Wall Street is experiencing a significant pullback today, particularly due to growing fears of an economic slowdown amidst ongoing trade tensions. The Nasdaq is already in a market correction, down more than 10% over the past month, and the S&P 500 could follow into correction territory shortly.
As of noon today:
- S&P 500 is down 115.73 points (-2.00%)
- Nasdaq Composite is down 579.14 points (-3.20%)
- Dow Jones Industrial Average is down 483.53 points (-1.13%)
The technology sector is particularly affected, with major companies like Nvidia, Apple, and Microsoft seeing substantial declines. Tesla’s stock has notably fallen by nearly 9%, marking a 50% drop from its all-time high.
President Donald Trump’s recent imposition of 25% tariffs on imports from Mexico and Canada, along with increased tariffs on Chinese goods, has heightened concerns about an economic downturn. When asked about the possibility of a recession, President Trump stated, “There is a period of transition… It takes a little time, but I think it should be great for us.” Well, it hasn’t been good to investors, and it looks like it could be getting worse. Goldman Sachs revised its 2025 growth forecast, now projecting a 1.7% increase over 2024, down from the previous estimate of 2.2% growth.
Wall Street’s “fear index,” which is actually the CBOE Volatility Index, rose 3 points today, bringing the index to 13, which is the highest level since mid-December.
AppLovin Not Feeling All That Much Love Today
AppLovin‘s (APP) meteoric rise the past year has been cooling off fast, down 35% in the past month. This downturn is attributed to bearish reports from short-sellers and a broader selloff in momentum stocks.
Despite these challenges, Citi analyst Jason Bazinet maintains a Buy rating with a $600 price target, suggesting a potential 136% upside. Bazinet notes that peer multiples imply the market is assigning a 50% chance that AppLovin’s equity is worthless, but he remains encouraged by the company’s solid fundamentals, including its e-commerce pilot generating approximately $100 million in Q4 2024. Additionally, Bazinet anticipates up to $1.2 billion in stock buybacks using free cash flow in 2025.
Tesla Stock Cooling Way Down
Shares of Tesla (TSLA) are down 11.23%, effectively erasing the substantial gains accrued post-President Donald Trump’s re-election. The downturn in Tesla’s shares was further exacerbated by UBS analyst Joseph Spak’s revision of the company’s 2025 vehicle delivery forecast, reducing it by 5%. This adjustment contradicts the prevailing analyst consensus, which anticipates a 12% growth in vehicle deliveries for the year.
More Nasdaq Sell-Offs
MicroStrategy‘s stock (MSTR) has fallen by approximately 13% today, primarily due to a decline in Bitcoin’s value, which has decreased by 11.5% over the past week. This drop aligns with MicroStrategy’s significant Bitcoin holdings; the company’s stock often mirrors Bitcoin’s performance. Additionally, MicroStrategy’s recent announcement of plans to raise $21 billion through preferred stock offerings to purchase more Bitcoin has contributed to investor concerns, especially as Bitcoin’s price continues to decline.
Similarly, Palantir‘s stock (PLTR) has experienced a 6.5% decrease today. Despite positive news, such as Voyager Technologies expanding its use of Palantir’s AI software, investors are likely concerned about the broader stock market downturn, which can impact high-valuation stocks like Palantir. With a price-to-sales ratio exceeding 72 and a price-to-earnings ratio around 447, Palantir’s stock is considered expensive, prompting some investors to sell to lock in profits.
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