The S&P 500 Index ($SPX) (SPY) today is down -0.87%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.01%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -1.61%. March E-mini S&P futures (ESH25) are down -0.90%, and March E-mini Nasdaq futures (NQH25) are down -1.55%.
Tech stocks are weak again today, following sharp losses in the past two sessions when the Nasdaq 100 index fell -2.06% last Friday and -1.11% on Monday. There is a risk-off tenor to the market due to tariff risks and concern about the US economy with today’s sharp drop in US consumer confidence. Some chip stocks are also showing weakness on reports that the Trump administration is preparing new restrictions on chip sales to China. By contrast, the US stock market has underlying support from today’s -10 bp decline in the 10-year T-note yield.
Today’s Feb Conference Board US consumer confidence index fell sharply by -7.0 points to an 8-month low of 98.3, much weaker than expectations for a decline to 102.5. The -7.0 point drop was the largest drop in 2-1/2 years and was the third consecutive monthly decline.
Cryptocurrency prices are sharply lower today with the risk-off tenor in the markets. Bitcoin (^BTCUSD) is down more than -8%, and Ether (^ETHUSD) is down more than -9%, adding to Monday’s loss of -6%. In addition to the risk-off environment, the crypto sector is being hurt by last week’s news of the massive $1.5 billion Ether hack targeting the Bybit crypto exchange, and by a memecoin scandal involving Argentina President Milei.
The Trump administration plans to tighten chip controls on China and is also pressuring European and Asian countries to tighten restrictions on selling chips and chip-making equipment to China, according to a report today by Bloomberg. The administration is also considering sanctions on specific Chinese companies to restrict China’s ability to build a domestic chip industry for supporting AI and military capabilities.
President Trump on Monday afternoon, at a joint press conference with French President Macron, said that US tariffs on imports from Mexico and Canada will go ahead “on time, on schedule.” Mr. Trump delayed the tariffs by a month until March 4 due to new border measures implemented by both Canada and Mexico. Mr. Trump on Monday also said he plans to go ahead with the “reciprocal tariffs” that he previously said would be ready by April 1. Separately, President Trump recently issued a memorandum to the US Committee on Foreign Investment in the US (CFIUS) instructing the Committee to limit China’s ability to invest in key US sectors such as technology, food, farmland, minerals, natural resources, ports, and shipping terminals.
US home prices showed solid increases in December. The Dec S&P Corelogic US home price index rose +0.52% m/m and +4.48% y/y, slightly stronger than expectations of +0.40% m/m and +4.41% y/y, and was stronger than Nov’s revised report of +0.44% m/m and +4.35% y/y. Meanwhile, the Dec FHFA US house price index rose +0.4% m/m and +1.4% y/y, which followed Nov’s revised report of +0.4% m/m and +0.9% y/y.
Stock investors are looking ahead to Nvidia’s earnings report after Wednesday’s close. This remainder of this week’s US economic calendar is busy. Thursday’s US Q4 GDP report is expected to show an increase of +2.3% (q/q annualized), with a +4.1% increase in personal consumption. Friday’s Jan PCE price index report, the Fed’s preferred inflation measure, is expected to ease slightly to +2.5% y/y from December’s +2.6%, and the core index is expected to ease to +2.6% y/y from December’s +2.8%.
The markets are discounting the chances at 3% for a -25 bp rate cut at the next FOMC meeting on March 18-19.
Overseas stock markets today are mixed. The Euro Stoxx 50 is up +0.28%. China’s Shanghai Composite Index closed down -0.80%. Japan’s Nikkei Stock 225 closed down -1.39%.
Interest Rates
March 10-year T-notes (ZNH25) are up +20 ticks. The 10-year T-note yield is down by -10.8 bp at 4.293%. March T-note prices are seeing support from today’s weak US consumer confidence report and increased safe-haven demand tied to weakness in tech stocks and cryptocurrencies.
However, T-note prices are being undercut by supply overhang ahead of today’s Treasury auction of $70 billion of 5-year T-notes. On Wednesday, the Treasury will sell $28 billion of floating-rate 2-year T-notes and $44 billion of 7-year T-notes.
European bond yields today are lower. The 10-year German bund yield is down -1.2 bp at 2.466%. The 10-year UK gilt yield is down -5.9 bp at 4.505%.
Swaps are discounting the chances at 98% for a -25 bp rate cut by the ECB at the March 6 policy meeting.
US Stock Movers
All the Magnificent Seven stocks are trading lower today. Tesla (TSLA) is the largest loser of the Magnificent Seven, with a loss of more than -8% on reports that Tesla sales in Europe in January tanked by -45% while overall European EV sales rose +37%.
Some chip stocks are trading lower today on reports that the Trump administration is planning new restrictions on chip sales to China. Also, Nvidia (NVDA) is down more than -2% and is showing volatility ahead of its earnings report after Wednesday’s close. Marvell Technology (MRVL) is down more than -5%, and Intel (INTC) is down more than -4%.
Crypto stocks are trading lower today with the sharp sell-off in cryptocurrencies. MicroStrategy (MSTR) is down more than -11%. MARA Holdings (MARA) and Riot Platforms (RIOT) are down more than -12%. Coinbase (COIN) is down more than -7%.
Restaurant stocks were undercut after the National Restaurant Association today urged President Trump in a letter to exempt food and drinks from tariffs, which could total as much as $12 billion and cut profits for small restaurant owners by as much as 30%. Darden Restaurants (DRI) is up +1.2% but Texas Roadhouse (TXRH) is down -0.8%, Wingstop (WING) is down -1.9%, and Cheesecake Factory (CAKE) is down -2.0%.
Home Depot (HD) is up more than +2% today after management said it expects comparable sales to rise +1% in the fiscal year through January 2026, although the company expects continued consumer caution on large home improvement projects.
Zoom Communications (ZM) is down more than -8% after negative management guidance.
Eli Lilly (LLY) is up more than +2% after the pharma company cut prices for its obesity drug Zepbound
To combat competition.
Krispy Kreme (DNUT) is down more than -26% after disappointing revenue guidance.
Earnings Reports (2/25/2025)
Home Depot Inc (HD), Keurig Dr Pepper Inc (KDP), Henry Schein Inc (HSIC), Pinnacle West Capital Corp (PNW), Public Service Enterprise Grou (PEG), American Tower Corp (AMT), Sempra (SRE), Caesars Entertainment Inc (CZR), Extra Space Storage Inc (EXR), First Solar Inc (FSLR), Axon Enterprise Inc (AXON), Intuit Inc (INTU), Keysight Technologies Inc (KEYS), Workday Inc (WDAY).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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