Market News 23 feb
Markets at a Crossroads: Volatility, Profit-Taking, and New Challenges
Last week, stock markets experienced increased volatility, accompanied by a correction in growth stocks, particularly in the technology and artificial intelligence sectors. The S&P 500 ($SPX) reached a new all-time high of 6147 points; however, by the end of the week, investors began taking profits, leading to a decline in prices.
Markets were closed on Monday in observance of Presidents' Day.
During the week, the S&P 500 reached a new record high.
By Friday, the index corrected due to decreasing buying interest.
Profit-taking, concerns about overvaluations, and a loss of momentum among growth leaders were the main drivers of the correction. Market sentiment cooled, sparking discussions about a potential short-term peak.
Economic Indicators and Market Impact
Macroeconomic data released during the week did not inspire confidence among investors:
The February Services PMI fell below 50, signaling economic slowdown.
The University of Michigan Consumer Sentiment Index dropped to 64.7.
January existing home sales declined by 4.9% compared to December.
Additional pressure came from weak quarterly results and cautious guidance from retail giant Walmart (WMT), which contributed to increased selling activity later in the week.
Company News and Market Impact
UnitedHealth (UNH) – Shares fell sharply following a U.S. Department of Justice investigation into Medicare Advantage billing practices. This marked the company's biggest intraday drop since March 2020.
Novo Nordisk (NVO) – Announced the resolution of supply shortages for Ozempic and Wegovy, negatively impacting Hims & Hers Health (HIMS), which had been producing compounded versions of these medications.
Celsius Holdings (CELH) – Acquired Alani Lu for $1.8 billion, strengthening its presence in the energy drink market.
Rivian (RIVN) – Issued a recall of 17,000 vehicles due to defective headlights, which could impact consumer confidence.
AMD (AMD) – Reportedly in talks to sell its server chip manufacturing facilities in Asia for approximately $4 billion, aiming to enhance its AI-related capabilities.
The market is showing signs of consolidation after reaching record highs. The expected correction in growth stocks suggests a possible shift in investor sentiment.