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Tesla drops after bearish brokerage view, report says

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Kroger ( KR ) rises on upbeat annual sales forecast

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Weekly jobless claims stand at 221,000

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Indexes off: Dow 1.11%, S&P 500 1.29%, Nasdaq 1.51%

(Updates after market opens)

By Johann M Cherian and Sukriti Gupta

March 6 (Reuters) -

Wall Street's main indexes fell on Thursday, led by a

decline in chip stocks as Marvell's ( MRVL ) forecast fanned worries of

slowing demand for AI infrastructure, while worries about a

trade war unleashed by U.S. tariffs also weighed on sentiment.

Marvell ( MRVL ) fell 18.5% after the chipmaker forecast

first-quarter sales in line with analysts' average estimate,

which failed to excite investors who had expected stronger

AI-driven growth.

Peers Broadcom ( AVGO ) and Nvidia ( NVDA ) also fell,

pulling the broader chip index down over 3%. The broader

S&P 500 technology sector lost 1.7%.

Megacaps such as Microsoft ( MSFT ) and Meta

declined about 0.9% each.

Concerns about overspending and overcapacity in the U.S. AI

industry, in the face of China's cheaper DeepSeek models, paused

Wall Street's bull rally in January. The tech-heavy Nasdaq

is now down over 9% from its record high hit in

December.

At 9:53 a.m. ET, the Dow Jones Industrial Average

fell 478.37 points, or 1.11%, to 42,528.22, the S&P 500

lost 75.21 points, or 1.29%, to 5,767.42 and the Nasdaq

Composite lost 279.63 points, or 1.51%, to 18,273.10.

Financials fell 1.6%, with big banks such as Goldman

Sachs ( GS ) and Morgan Stanley ( MS ) down over 2.3% each.

On the trade front, President Donald Trump exempted

automakers that comply with existing free trade agreement and

sources said the negotiations were ongoing. However, Trump made

it clear that he was not calling off his trade war.

Automakers such as General Motors ( GM ) and Ford were

down 3.4% and 1.8%, respectively. Tesla fell 3.9%

following a report that brokerage Baird named the electric

carmaker a 'bearish fresh pick'.

Against the backdrop of trade uncertainty, U.S. stocks have

witnessed increased volatility over the past few sessions.

"We're still continuing to see headline risks from the

development of tariffs... and until we can get some clarity,

we're going to expect some volatility," said Charlie Ripley,

senior investment strategist at Allianz Investment Management.

The benchmark S&P 500 is close to levels seen during

Trump's election victory and the Russell 200 index has

fallen over 8% since early November. The domestically focused

index fell 1.3% on Thursday.

Multiple reports have suggested that tariff uncertainty has

resulted in individuals holding back on consumption and

corporate executives staying put on investment decisions,

sparking concerns of an impending economic slowdown as inflation

stays elevated.

Ripley added that company forecasts were coming in lighter

than expected probably because of the uncertain path ahead.

On the data front, the number of Americans filing new

applications for unemployment benefits fell more than expected

last week. Friday's key payrolls data will be crucial for

investors trying to gauge the economy's health.

Traders now see the Federal Reserve lowering borrowing costs

by 25 basis points for the first time this year in June,

according to data compiled by LSEG.

Comments from policymakers Patrick Harker and Raphael Bostic

and Governor Christopher Waller are due later in the day.

Kroger ( KR ) rose 4.6% after forecasting annual same-store

sales largely above estimates.

Declining issues outnumbered advancers by a 3.34-to-1 ratio

on the NYSE and by a 2.89-to-1 ratio on the Nasdaq.

The S&P 500 posted no new 52-week highs and three new

lows, while the Nasdaq Composite recorded 18 new highs and 73

new lows.