Stocks Slip on US Trade Uncertainty

The S&P 500 Index ($SPX) (SPY) today is down -0.22%, the Dow Jones Industrial Average ($DOWI) (DIA) is down -0.24%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.66%.  March E-mini S&P futures (ESH26) are down -0.25%, and March E-mini Nasdaq futures (NQH26) are down -0.67%.

Stock indexes are falling today as uncertainty over American trade policy has sparked risk-off sentiment in asset markets.  After last Friday’s close, President Trump signed an executive order raising global tariffs under Section 122 of the Trade Act of 1974 to 15% from 10% that he initially imposed after the Supreme Court struck down his global “reciprocal” tariffs.

Geopolitical risks are also negative for stocks.  US-Iran nuclear talks are scheduled to resume on Thursday in Geneva, and Iranian Foreign Minister Araghchi said he saw a “good chance” of a diplomatic solution to the standoff over his country’s nuclear program. Last Friday, President Trump said that he’s considering a limited military strike on Iran to ramp up pressure on the country to strike a deal over its nuclear program, and that he thought 10 to 15 days was “pretty much” the “maximum” he would allow for negotiations to continue. 

The US Jan Chicago Fed National Activity Index rose +0.39 to a 9-month high of 0.18, stronger than expectations of 0.01.

Fed Governor Christopher Waller said his decision on whether to support an interest rate cut at the March FOMC meeting will hinge on labor market data for February.

The market’s focus this week will be on corporate earnings results and economic news.  Later today, Dec factory orders are expected to fall -0.6% m/m.  On Tuesday, the Conference Board’s Feb consumer confidence index is expected to climb +2.5 to 87.0.  Tuesday evening, President Trump delivers his State of the Union address. On Wednesday, Nvidia releases its earnings results after the close.  On Thursday, initial weekly unemployment claims are expected to climb by +10,000 to 216,000.  On Friday, the Feb MNI Chicago PMI is expected to slip -1.8 to 52.2. 

Q4 earnings season is nearing its end, with more than 80% of the S&P 500 companies having reported earnings results.  Earnings have been a positive factor for stocks, with 74% of the 427 S&P 500 companies that have reported beating expectations.  According to Bloomberg Intelligence, S&P earnings growth is expected to climb by +8.4% in Q4, marking the tenth consecutive quarter of year-over-year growth.  Excluding the Magnificent Seven megacap technology stocks, Q4 earnings are expected to increase by +4.6%.

The markets are discounting a 5% chance for a -25 bp rate cut at the next policy meeting on March 17-18.

Overseas stock markets are higher today.  The Euro Stoxx 50 rose to a new record high and is up +0.14%.  China’s Shanghai Composite is closed for the week-long Lunar New Year holidays.  Japan’s Nikkei Stock 225 was closed for the Emperor’s birthday holiday.

Interest Rates

March 10-year T-notes (ZNH6) today are up by +5 ticks.  The 10-year T-note yield is down -1.9 bp to 4.063%.  T-notes are moving higher today as weakness in stocks has spurred some safe-haven demand for T-notes.  Also, the action by President Trump to raise his global tariff rate to 15% from 10% under Section 122 of the Trade Act of 1974 may curb global growth and is supportive for T-notes.  Supply pressures are limiting gains in T-notes as the Treasury will auction $211 billion of T-notes and floating rate notes this week, beginning with Tuesday’s $69 billion auction of 2-year T-notes.

European government bond yields are moving lower today.  The 10-year German bund yield is down -0.8 bp to 2.729%.  The 10-year UK gilt yield matched a 14-month low of 4.336% and is down -1.3 bp to 4.340%.

The German Feb IFO business climate survey rose +1.0 to a 6-month high of 88.6, stronger than expectations of 88.3.

Swaps are discounting a 2% chance of a -25 bp rate cut by the ECB at its next policy meeting on March 19.

US Stock Movers

Packaging stocks are under pressure today after RISI reported that domestic containerboard prices had declined by $20 per ton m/m.  As a result, International Paper (IP) is down more than -7%, and Smurfit West Rock (SW) and Packaging Corp of America (PKG) are down more than -5%.  Also, Greif Inc (GEF) is down more than -2%. 

Software stocks are falling today, weighing on the broader market.  Palantir Technologies (PLTR), CrowdStrike Holdings (CRWD), Atlassian (TEAM), and Datadog (DDOG) are down more than -4%.  Also, Salesforce (CRM) is down by more than 4% to lead the losers in the Dow Jones Industrials.  In addition, Intuit (INTU), Autodesk (ADSK), Adobe (ADBE), and Thompson Reuters (TRI) are down more than -2%. 

AppLovin (APP) is down more than -8% to lead losers in the S&P 500 and Nasdaq 100 after the SEC said its probe involving the company is “still active and ongoing.”

VF Corp (VFC) is down more than -5% after JPMorgan Chase downgraded the stock to underweight from neutral with a price target of $18.

Oklo Inc (OKLO) is down more than -3% after Barclays cut its price target on the stock to $82 from $146. 

Monday.com (MNDY) is down more than -8%, and Workday (WDAY) and DocuSign (DOCU) are down more than -6% after Jeffries downgraded the stocks to hold from buy, citing “more persistent risk and negative sentiment” as a result of AI-disruption fears. 

Arcellux Inc (ACLX) is up more than +77% after Gilead Sciences agreed to buy the company for $7.8 billion, or $115 per share.

Veris Residential (VRE) is up more than +12% after Affinius Capital, in partnership with Vista Hill Partners, agreed to acquire the company for about $3.4 billion or $19 per share. 

Texas Pacific Land Corp (TPL) is up more than +7% to lead gainers in the S&P 500 after KeyBanc Capital Markets raised its price target on the stock to $639 from $350.

Domino’s Pizza (DPZ) is up more than +4% after reporting Q4 revenue of $1.54 billion, better than the consensus of $1.52 billion.

Eli Lilly (LLY) is up more than +3% after Novo Nordisk said its Cagrisema product fell short of Lilly’s Zepbound in a trial.

Earnings Reports(2/23/2026)

Diamondback Energy Inc (FANG), Dominion Energy Inc (D), Domino's Pizza Inc (DPZ), Erie Indemnity Co (ERIE), Keysight Technologies Inc (KEYS), ONEOK Inc (OKE).