Market News 7 MAR
Impact of Trade Policy and Sector Trends
The stock market is once again showing a downward trend after a brief recovery. Investors remain focused on U.S. trade policy, which is exerting significant pressure on indices. The S&P 500 briefly broke below its 200-day moving average, the Nasdaq Composite entered correction territory, and the Russell 2000 continued to decline. Let’s analyze the factors influencing current market movements and the outlook for investors.
Trade Policy and Market Reaction
Stock indices have come under pressure due to uncertainty in trade relations. President Trump signed an executive order imposing new tariffs on a wide range of goods, triggering volatility in the markets. After the Secretary of Commerce announced temporary exemptions under the USMCA, investors attempted to push the market higher, but the rally was short-lived. Moreover, 62% of Canadian and 50% of Mexican goods remain subject to tariff restrictions, impacting corporate profit forecasts.
Key Index Performance
S&P 500 has fallen 6.6% from its all-time high, reflecting growing caution among investors.
Nasdaq Composite is down 10.4% from its peak, confirming a correction phase and raising concerns about the technology sector.
Russell 2000 continues to decline, indicating reduced confidence in small and mid-cap companies that rely on domestic economic factors.
Sector Performance
The technology sector has been hit the hardest, with profit-taking evident:
Nvidia (NVDA) fell 5.7% amid expectations of slowing demand for graphics processors.
Marvell Technology (MRVL) plunged 19.8% due to a weak sales forecast, leading analysts to revise their estimates.
Broadcom (AVGO), on the other hand, gained 8% thanks to strong quarterly results and growing demand for AI solutions.
The consumer goods sector is also under pressure:
Costco (COST) reported a 6.8% increase in sales, but shares declined due to missed expectations for membership fee revenue.
Amazon (AMZN) and Meta (META) slid on concerns about a continued slowdown in e-commerce and digital advertising growth.
Economic Indicators
Economic data signals potential risks for the market:
Trade balance worsened to -$131.4 billion (expected -$93.5 billion), which may pressure GDP growth.
Jobless claims fell to 221,000, indicating a stable labor market, though investors worry about potential future layoffs.
Q4 productivity increased by 1.5%, which is positive for corporate profits, but lower labor costs per unit suggest potential wage growth deceleration.
Key corporate events:
Alphabet (GOOGL) is under congressional investigation over censorship issues, increasing regulatory risks for the tech sector.
ZIM Integrated Shipping Services (ZIM) rose 6.8% amid speculation about a management-led buyout.
Venture Global (VG) announced an $18 billion investment in LNG exports, strengthening the U.S. position in the global gas market.
Intuitive Machines (LUNR) saw a 20% drop in its stock price due to issues with its lunar module and lack of communication with the spacecraft.
In the coming days, investors anticipate key data releases:
U.S. labor market report (expected +160,000 jobs), which could influence Fed rate expectations.
Fed Chair Powell's speech, which may provide insights into future monetary policy.
Consumer credit report, revealing household debt levels and potential effects on consumer spending.
The stock market remains under pressure from trade policy, rising bond yields, and volatility in the technology sector. Investors are focused on upcoming economic data and signals from the Federal Reserve, which may determine the market's direction in the coming weeks.