S&P 500, Nasdaq fall as Nvidia swings to red, economic data disappoints

The benchmark SP 500 and tech-heavy Nasdaq fell on Thursday, after Nvidia shares swung to losses as investors focused on signs of increased AI spending in the industry, and data suggested a cooling U.S. economy.

Nvidia gave up early gains and fell 2.7% – a contrast to outsized gains the stock witnessed after some of its earlier results announcements. The company forecast upbeat quarterly revenue but its first-quarter gross margin outlook was below expectations.

Fellow chipmakers Broadcom and Advanced Micro Devices fell and the broader chip index slid 2%.

Five of the SP 500’s 11 sectors traded lower, led by a 1.2%
decline in technology stocks.

Most megacaps fell, with Alphabet and Meta
, among Nvidia’s largest customers, dropping over 1%
each.

“At this point, there’s just an incredibly high bar (for
Nvidia) to clear to get a big outside-stock reaction,” said Ross
Mayfield, investment strategist at Baird.

The launch of low-cost AI models from China’s DeepSeek
in January cooled a two-year, tech-driven bull run on Wall
Street, with Nvidia losing half a trillion dollars in market
value in a single day. More recently, an analyst report
suggesting Microsoft was scrapping some data center leases also
raised concerns of overcapacity.

At 10:07 a.m. ET, the Dow Jones Industrial Average
rose 118.95 points, or 0.27%, to 43,552.07, the SP 500
lost 22.68 points, or 0.38%, to 5,933.38 and the Nasdaq
Composite lost 201.70 points, or 1.06%, to 18,873.56.

Dampening some risk-taking, data showed jobless claims
stood at 242,000, higher than estimates of 221,000.

The report comes on the heels of multiple data points
over the past week that suggested the economy was stalling,
fears of which have also put all three major U.S. indexes on
track for monthly declines.

“There has already been a bit of a growth scare in markets
after (business activity data) last week came in soft … so
this data is going to get a lot of attention,” Mayfield added.

Separately, economic growth slowed in the fourth quarter,
and the loss of momentum appears to have persisted early this
quarter.

In his latest threats on trade partners, U.S. President
Donald Trump floated a 25% “reciprocal” tariff on European cars
and other goods.

Additionally, Trump said that his proposed tariffs on Mexico
and Canada will go into effect on March 4 as scheduled.

Focus will now shift to the monthly Personal Consumption
Expenditure data, the Federal Reserve’s preferred inflation
gauge, due on Friday.

Traders expect the Fed to lower borrowing costs by at least
50 basis points by December, according to data compiled by LSEG,

Salesforce forecast fiscal 2026 revenue below
expectations, sending shares of the business software provider
down 4.1%.

Snowflake rose 9% after the data analytics provider
forecast fiscal 2026 product revenue above estimates.

Viatris slumped 15.7% after the drugmaker forecast
downbeat annual results, while Warner Bros Discovery
jumped 5.4% after saying it expects streaming profits to double
this year.

Declining issues outnumbered advancers by a 1.63-to-1 ratio
on the NYSE and by a 1.75-to-1 ratio on the Nasdaq.

The SP 500 posted 11 new 52-week highs and five new lows
while the Nasdaq Composite recorded 24 new highs and 120 new
lows.