NYSE Fluctuations & Trump Tariffs: Market Week in Review
Written by Nisarg Parekh
Volatile Week (NYSE)
To understand how the markets performed this week, it is a wise idea to look at a succinct, but diversified group of index funds and ETFs. For starters, the Vanguard S&P 500 (VOO) had an eventful week. After starting the month at $552, it fell to around $544 in the early hours of February 3rd. Despite this drop, it was able to recover and ended the week strong at $557.62, a 0.38% increase in value overall from the start of the week. Similarly, the NASDAQ 100 (QQQM) also had a volatile week. After staying relatively stable, it dramatically fell 4.20% from $218.35 to $209.50 by February 3rd. Despite the initial plummet, it was able to recover and got back up to $218.26 by the end of the week. This sort of volatility is quite common for the NASDAQ 100, which tracks some of the biggest technology and healthcare companies in the country. The same story unfolded for the Dow Jones industrial average (DIA), which tracks 30 of some of the most established and stable companies in the country, making volatility in its value quite uncommon. But after starting the week at around $448.50, it also took a fall on February 3rd to $438.63. Luckily, it was also able to recover and ended the week at around $447.50. Another popular index fund, Vanguard Small-Cap (VB), tracks around 1,000 small companies with high-growth potential. This fund also saw a volatile week but only ended with a 0.50% decrease in value. Finally, the Schwab US REIT ETF (SCHH) had a solid week, rising around 1% in total market value. This signaled a stable increase for the American real estate market, tracked by the SCHH.
Trump Tariffs
On February 1, 2025, President Donald Trump announced a bundle of new tariffs which were the prime catalyst for the volatility seen in the market. Imports from China saw an additional 10% increase in tariff rates while imports from Canada and Mexico saw an additional 25% increase. With global trade playing a massive factor in the functioning of today’s big companies, these tariffs directly impacted the stock market. For instance, the initial drops in the S&P 500, NASDAQ 100, and Dow Jones Industrial Average were all attributed to the increase in tariff rates. These funds all track a variety of industries, with technology, healthcare, and industrial works having the greatest representation. The tariffs on China had the most impact on technology companies, as they increased production costs for hardware and software made in China. Correspondingly, the tariffs on Canada and Mexico mostly affected the healthcare and industrial sectors. As these industries see a lot of resources being imported, the tariffs also raise production costs. High production costs for a company decrease the company’s profit turnover, leading to a decline in profits and value. This was the case for a vast amount of American companies listed on the NYSE, reflected in the initial dips in stock value. However, as stated previously, most companies were able to recover, as they adapted their supply chain, management, and financing structures to the new tariff rates.