U.S. stocks fell sharply on Wednesday, with the Dow Jones Industrial Average dropping 816.80 points, or 1.91%, to close at 41,860.44. The S&P 500 lost 1.61% to settle at 5,844.61, and the Nasdaq Composite declined 1.41% to finish at 18,872.64.
The sharp sell-off was driven by growing concerns over the U.S. federal budget deficit and a surge in Treasury yields. Investors were spooked by the new budget proposal, fearing it could worsen the fiscal outlook and increase long-term borrowing costs.
Nike shares fell more than 4% after reports that it would raise prices on some of its premium sneakers to absorb tariff-related expenses. The company confirmed that prices for kids’ products and Jordan shoes will remain unchanged.
Market breadth was notably weak, with nearly 88% of trading volume on the NYSE in declining stocks, and over 70% of Nasdaq trades in the red.
Phillips 66 fell almost 7% as Elliott Management, an activist investor, secured two seats on the company’s board. This could signal further operational changes at the refinery operator.
BlackRock launched a new actively managed ETF focused on defense stocks, reflecting growing global military spending. The iShares Defense Industrials Active ETF (IDEF) includes international holdings like France's Safran and Japan's Mitsubishi Heavy Industries.
In the tech sector, AMD remains under pressure, down 6% year-to-date. Despite this, some believe the stock remains undervalued in the context of AI-driven demand. Nvidia, meanwhile, has surged to a market cap of $3.35 trillion, now just $50 billion shy of overtaking Microsoft as the world’s most valuable company.
Among retailers, Target dropped nearly 5% after missing revenue estimates and cutting its full-year forecast. CEO Brian Cornell noted tariff uncertainty and shifting consumer behavior as key challenges. Conversely, Canada Goose shares soared 28% following better-than-expected fourth-quarter earnings.
Commodities also moved higher. Gold futures for June hit $3,322.5, while platinum reached its highest price in nearly a year. Natural gas and Bitcoin also posted strong gains, with Bitcoin crossing $109,000 for the first time.
Investors continue to face multiple macro headwinds, from uncertain trade negotiations to delays in expected Fed rate cuts. With elevated volatility, the path forward remains unclear.
