Risk assets tumbled as a wave of bearish sentiment gripped markets, with escalating trade tensions, disappointing earnings and signs of economic fragility weighing on investor confidence.

President Donald Trump confirmed a 25% tariff on imports from Mexico and Canada, effective March 4, while also targeting European Union's goods including automobiles and imposing an additional 10% tariff on Chinese imports. 

The sweeping trade measures rattled markets, triggering broad-based sell-offs, with cryptocurrencies bearing the brunt of risk aversion. 

Though seeing a small uptick after it plunged below $80,000 in early Friday trading, Bitcoin BTC/USD is still entering a bear market after dropping more than 20% from its peak. Sentiment in the digital asset space worsened following a massive security breach at Bybit, where hackers stole $1.5 billion worth of Ethereum ETH/USD in one of the largest crypto heists in history.

The high-flying artificial intelligence sector took a hit as investors reassessed its lofty valuations. NVIDIA Corp. NVDA suffered steep losses after delivering earnings that, while stronger-than-expected, failed to astonish investors accustomed to impressive beats. The stock's sharp retreat dragged down peers Advanced Micro Devices Inc., Broadcom Inc., Qualcomm Inc. and Intel Corp., all of which saw declines.

Fresh cracks in economic data emerged, adding to investor anxiety. While the fourth-quarter gross domestic product remained unchanged at an annualized 2.3% growth rate, inflation metrics for the same quarter were revised higher.

In January, personal spending contracted by 0.2% on the month, marking the first negative reading since March 2023. The Personal Consumption Expenditure price index — Fed's favorite inflation gauge — came in at 2.5% as expected, remaining above the 2% target. 

Housing data also disappointed, with pending home sales plunging 4.6% in January to their lowest level on record. Elevated mortgage rates continued to strain affordability, further cooling demand in the housing market.

The labor market showed signs of softening, as weekly jobless claims jumped by 22,000 to 242,000, marking the highest level in over two months.

GM Boosts Dividends

General Motors Co. GM rewarded shareholders with a dividend hike and a fresh buyback plan. The automaker raised its quarterly dividend by three cents to 15 cents per share, effective with its next payout in April. GM also authorized a new $6 billion share repurchase program, including a $2 billion accelerated buyback initiative.

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