiconductor ETF (SMH) gained 0.7%, driven by Nvidia and AMD.
• Innovation: The ARK Innovation ETF (ARKK) rose 1.6%, while the ARK Genomics ETF (ARKG) edged up 0.2%.
• Materials: The SPDR S&P Metals & Mining ETF (XME) jumped 5.3%.
• Airlines: The U.S. Global Jets ETF (JETS) soared 7.3%.
• Homebuilders: The SPDR S&P Homebuilders ETF (XHB) was up 1%.
• Energy: The Energy Select SPDR ETF (XLE) rose 0.8%.
• Other Sectors: The Health Care Select Sector SPDR Fund (XLV), Industrial Select Sector SPDR Fund (XLI), and Financial Select Sector SPDR ETF (XLF) all climbed 0.6%.

Individual Stock Analysis

• CoreWeave (CRWV): The AI compute provider, backed by Nvidia, tumbled 9.6%, breaking below its 21-day moving average.

• Advanced Micro Devices (AMD): AMD stock popped 4.15% to 144.16 after HSBC doubled its price target to $200, citing the company’s AI chip pipeline.

• Nvidia (NVDA): Nvidia stock edged up 0.75% to a fresh high, closing with a $4.004 trillion valuation. CEO Jensen Huang met with President Trump and is scheduled to meet with Chinese officials.

• Delta Air Lines (DAL): Gapped up 12% after strong earnings.

• 3M (MMM): Rose 0.9% to 157.32, topping a 136.35 buy point.

• Boot Barn (BOOT): Advanced 2.9% to 173.36, above a 170.16 buy point.

• Millrose Properties (MRP): Gained 1.9% to 29.50, clearing a 28.99 buy point.

Investment Strategy and Outlook

The stock market rally continues to reach record highs, but the current environment presents challenges for growth stock investors. Many growth stocks are experiencing volatility, making it crucial to have well-defined exit strategies.

Investors with significant market exposure should exercise caution when considering new growth stock purchases. Opportunities may exist in other sectors such as aerospace, industrials, and materials. Diversifying leadership can mitigate potential downside risks. It’s recommended to include a wide variety of stocks outside of traditional tech growth names on your watchlist. As earnings season progresses, staying informed about market direction and leading stocks and sectors is essential.