Nasdaq confirms correction as tariff worries weigh

The Nasdaq Composite IXIC confirmed on Thursday it has been in a correction since peaking last December, with losses fueled by worries about global trade and the pricey valuations of Wall Street's AI heavyweights.

With Thursday's 2.6% decline, the index was down a total of 10.4% from its record high close on December 16, meeting a widely used definition of a correction.

Worries about U.S. President Donald Trump's tariffs have deepened concerns about inflation and a slowing economy in recent weeks, hitting shares across Wall Street and pushing all three major indexes into negative territory for 2025.

U.S. stocks ended sharply lower on Thursday after Trump exempted goods from both Canada and Mexico for a month from tariffs he imposed this week, the latest twist in fast-shifting trade policy that has whipsawed financial markets and business leaders.

"The Trump bump for equities has now turned into the Trump slump. Equity markets continue to be in a risk-off mentality on the combination of market uncertainty and the overall mixed messages around tariffs emanating from Washington," said Gene Goldman, chief investment officer at Cetera Investment Management in El Segundo, California.

The Nasdaq's pullback also reflects mounting concerns about the valuations of Wall Street heavyweights that have been spending heavily to dominate AI technology, a key driver of market gains in recent years.

Shares of Nvidia NVDA and other chipmakers sank after Marvell Technology MRVL gave an in-line revenue forecast that left investors jittery about spending on AI infrastructure, the latest sign that optimism about the technology may be cooling on Wall Street.

As of Thursday's close, the S&P 500 SPX was down almost 7% from its record high close on February 19. The Dow Jones Industrial Average DJI was down over 5% from its December 4, 2024 record high close.