Nasdaq Falls Into Correction as Powell and Jobs Data Loom

The Nasdaq officially entered correction territory after falling 2.6% on Thursday, while the Dow and S&P 500 also declined amid market uncertainty over Trump's shifting trade policies. Investors are closely watching February’s nonfarm payrolls report, expected to show 160,000 job gains, and Fed Chair Jerome Powell’s speech, which could provide insight into future rate cuts. Meanwhile, global bond markets stabilized after Germany’s spending plans initially triggered a selloff, and Trump suspended newly imposed tariffs on Canada and Mexico.

Equities

The FTSE 100 fell 0.8% on Thursday, as rising bond yields weighed on equities and uncertainty over US trade tariffs added to market pressure. The FTSE 250 edged up 0.2%, supported by gains in some domestically focused stocks. Banking shares were among the biggest fallers, dropping 2.7% after a strong session on Wednesday.

UK gilt yields rose following a global bond selloff triggered by Germany’s fiscal spending plans, before easing later in the session. The UK construction sector contracted sharply, with the S&P Global/CIPS UK Construction Purchasing Managers' Index falling to 44.6, the lowest level since May 2020.

Melrose Industries saw the steepest decline among FTSE 100 stocks, falling 18.2% after the aerospace parts supplier forecast 2025 revenue below expectations. Admiral Group rose 5.2% after posting a record annual profit and confirming discussions to sell its US business. Schroders climbed 12.6% after the asset manager announced plans to cut £150 million in costs over three years. Reckitt Benckiser gained 2.1% as the Dettol maker reported a decline in fixed costs as a percentage of net revenue.

In the US, the Nasdaq fell 2.6%, confirming it has been in a correction since December. The S&P 500 dropped 1.8%, briefly dipping below its 200-day moving average, while the Dow lost 1%. Market sentiment remained cautious following mixed messages from the White House on trade policy. President Trump announced a temporary exemption from tariffs for goods from Canada and Mexico under the USMCA agreement, reversing an earlier decision to impose duties on a wide range of imports.

Tesla fell 5.6% after brokerage firm Baird issued a bearish note on the stock. Marvell slumped nearly 20% after its earnings report failed to meet investor expectations. Semiconductor stocks were broadly lower, with Broadcom and Nvidia contributing to a 4.5% drop in the sector index. General Motors lost 2.6%, while Ford slipped 0.4%. Kroger bucked the trend, rising 2% after forecasting annual same-store sales above estimates.

US weekly jobless claims stood at 221,000, with investors looking ahead to the nonfarm payrolls report for further clues on the labour market. The Federal Reserve is still expected to begin cutting interest rates in June, though policymakers remain cautious about inflation risks.

Forex & Commodities

The US dollar remained near a four-month low as concerns about economic growth persisted, with markets waiting for the nonfarm payrolls report. The dollar index fell 0.21% to 103.97, while the euro strengthened to $1.0815, gaining more than 4% this week, its biggest weekly rise since 2009. Sterling was little changed at $1.2888. The Japanese yen traded at 147.49 per dollar, close to a five-month high, as safe-haven demand increased and bets on a Bank of Japan rate hike grew. The Swiss franc hit a three-month peak at 0.8814, while the Canadian dollar and Mexican peso gained after Trump temporarily lifted tariffs on imports from both countries.

Gold remained steady at $2,911 an ounce and is up 1.7% this week as uncertainty over US trade policy increased demand for safe-haven assets. US gold futures edged down 0.3% to $2,918.80. The Federal Reserve’s stance on interest rates remains in focus, with Governor Christopher Waller stating he is against a rate cut in March but open to reductions later this year if inflation eases.

Oil prices rose on Friday but were set for their biggest weekly drop since October. Brent crude was up 0.72% at $69.96 a barrel, while WTI gained 0.71% to $66.83. However, both benchmarks are down nearly 5% this week amid uncertainty over US trade policy and concerns about an oversupplied market. OPEC+ announced it will proceed with an April production increase, adding 138,000 barrels per day, while the US is considering measures to limit Iran’s oil exports.