Market Overview
The equity market closed with losses across major indices. The Dow Jones Industrial Average declined by 0.3%, the S&P 500 dropped by 1.1%, and the Nasdaq Composite fell by 2.0%. This movement pushed the S&P 500 below its 200-day moving average of 5,756 and turned the Dow Jones Industrial Average, which had turned positive the previous day, back into negative territory for 2025.
Market Influences
Early signs of buying interest were present, but losses in the mega cap space limited the indices' performance. Selling pressure increased after news that President Trump is anticipated to announce tariffs on auto imports.
Notable Stock Movements
- Tesla (TSLA): The stock fell 5.6% to 272.06, despite a solid recovery from a weak start to 2025. It remains 9.4% higher for the week but has decreased by 32.6% since the start of the year.
- NVIDIA (NVDA): Shares dropped 5.7% to 113.76. The decline was influenced by reports of the U.S. blacklisting over 50 Chinese companies for export restrictions and potential impacts from Chinese environmental regulations on NVIDIA's sales.
Sector Performance
The PHLX Semiconductor Index (SOX) closed 3.3% lower. The S&P 500 information technology sector underperformed significantly, followed by the communication services (-2.0%) and consumer discretionary (-1.7%) sectors. Conversely, the defensive-oriented consumer staples (+1.4%) and utilities (+0.7%) sectors were top gainers, indicating a risk-off tone in the market.
Bond Market and Treasuries
Treasuries experienced modest losses. The 10-year yield increased by three basis points to 4.34%, while the 2-year yield rose by one basis point to 4.01%. The $70 billion 5-year note auction saw weaker demand compared to the previous day's 2-year note offering, though market reaction was muted.
Year-to-Date Performance
- Dow Jones Industrial Average: -0.2%
- S&P 500: -2.9%
- S&P Midcap 400: -4.2%
- Nasdaq Composite: -7.3%
- Russell 2000: -7.0%
Economic Data Review
Today's economic data included:
- Weekly MBA Mortgage Applications Index: -2.0%; Previous: -6.2%
- February Durable Orders: 0.9% (consensus: -1.2%); Previous revised to 3.3% from 3.1%
- February Durable Goods - ex transportation: 0.7% (consensus: 0.1%); Previous revised to 0.1% from 0.0%
The key takeaway is that durable goods orders were stronger than expected, though business spending showed a downturn, as evidenced by a 0.3% decline in nondefense capital goods orders, excluding aircraft.
Upcoming Economic Data
Looking ahead to Thursday, the market will receive the following data:
- 8:30 ET: Q4 GDP -- third estimate (consensus: 2.3%; previous: 2.3%)
- Q4 GDP Deflator -- third estimate (consensus: 2.4%; previous: 2.4%)
- Weekly Initial Claims (consensus: 225,000; previous: 223,000)
- Continuing Claims (previous: 1.892 million)
- Advance February goods trade balance (previous: -$153.3 billion)
- Advance February Retail Inventories (previous: -0.1%)
- Advance February Wholesale Inventories (previous: 0.7%)
- 10:00 ET: February Pending Home Sales (consensus: 2.9%; previous: -4.6%)
- 10:30 ET: Weekly natural gas inventories (previous: +9 bcf)
Global Markets and Commodities
Overseas market performance included:
- Europe: DAX -1.1%, FTSE +0.3%, CAC -1.0%
- Asia: Nikkei +0.7%, Hang Seng +0.6%, Shanghai -0.0%
Commodities saw the following changes:
Today's News
Pfizer (PFE, Financial) shares dropped following news that U.S. officials are investigating whether the company delayed announcing the success of its Covid vaccine with BioNTech (BNTX, Financial) until after the 2020 presidential election. This probe was initiated by claims from a former Pfizer scientist now at GSK (GSK, Financial). The case was brought to federal prosecutors by GSK shortly after the election.
Microsoft (MSFT, Financial) influenced a downturn in AI-related stocks as it scaled back data center plans, withdrawing from projects using over two gigawatts of electricity. TD Cowen analysts attribute this to Microsoft's decision against supporting additional Open AI training workloads, suggesting an oversupply of data center capacity relative to demand.
GameStop (GME, Financial) announced plans to offer $1.3 billion in convertible senior notes due 2030. The proceeds are intended for general corporate purposes, including potential Bitcoin acquisitions. The company's stock fell 6.49% in after-hours trading following this announcement.
Cintas Corporation (CTAS, Financial) reported an 8.4% revenue increase to $2.61 billion for Q3, driven by significant growth in its service segments. The company achieved record gross margins and operating income, with strategic acquisitions bolstering long-term growth.
Jefferies Financial Group (JEF, Financial) reported a Q1 GAAP EPS of $0.57, missing estimates by $0.37, with revenue down 8.6% year-over-year. The decline was attributed to challenges in asset management returns amid geopolitical uncertainties, though the company remains optimistic about future investment banking opportunities.
Dollar Tree (DLTR, Financial) announced the sale of its Family Dollar business to Brigade-Macellum for over $1 billion, aiming to improve management focus. The company reported a balanced 2% comp growth for Q4, emphasizing its multi-price strategy as a key driver.
SurgePays (SURG, Financial) saw a dramatic stock increase of 113.8% after providing a positive revenue forecast, expecting over $200 million in the next year. The company highlighted its wireless segment as a major contributor to this growth, with plans for aggressive revenue expansion.
CoreWeave (CRWV, Financial), backed by Nvidia (NVDA), faced technical defaults on a $7.6 billion loan due to administrative errors. These issues arose from using financing to expand in Europe, contrary to loan terms. CoreWeave is navigating these challenges amid plans for a Nasdaq IPO.
United Parcel Service (UPS, Financial) introduced its Global Checkout service to streamline international online shopping by guaranteeing upfront costs for duties and taxes. This service aims to eliminate unexpected charges and is available in 43 countries, supporting businesses in expanding globally.
Novo Nordisk (NVO, Financial) settled a lawsuit with Minnesota over insulin pricing, agreeing to cap out-of-pocket expenses at $35 per month. This settlement follows similar agreements by Eli Lilly (LLY) and Sanofi (SNY), addressing claims of excessive pricing practices.
Chevron (CVX) expressed interest in exploring additional oil and gas blocks off Crete, Greece, doubling the potential exploration area. This move aligns with Greece's hopes of discovering significant natural gas resources in its waters.
GuruFocus Stock Analysis
- BYD Plans to Double Overseas Sales in 2025 Despite U.S. Tariff Pressures by Faizan Farooque
- UPS Launches Global Checkout to Disclose Total International Shipping Costs Upfront by Faizan Farooque
- Meta Plans Ad-Free Facebook and Instagram Subscription for U.K. Users by Faizan Farooque
- Palantir, MongoDB Defy Software Slowdown With Strong Q4 Beats by Muslim Farooque
- Judge Sets June Trial Date in Boeing 737 MAX Fraud Case by Faizan Farooque
