Market News 28 FEB
Volatility, Tariff Impact, and Macroeconomic Challenges
The last trading session was one of the most eventful days in financial markets. The spotlight was on NVIDIA (NVDA) shares, which saw a sharp decline of more than 8% following its quarterly earnings report. Despite surpassing profit expectations, investors were concerned about the company's margin prospects and the impact of U.S. trade tariffs. This drop triggered a chain reaction in the tech sector, particularly among semiconductor manufacturers.
Geopolitical Pressure on Markets
Political developments also contributed to market turbulence. The U.S. President announced new tariffs on Canada, Mexico, and China starting March 4, intensifying investor concerns. Additionally, a 25% tariff on the EU is under consideration, which could further slow global trade and heighten inflationary pressures.
Alarming Trends
Incoming macroeconomic data did not provide much relief. U.S. initial jobless claims unexpectedly rose to 242,000, reaching a 2.5-month high. The pending home sales index fell 4.6% in January, marking its biggest drop in nine months. Meanwhile, the core PCE price index was revised upwards, indicating persistent inflationary pressure.
Tech Sector Decline
Amid these developments, major stock indices recorded significant declines:
S&P 500 fell below 5,900 points, with large-cap stocks bearing the brunt of the downturn.
Nasdaq Composite dropped 2.8% and is now down 8.1% from its December peak.
Russell 2000 fell 1.6%, bringing its total decline from the November high to 13.3%.
Philadelphia Semiconductor Index plummeted 6.1%, entering bear market territory.
Dow Jones Industrial Average managed to stay near the neutral line but still closed in negative territory.
Federal Reserve Comments: No Rush to Cut Rates
Markets also reacted to statements from Federal Reserve officials. The Cleveland Fed President noted that interest rates remain at a "sufficiently restrictive" level and do not need immediate cuts. This further pressured markets, as hopes for a more accommodative monetary policy began to fade.
Gainers and Losers
Despite the broad downward trend, some stocks managed to post gains:
Invitation Homes (INVH) rose more than 5% following strong earnings results.
Warner Bros Discovery (WBD) gained over 4% due to an increase in subscriber numbers.
Snowflake (SNOW) climbed 5%, exceeding revenue expectations.
Nutanix (NTNX) jumped 11% after raising its revenue forecast.
Among the biggest losers of the trading day:
Teleflex (TFX) plunged 21% after issuing a weak earnings forecast.
Pure Storage (PSTG) dropped 14% due to lower-than-expected guidance for 2026.
Moderna (MRNA) declined 7% after reports that U.S. health officials were reviewing its vaccine contract.
Tesla (TSLA) remains under pressure despite new initiatives in the robo-taxi sector.
Markets remain under the influence of uncertainty related to tariffs, inflation, and Fed policy. Key upcoming events include the release of personal income and spending data, as well as the consumer price index report. Investors will also be closely watching updated labor market statistics, which could impact future Fed decisions.