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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 0.29%, S&P 500 0.79%, Nasdaq 1.08%

(Updates with mid-session trading)

By Johann M Cherian and Sukriti Gupta

March 6 (Reuters) -

Wall Street's main indexes traded off session lows on

Thursday after a cabinet official hinted that the U.S. could

take a softer stance on tariffs, while chip stocks declined as

investors were disappointed by Marvell's ( MRVL ) forecast.

Commerce Secretary Howard Lutnick said in an interview

that Donald Trump is

likely to extend

the one-month reprieve on tariffs on imports from Mexico

and Canada to all products under a free trade pact, from what

was previously granted only to automotive products.

However, worries that the president could alter his

stance continued to dominate sentiment at a time when the U.S.

trade deficit widened to a

record high

in January.

Tariff-sensitive automakers General Motors ( GM ) and

Ford were down about 1.1% each. Tesla fell 4%

following a report that brokerage Baird named the electric

carmaker a 'bearish fresh pick'.

"The uncertainty created by rapidly shifting policy

pronouncements can damage investment in particular and hurt the

economy," said Bill Sterling, global strategist at GW&K

Investment Management.

"And the other thing that investors are concerned about

is the size of the tariffs. This is way beyond what was

experienced in 2018 and could raise inflation."

At 11:36 a.m. ET, the Dow Jones Industrial Average

fell 123.69 points, or 0.29%, to 42,882.90, the S&P 500

lost 46.15 points, or 0.79%, to 5,796.48 and the Nasdaq

Composite lost 201.23 points, or 1.08%, to 18,352.61.

Real estate stocks led sectoral declines and

banks lost 1.6%.

The benchmark S&P 500 is close to levels seen

during Trump's election victory and the Russell 2000 index

has fallen over 7.5% since early November. The

domestically focused index fell 0.6% on Thursday.

Marvell ( MRVL ) fell 17.6% 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 1.3%.

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 about 8.8% from its record high hit in

December.

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.

Philadelphia Fed President Patrick Harker said that trouble

may be brewing for a economy that is currently in good shape but

showing signs of stress in the consumer sector and risks to the

inflation outlook.

Comments from policymakers Raphael Bostic and Governor

Christopher Waller are due later in the day.

Kroger ( KR ) rose 4% after forecasting annual same-store

sales largely above estimates.

Declining issues outnumbered advancers by a 1.9-to-1 ratio

on the NYSE and by a 1.66-to-1 ratio on the Nasdaq.

The S&P 500 posted one new 52-week high and five new

lows, while the Nasdaq Composite recorded 21 new highs and 99

new lows.