Stock Markets Tumble on Trump Tariffs as Tech Rebounds Lift Nasdaq

Nasdaq, S&P 500, Dow Sink as Trump Tariffs Shock Equities

Indices Struggle Under Trade War Pressures

The Dow Jones Industrial Average (DJIA) closed down 116 points at 39,190, extending its two-day slide of over 520 points, while the S&P 500 (SPX) hovered just below breakeven at 6,175, and the Nasdaq Composite (IXIC) held steady at 18,045, largely supported by gains in megacap tech. The catalyst: President Donald Trump’s August 1 tariff enforcement, targeting 14 countries with levies of 25% to 40%, sparking fears of cascading inflation and margin erosion.

NVIDIA, Tesla Lift Nasdaq Amid Macro Tensions

NVIDIA (NASDAQ:NVDA) gained 0.8% to $159.05, approaching a $4 trillion market cap, recovering from Monday’s 0.7% dip. The rebound followed renewed institutional accumulation and bullish AI infrastructure bets. Tesla (NASDAQ:TSLA) rose 1% to $219.77, rebounding after Monday’s 6.1% drop, which was triggered by CEO Elon Musk's political ambitions unsettling investors.

JPMorgan, Bank of America, Goldman Sachs Hit by HSBC Downgrade

Large-cap bank stocks faced aggressive selling. JPMorgan Chase (NYSE:JPM) closed down 2.1% to $198.34, Bank of America (NYSE:BAC) dropped 2.3% to $36.48, and Goldman Sachs (NYSE:GS) slipped 1.2% to $397.12 after HSBC issued a downgrade, citing earnings risk from rate cuts and margin compression. Wolfe Research warned the new tariffs could hit both input costs and CPI, amplifying pressure on Fed decision-making.

Clean Energy, Cloud Stocks Slide as Subsidy Rollbacks Loom

Sunrun (NASDAQ:RUN) fell 3.4% to $14.98, First Solar (NASDAQ:FSLR) declined 2.6% to $179.40, and Enphase Energy (NASDAQ:ENPH) dropped 2.9% to $116.02 following Trump’s order to eliminate clean energy subsidies. Datadog (NASDAQ:DDOG) plunged 2.1% to $112.50 after Guggenheim downgraded the stock due to risks tied to OpenAI dependency. In contrast, Amazon (NASDAQ:AMZN) climbed 0.4% to $219.77 as its four-day Prime Day event kicked off.

Inflation Outlook Clouds Fed Path

With tariffs now formalized, analysts at Capital Economics anticipate CPI acceleration in Q3, complicating the Fed’s roadmap. Futures markets now show just a 34% probability of a rate cut by November 2025, down from 56% last week, reinforcing expectations that core inflation may reaccelerate above 3.0%.

Oppenheimer Sees Cyclicals Leading Recovery

Despite near-term jitters, Oppenheimer Asset Management reiterated bullish positioning on cyclicals, especially in industrials, consumer discretionary, and financials. “Corporate earnings resilience will power valuations once Fed clarity returns,” wrote CIO John Stoltzfus. Their overweight basket includes Caterpillar (NYSE:CAT), Delta Air Lines (NYSE:DAL), and Lowe’s (NYSE:LOW).

Piper Sandler Flags SMID-Cap Rotation Play

Breadth is improving as small- and mid-cap equities show renewed strength. The Russell 2000 advanced 0.5% to 2,025, with Piper Sandler forecasting continued rotation into under-owned growth names. “We believe SMID-caps offer upside surprise potential in H2 2025,” they said.

Insider Trades: BSE Cracks, J&K Bank Accumulated

BSE Ltd. tumbled over 13% this week after SEBI disclosures tied to Jane Street’s derivatives manipulation case. Conversely, Jammu & Kashmir Bank (NSE:J&KBANK) gained 3.3% to ₹114.95, after famed investor Mukul Agrawal disclosed a 1.27% stake, suggesting value-driven accumulation in regional banking amid macro uncertainty.

Asia Markets React Cautiously to U.S. Escalation

While Wall Street remained pressured, Asia-Pacific indices held steady. Japan’s Nikkei 225 rose 0.26% to 39,688.81, South Korea’s Kospi jumped 1.81% to 3,114.95, and Hang Seng added 1.09% to 24,148.07, as traders bet Trump’s tariff threats could still be politically negotiable.

Valuation Calls Split: Goldman Lifts S&P Target, HSBC Warns

Goldman Sachs upgraded its S&P 500 12-month forecast to 6,900 from 6,100, citing consistent EPS beats and margin stability. Meanwhile, HSBC expressed concern that valuation multiples have detached from macro fundamentals, especially amid sticky inflation and geopolitical overhang.

Verdict: Hold Dow & S&P 500, Cautious Buy on Nasdaq

Market sentiment is bifurcated. The S&P 500 and Dow face structural resistance from inflation and trade disruptions, warranting a Hold. The Nasdaq, led by rebounding tech like NVDA, AMZN, and META, gets a Cautious Buy, supported by defensible earnings, global demand tailwinds, and capital inflows into AI infrastructure.

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