Market News 25 FEB
Uncertainty and Investor Expectations
Today, the stock market showed mixed dynamics. The major indices initially attempted to recover from the morning decline, but buying activity failed to hold up until the market closed. As a result, the S&P 500 fell by 0.5%, the Nasdaq Composite lost 1.2%, while the Dow Jones Industrial Average, which had shown a 0.6% increase during the day, ended the session with a modest gain of 0.1%.
Geopolitical Tensions and Their Impact on Markets
The political environment continues to exert pressure on investors. The U.S. administration announced new measures against China, including additional fees for the use of commercial ships manufactured in China. As a result, Chinese shipping companies faced a sharp decline in stock prices. Furthermore, the White House directed the Committee on Foreign Investment to tighten restrictions on Chinese investments in critical U.S. economic sectors such as technology, agriculture, minerals, and ports.
Additional market pressure came from a press conference by the U.S. president, where he confirmed that tariffs on imports from Mexico and Canada would be implemented on schedule. This is expected to trigger new trade tensions and affect the cost of imported goods.
Key Stock Movements
The stock market faced pressure due to declines in major tech stocks. The S&P 500 technology sector fell by 1.4%, while the consumer discretionary sector dropped by 0.9%.
Major stock movements:
Nvidia (NVDA) – shares fell by 3% ahead of its quarterly earnings report, creating a domino effect in the semiconductor sector. Following this, Marvell Technology (MRVL) declined by 5%, Broadcom (AVGO) by 4%, and Micron Technology (MU) and Lam Research (LRCX) lost over 3% each.
Microsoft (MSFT) – declined by 1% after reports of renegotiating data center lease contracts, raising concerns about the company’s cloud business outlook.
Apple (AAPL) – the only member of the ‘Magnificent Seven’ to post a gain (+0.86%), thanks to its announcement of creating 20,000 new jobs in the U.S. and investing $500 billion in innovation.
Tesla (TSLA) – dropped by 2.2% despite news of an upcoming software update for Chinese customers.
Meta (META) – fell by 2.5%, extending last week’s losses and setting a new monthly low.
Economic Data Expectations
Investors are awaiting Nvidia’s earnings report, as well as key economic data that could influence the Fed’s interest rate decisions. Among the key upcoming reports:
The Conference Board Consumer Confidence Index, expected to drop to 102.7.
U.S. Q4 GDP report, anticipated to show a 2.3% growth rate.
The PCE Price Index (the Fed’s preferred inflation gauge), expected to decline to 2.5%.
Fed Rate Decisions and Market Expectations
Currently, the probability of a 25-basis-point rate cut by the Fed at the next meeting is estimated at only 3%, indicating that investors are not yet counting on monetary policy easing.
Corporate Events
Palantir Technologies (PLTR) – fell by 10% due to concerns over potential U.S. defense spending cuts.
Berkshire Hathaway (BRK.B) – gained 4% on strong Q4 earnings.
Nike (NKE) – rose by 5% following an analyst rating upgrade.
Robinhood Markets (HOOD) – declined by more than 3%, despite the SEC closing its crypto-related investigation with no action taken.
Realty Income (O) – financial results disappointed investors, leading to a 2% stock decline.
Zoom Video Communications (ZM) – despite exceeding EPS forecasts, the company faced revenue growth challenges.
The stock market remains in a state of uncertainty, heavily dependent on macroeconomic data and corporate earnings. Investors are proceeding with caution ahead of inflation and GDP reports, as well as the Fed’s crucial policy meeting. In the coming days, volatility is expected to remain high, particularly in the tech sector, where Nvidia’s upcoming earnings report could serve as a catalyst for either further gains or additional declines.