On Tuesday, the S&P 500 index fell by 0.47%, the Nasdaq 100 dropped by 1.24%, while the Dow Jones rose by 0.37%. Technology stocks weakened due to concerns over tariffs and declining US consumer confidence. Chip stocks were also under pressure following reports that the Trump administration plans to tighten chip sales to China.
The US consumer confidence index for February fell sharply to 98.3, the lowest level in eight months, further worsening market sentiment. The crypto market also experienced a decline, with Bitcoin dropping more than 6% and Ethereum losing more than 5%, triggered by a risk-off environment and a major scandal in the crypto sector.
The Trump administration is also pressuring European and Asian countries to tighten chip controls against China and is considering sanctions on Chinese companies. Meanwhile, US home prices continued to rise in December, showing stronger-than-expected growth.
Investors are awaiting Nvidia’s earnings report after the market closes on Wednesday. Key economic reports this week include the US Q4 GDP data and the PCE price index, which the Fed closely monitors for inflation policy.
In the bond market, the US 10-year Treasury yield fell 10.8 basis points to 4.293% due to increased demand for safe-haven assets. Meanwhile, major stocks like Tesla, Nvidia, and Intel saw significant declines, while crypto-related stocks plunged due to falling digital currency prices.
Companies like Home Depot and Eli Lilly posted gains, whereas Krispy Kreme plunged 22% due to disappointing earnings guidance. The market is also awaiting financial reports from major companies such as Nvidia, Salesforce, and eBay.
Summary and Developments in the US Stock Market
1. Stock Index Performance
- S&P 500: -0.47%
- Nasdaq 100: -1.24%
- Dow Jones: +0.37%
- The decline was triggered by weaker technology stocks and falling US consumer confidence.
2. Market Drivers
a. Technology and Chip Stocks
- Nasdaq has weakened for three consecutive days.
- Chip stocks fell after reports that the Trump administration would tighten restrictions on chip sales to China.
- Nvidia (-3%), Marvell (-5%), and Intel (-5%) were under pressure.
b. US Consumer Confidence
- The US consumer confidence index (February) dropped sharply to 98.3, the lowest in eight months.
- The -7.0 point decline was the largest in 2.5 years.
c. Crypto Market
- Bitcoin: -6%
- Ethereum: -5%
- The decline was driven by risk-off sentiment and the impact of a major $1.5 billion hack and a memecoin scandal linked to Argentine President Milei.
3. Policies and Regulations
- US Tariffs on Mexico and Canada: Confirmed to take effect on March 4.
- China Investment Control: The US is considering sanctions on Chinese companies to limit investments in the technology and natural resource sectors.
4. US Economic Data
- December Home Prices:
- S&P CoreLogic: +0.52% m/m, +4.48% y/y
- FHFA Index: +0.4% m/m, +1.4% y/y
- US Q4 GDP Estimate (Thursday): +2.3%
- PCE Price Index (Friday): Expected to drop to 2.5% (from 2.6%), still above the Fed’s 2% target.
5. Bonds and Interest Rates
- US 10-Year Treasury Yield: Fell -10.8 bp to 4.293% due to increased investor interest in safe-haven assets.
- Fed Rate Cut Expectations (March 2025): 3% chance of a -25 bp cut.
- ECB Rate Cut Expectations (March 2025): 100% chance of a -25 bp cut.
6. Individual Stock Movements
Technology Stocks:
- Tesla (-8%): European sales down -45% y/y.
- Zoom (-8%): Negative financial guidance.
Crypto-Related Stocks:
- MicroStrategy (-11%), MARA (-10%), Coinbase (-6%).
Restaurant Stocks:
- Darden, Texas Roadhouse, Wingstop (+1%).
- Cheesecake Factory (-1.2%).
Other Stocks:
- Home Depot (+2%): Optimism about 2026 sales.
- Eli Lilly (+2%): Price cuts on obesity drugs.
- Krispy Kreme (-22%): Disappointing earnings.
7. Upcoming Earnings Reports
- Wednesday (February 27, 2025): Nvidia (NVDA).
- Other companies reporting earnings: Salesforce (CRM), eBay (EBAY), Lowe’s (LOW), TJX (TJX), and others.
