Tech pullback ends S&P 500 rally as crypto steals the show on Wall Street

Source Cryptopolitan

The S&P 500 dropped by 0.8% on Wednesday as tech stocks collapsed and traders reacted to renewed confusion over trade tariffs.

The Dow Jones Industrial Average was down by 42 points, or 0.1%, while the Nasdaq Composite, packed with tech stocks, lost nearly 1.7%. The market reaction came as investors tried to make sense of conflicting signals from President Donald Trump on his tariff strategy and prepared for potential new levies on autos.

According to Bloomberg News, Trump is expected to make a public statement on auto tariffs as early as Wednesday. The report, which cited unnamed individuals familiar with the matter, came ahead of the president’s previously announced April 2 launch date for reciprocal tariffs.

On Tuesday, Trump said the tariffs would probably be “more lenient than reciprocal,” a comment that pushed markets slightly higher at the time.

Tariff confusion slams tech while traders ditch growth stocks

Traders weren’t waiting around to see what Trump actually does. On Wednesday, Nvidia shares dropped more than 5.5%, Tesla lost around 5%, and Alphabet, Amazon, and Meta each fell by over 1%. That dragged the S&P 500 down and erased gains from earlier this week. Before the drop, the S&P 500 had climbed 1% since Monday, and the Nasdaq had gained the same. The Dow was up 1.3% week to date.

The decline followed an uptick in market confidence on Tuesday when reports said the tariffs might be delayed and narrower in scope. But that optimism got wiped out fast. Investors were also reacting to a consumer confidence report from the Conference Board, which showed Americans are now more pessimistic about income, jobs, and business conditions than they’ve been in over a decade.

Mark Hackett, who works as the chief market strategist at Nationwide, said that the S&P 500 had gained back nearly half of what it lost over the past month.

“The emotion of the market is calming following a tumultuous period … the collapse of technical indicators accompanying the recent market correction is showing signs of recovery,” Mark said.

That calm didn’t last.

Barclays made it clear they’re not convinced about where the market goes next. On Wednesday, the bank cut its 2025 S&P 500 forecast from 6,600 to 5,900, pointing to the risk of a real economic slowdown if tariffs go through. That new target now gives the benchmark index just a 0.3% upside from where it started the year. It’s also the lowest projection in CNBC Pro’s survey of market strategists.

Venu Krishna, a strategist at Barclays, said, “Our earlier base case did not include a direct impact of tariffs. But now, our hand is forced. And at least for the foreseeable future, I think it would be foolhardy not to take that seriously. For the next 6 months, the tariffs are not going to be settled right away … that’s the concern.”

Wall Street firms shift ratings as GameStop dives into crypto

As the traditional market slipped, crypto names did the opposite. Shares of GameStop jumped more than 16.5% in premarket trading after the company announced it would invest some of its corporate cash into bitcoin and U.S. dollar-pegged stablecoins.

The decision was made during a Tuesday board meeting, where executives unanimously approved the move. The company also said it may put future funds from debt and equity into crypto.

GameStop’s shift follows the strategy taken by MicroStrategy, now officially rebranded as Strategy, which has become the largest public holder of Bitcoin by loading up billions worth of the cryptocurrency over the past few years. GameStop appears to be following that same route as it tries to reposition itself on Wall Street.

Elsewhere, analysts were busy releasing updates on top names. Goldman Sachs maintained its buy rating on Disney, calling the company “a high-quality EPS compounder at an undemanding valuation.” The firm signaled confidence in Disney’s stock, especially given the ongoing recovery in its theme park and media segments.

Citi upgraded TotalEnergies from neutral to buy, saying it expects the company to benefit from falling equity risk premiums in Europe.

“We think the inherent value in European Energy sits as a key beneficiary of a lower equity-risk premium in Europe, and with TTE fast emerging as the premium-quality energy name through which to take benchmark weighting,” the firm said in its note.

Morgan Stanley didn’t change its stance on Dell, but reaffirmed its overweight rating. After meeting with the company’s COO and CFO, the firm said it believes Dell is still on track to lead in AI infrastructure, storage, and PCs.

“After spending time digging into key investor debates with DELL’s COO and CFO, we remain just as convinced that DELL can extend its leadership position in AI systems while rebuilding momentum in storage and PCs and controlling costs to deliver above-plan revenue and EPS growth,” analysts wrote.

Crypto also got more support from Rosenblatt, which said to keep buying the dip in Coinbase. The firm sees stablecoin laws coming in Q3 2025 and said Coinbase’s non-trading revenue streams are being underestimated by investors.

“With stablecoin legislation increasingly likely in 3Q25, we believe investors underestimate the potential of COIN’s non-trading revenue streams in this political environment and expect the stock to revalue higher as investors grow more comfortable with COIN’s business mix,” the firm wrote. They added that weakness tied to low trading volume should be seen as a chance to buy more.

On the healthcare side, Morgan Stanley also initiated coverage on Tenet Healthcare, labeling it overweight. The firm said Tenet is “well positioned to benefit from the secular shift toward outpatient and lower cost of care” as health providers continue to move away from traditional hospital models.

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Disclaimer: For information purposes only. Past performance is not indicative of future results.
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