Nasdaq Slumps on Nvidia Weakness as Tariff Anxieties Loom Large

The S&P 500 Index ($SPX) (SPY) today is down -1.20%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.39%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -2.35%.  March E-mini S&P futures (ESH25) are down -1.34%, and March E-mini Nasdaq futures (NQH25) are down -2.38%. 

Stock indexes today have turned lower, with the Nasdaq 100 falling to a 6-week low.  Stocks fell back from opening gains as chip stocks retreated after Nvidia's quarterly earnings results failed to impress.  The broader market also came under pressure after President Trump said on social media that the proposed 25% tariffs on Canada and Mexico would go into effect on March 4, and China would likewise be charged an additional 10% tariff on that date.  Also, inflation pressures remain sticky after the Q4 core PCE price index was revised to a higher level.  In addition, US weekly jobless claims rose more than expected to a 2-1/2 month high and Jan pending home sales posted their biggest decline in 9 months.

Stocks found early support today on signs of US economic strength after Q4 GDP was left unrevised, and after Jan capital goods new orders nondefense ex-aircraft and parts, a proxy for capital spending, rose more than expected.

US Q4 GDP was left unrevised at +2.3% (q/q annualized).  The Q4 core PCE price index was revised upward to +2.7% from the previously reported +2.5%.

US Jan capital goods new orders nondefense ex-aircraft and parts, a proxy for capital spending, rose +0.8% m/m, stronger than expectations of +0.3% m/m.

US weekly initial unemployment claims rose +22,000 to a 2-1/2 month high of 242,000, showing a weaker labor market than expectations of 221,000.

US Jan pending home sales fell -4.6% m/m, weaker than expectations of -0.9% m/m and the biggest decline in 9 months.

Kansas City Fed President Schmid said the Fed may have to balance inflation risks against growth concerns when he said, "While the risks to inflation appear to be to the upside, discussions with contacts in my district, as well as some recent data, suggest that elevated uncertainty might weigh on growth."

The remainder of this week's US economic calendar is busy.  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 expected Jan PCE reports of +2.5% nominal and +2.6% core would leave those measures at or above their 3-3/4 year lows posted in 2024 of +2.1% and +2.6%, respectively, and well above the Fed's +2% inflation target.

The markets are discounting the chances at 2% 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 down -1.17%.  China's Shanghai Composite Index climbed to an 8-week high and closed up +0.23%.  Japan's Nikkei Stock 225 closed up +0.30%.

Interest Rates

March 10-year T-notes (ZNH25) today are down -10 ticks.  The 10-year T-note yield is up +3.2 bp to 4.289%.  March T-notes are under pressure today after President Trump said 25% tariffs on Canada and Mexico would go into effect on March 4, which could boost inflation and keep the Fed from cutting interest rates. Also, an upward revision to the Q4 core PCE price index signals stubborn inflation and is bearish for T-notes. Losses in T-notes are limited on carryover support from today's rally in 10-year German bunds to a 2-week high. Also, US weekly jobless claims rose to a 2-1/2 month high and Jan pending homes sales fell more than expected, dovish factors for Fed policy.

European bond yields today are mixed.  The 10-year German bund yield fell to a 2-week low of 2.415% and is down -1.4 bp to 2.420%.  The 10-year UK gilt yield is up +1.8 bp to 4.520%.

Eurozone Feb economic confidence rose +1.0 to a 5-month high of 96.3, stronger than expectations of 95.9.

The Eurozone Jan M3 money supply rose +3.6% y/y, weaker than expectations of +3.8% y/y.

Swaps are discounting the chances at 99% for a -25 bp rate cut by the ECB at the March 6 policy meeting.

US Stock Movers

Warner Bros Discovery (WBD) is up more than +8% to lead gainers in the S&P 500 and Nasdaq 100 after reporting Q4 total subscribers of 116.90 million, above the consensus of 115.75 million.

