Stocks Rise in Mixed Trade as Wall Street Watches Trump-Zelenskyy Rift

The S&P 500 Index ($SPX) (SPY) today is up +0.48%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.49%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.46%.  March E-mini S&P futures (ESH25) are up +0.50%, and March E-mini Nasdaq futures (NQH25) are up +0.52%. 

Stock indexes today found early support after the US Jan core PCE index, the Fed’s preferred inflation gauge, matched expectations. Stocks turned slightly negative after midday when a White House meeting between President Trump, Vice President Vance, and Ukraine's President Zelenskyy turned contentious, but have since recovered to trade modestly higher.

The Jan core PCE index rose +2.6% y/y, matching the smallest annual pace of increase in nearly 4 years, bolstering speculation the Fed will be able to cut interest rates this year.  The favorable inflation news also lowered the 10-year T-note yield to a 2-1/2 month low. In addition, a rebound in chip stocks today from Thursday’s sell-off helped the Nasdaq 100 recover from a 3-1/4 month low and move higher.

Other US economic news today was mixed for stocks as Jan personal spending unexpectedly declined, while Jan personal income and the Feb MNI Chicago PMI rose more than expected.

US Jan personal spending unexpectedly fell -0.2% m/m, weaker than expectations of a +0.2% m/m increase and the biggest decline in nearly 4 years.  Jan personal income rose +0.9% m/m, stronger than expectations of +0.4% m/m and the biggest increase in a year.

The US Jan core PCE index rose +0.3% m/m and +2.6% y/y, right on expectations, with the +2.6% y/y increase matching the smallest annual pace of increase in nearly 4 years.

The US Feb MNI Chicago PMI rose +6.0 to a 5-month high of 45.5, stronger than expectations of 40.8.

The latest tariff threats from President Trump are negative for stocks.  On Thursday, President Trump said 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. 

The price of Bitcoin (^BTCUSD) fell to a 3-1/2 month low.  The week-long rout in cryptocurrencies deepened today as concerns about President Trump’s trade policies have led to a risk-off in asset markets, including cryptocurrencies.  Bitcoin has now fallen 28% from its all-time high in January.

The markets are discounting the chances at 5% for a -25 bp rate cut at the next FOMC meeting on March 18-19.

Overseas stock markets today are weaker.  The Euro Stoxx 50 fell to a 2-week low and is down -0.32%.  China’s Shanghai Composite Index slid to a 1-1/2 week low and closed down -1.98%.  Japan’s Nikkei Stock 225 sank to a 5-1/4 month low and closed down -2.88%.

Interest Rates

March 10-year T-notes (ZNH25) today are up +7 ticks.  The 10-year T-note yield is down -1.4 bp to 4.246%.  March T-notes today climbed to a 2-1/2 month high, and the 10-year T-note yield fell to a 2-1/2 month low of 4.220%.  T-notes are climbing today on carryover support from rallies in European government bonds.  T-notes also found support after US Jan personal spending unexpectedly declined, and the Jan core PCE index met expectations, which is a dovish factor for Fed policy.  T-note prices fell back from their best levels after the Feb MNI Chicago PMI rose more than expected and after stocks rallied, which curbed some safe-haven demand for T-notes. 

European bond yields today are moving lower.  The 10-year German bund yield fell to a 2-week low of 2.369% and is down -1.6 bp to 2.398%.  The 10-year UK gilt yield dropped to a 2-week low of 4.464% and is down -3.0 bp to 4.482%.

The ECB Jan 1-year CPI expectations unexpectedly eased to +2.6% versus expectations of no change at +2.8%.  The Jan 3-year CPI expectations were unchanged at +2.4%, better than expectations of an increase to +2.5%.

German Jan retail sales rose +0.2% m/m, weaker than expectations of +0.5% m/m.

German Feb CPI (EU harmonized) rose +0.6% m/m and +2.8% y/y, stronger than expectations of +0.5% m/m and +2.7% 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

AES Corp (AES) is up more than +12% to lead gainers in the S&P 500 after reporting Q4 adjusted EPS of 54 cents, stronger than the consensus of 35 cents, and forecast 2025 adjusted EPS of $2.10 to $2.26, better than the consensus of $2.04.

Today’s rebound in chip stocks from Thursday’s sell-off supports the broader market.  Marvell Technology (MRVL) is up more than +4%, and Intel (INTC) is up more than +3%.  Also, Nvidia (NVDA) is up more than +2% to lead gainers in the Dow Jones Industrials, and Microchip Technology (MCHP) is up more than +2%.  In addition, Analog Devices (ADI), Micron Technology (MU), Advanced Micro Devices (AMD), Lam Research (LRCX), GlobalFoundries (GFS), and Texas Instruments (TXN) are up more than +1%. 

Edison International (EIX) is up more than +7% after forecasting 2025 core EPS of $5.94-$6.34, stronger than the consensus of $5.70.

Monster Beverage (MNST) is up more than +5% to lead gainers in the Nasdaq 100 after reporting Q1 net sales of $1.81 billion, higher than the consensus of $1.80 billion.

Rocket Cos.  (RKT) is up more than +8% after reporting Q4 adjusted revenue of $1.19 billion, better than the consensus of $1.15 billion.

Elastic NV (ESTC) is up more than +13% after reporting Q3 revenue of $382.1 million, stronger than the consensus of $368.9 million, and raised its full-year revenue forecast to $1.47 billion-$1.48 billion from a previous forecast of $1.45 billion-$1.46 billion, above the consensus of $1.46 billion.

Entegris (ENTG) is up more than +3% after S&P Dow Jones Indices announced the stock would replace Arcadium Lithium Plc in the S&P MidCap 400 effective before trading on Thursday, March 6. 

Vital Farms (VITL) is up more than +3% after Stifel upgraded the stock to buy from hold with a price target of $44. 

Acadia Healthcare (ACHC) is down more than -24% after forecasting full-year adjusted Ebitda of $675 million-$725 million, weaker than the consensus of $741.6 million. 

NetApp (NTAP) is down more than -15% to lead losers in the S&P 500 after cutting its full-year adjusted EPS forecast to $7.17-$7.27 from a previous forecast of $7.20-$7.40, below the consensus of $7.31. 

HP Inc (HPQ) is down more than -6% after forecasting Q2 adjusted EPS of 75 cents to 85 cents, weaker than the consensus of 85 cents.

Dell Technologies (DELL) is down more than -5% after reporting Q4 total revenue of $23.93 billion, below the consensus of $24.65 billion, and forecast Q1 revenue of $22.5 billion-$23.5 billion, weaker than the consensus of $23.55 billion.

Solventum (SOLV) is down more than -4% after forecasting 2025 free cash flow of $450 million-$550 million, below the consensus of $604.6 million.

EOG Resources (EOG) is down more than -4% after reporting Q4 revenue of $5.59 billion, below the consensus of $5.66 billion.

Walgreens Boots Alliance (WBA) is down more than -3% after Deutsche Bank downgraded the stock to sell from hold with a price target of $9. 

Earnings Reports (2/28/2025)

Apellis Pharmaceuticals Inc (APLS), New Fortress Energy Inc (NFE).