Investing.com - The S&P 500 closed sharply Thursday, pressured by the threat of fresh tariffs and a slide in Nvidia (NASDAQ: NVDA ) as concerns about the chipmaker’s margins overshadowed quarterly results and guidance that topped Wall Street estimates.

At 4.00 p.m. ET (21:00 GMT), the benchmark S&P 500 was 1.6% lower, and the tech-heavy Nasdaq Composite shed 2.8%, while the Dow Jones Industrial Average fell 192 points or 0.4%.

Nvidia’s softer-than-expected margins take center stage

Nvidia fell more than 8% weighing on the broader tech sector as its guidance for Q1 profit margins fell short of estimates, overshadowing Q4 results and revenue guidance for the current quarter that beat analyst expectations.

The semiconductor giant noted that its income margins had dropped due in part to an uptick in costs around its new data center gear and larger pay packages for its growing workforce.

Blackwell-related gross margin headwinds appear to be "more significant than originally anticipated," Deutsche Bank said. First-quarter gross margins of 71% is roughly 1% below Deutsche Bank’s and NVDA’s target of about 75%, which is "now expected to be achieved in ’late FY26 (DBe F4Q) vs. 2H FY26 in prior guide," it added.

Trump tariff comments in focus

President Trump said that his proposed 25% tariffs on Canada and Mexico goods would come into effect on Mar. 4 as scheduled, arguing that drugs are still entering the U.S. from those countries.

In a post on his Truth Social platform, Trump also added that China will face an additional 10% surcharge on Mar. 4, adding to the 10% tariff that was imposed on Feb. 4.

Soft guidance dents eBay shares

In individual stocks, shares in eBay (NASDAQ: EBAY ) plunged more than 8% after the e-commerce giant provided weaker-than-expected revenue guidance for the first quarter, overshadowing a fourth-quarter earnings beat.

Salesforce (NYSE: CRM ) shares fell nearly 4% after the software group unveiled a revenue outlook that came up short analyst estimates.

Bath & Body Works (NYSE: BBWI ) dropped 12% after the retailer issued a below-consensus forecast for its first quarter.

C3.ai Inc (NYSE: AI ) fell more than 9% even as the software company reported quarterly results that topped estimates on both the top and bottom lines.

Economic growth remains steady in Q4, jobless claims rise more than expected

The second reading of fourth-quarter GDP showed the economy grew a 2.3% in the prior quarter, unchanged from the first reading last month.

On the labor market, however,  jobless claims rose to 242,000 in the week ended Feb. 22, above expectations for 222,000 claims.

"[T]he data of recent weeks shows no sign of an inflection higher towards broader labor market weakness," Jefferies said in a recent note.

(Scott Kanowsky contributed to this report.)