Universal Health Services (UHS) is up more than +6% to lead healthcare stocks higher after reporting Q4 adjusted EPS of $4.92, well above the consensus of $4.15.  Also, Molina Healthcare (MOH) is up more than +3%.  In addition, Centene (CNC), Elevance Health (ELV), HCA Healthcare (HCA), and Humana (HUM) are up more than +2%.

Snowflake (SNOW) is up more than +8% after reporting Q4 revenue of $986.8 million, stronger than the consensus of $958 million, and forecast 2026 product revenue of $4.28 billion, above the consensus of $4.23 billion. 

Nutanix (NTNX) is up more than +13% after reporting Q2 revenue of $654.7 million, above the consensus of $641.7 million, and raised its full-year revenue forecast to $2.50 billion-$2.52 billion from a previous estimate of $2.44 billion-$2.47 billion, stronger than the consensus of $2.46 billion. 

Walgreens Boots Alliance (WBA) is up more than +3% after the Financial Times reported that a potential take-private deal from Sycamore Partners would lead to a split of Walgreens's US and UK Pharmacy businesses and its specialty pharmacy unit.

Allstate (ALL) is up more than +3% after boosting its quarterly dividend to $1.00 a share from 92 cents, higher than expectations of 95 cents.  The company also authorized a $1.5 billion stock buyback program.  

Papa John's International (PZZA) is up more than +2% after reporting Q4 adjusted EPS of 63 cents, stronger than the consensus of 50 cents. 

Freeport-McMoRan (FCX) is up more than +1% after Jeffries upgraded the stock to buy from hold with a price target of $48.   

Teleflex (TFX) is down more than -22% to lead losers in the S&P 500 after forecasting 2025 adjusted EPS continuing operations of $13.95-$14.35, well below the consensus of $15.24.

Chip stocks are retreating today to drag the Nasdaq 100 lower.  ON Semiconductor (ON) is down more than -4% and Nvidia (NVDA) is down more than -2% to lead losers in the Dow Jones Industrials.  Also, Marvell Technology (MRVL), Micron Technology (MU), Applied Materials (AMAT), NXP Semiconductors NV (NXPI), Microchip Technology (MCHP), Advanced Micro Devices (AMD), and GlobalFoundries (GFS) are down more than -2%.

Viatris Inc (VTRS) is down more than -15% after reporting a Q1 loss per share of -43 cents, a larger loss than the consensus of -28 cents.

Axon Enterprise (AXON) is down more than -5% to lead losers in the Nasdaq 100 after Argus Research cut its price target on the stock to $700 from $800.

eBay (EBAY) is down more than -8% after forecasting Q1 net revenue of $2.52 billion-$2.56 billion, weaker than the consensus of $2.60 billion. 

Pure Storage (PSTG) is down more than -8% after forecasting 2026 adjusted operating income of $595 million, below the consensus of $604 million. 

Moderna (MRNA) is down more than -3% after Bloomberg reported that US health officials are reevaluating a $590 million contract that the Biden administration awarded the company for bird flu shots. 

Salesforce (CRM) is down more than -1% after reporting Q4 revenue of $9.99 billion, below the consensus of $10.04 billion, and forecast 2026 revenue of $40.5 billion-$40.9 billion, weaker than the consensus of $41.46 billion. 

Teladoc Health (TDOC) is down more than -10% after forecasting 2025 revenue of $2.47 billion-$2.58 billion, the midpoint below the consensus of $2.54 billion. 

Earnings Reports (2/27/2025)

AES Corp/The (AES), Autodesk Inc (ADSK), Dell Technologies Inc (DELL), Edison International (EIX), EOG Resources Inc (EOG), Erie Indemnity Co (ERIE), Evergy Inc (EVRG), Hormel Foods Corp (HRL), HP Inc (HPQ), J M Smucker Co/The (SJM), Monster Beverage Corp (MNST), Mosaic Co/The (MOS), NetApp Inc (NTAP), Norwegian Cruise Line Holdings (NCLH), Solventum Corp (SOLV), Teleflex Inc (TFX), Viatris Inc (VTRS), Vistra Corp (VST), Warner Bros Discovery Inc (WBD).