Tesla Stock Surges on Trump’s Comments Before Paring Gains: Tesla stock experienced a strong rally during Wednesday’s trading,
driven by supportive comments from former U.S. President Donald Trump, before paring its gains later in the session.
Tesla Stock Surges on Trump’s Comments Before Paring Gains
Teslashares saw a sharp rise on Wednesday,
fueled by favorable remarks from former U.S. President Donald Trump, before trimming some of those gains later.
The stock surged 5.50% to $243.30 after reaching an intraday high of $251.69 earlier in the session.
This rally followed a 3.8% increase on Tuesday when Trump admired the company,
stated that he intends to buy a Tesla, and praised Elon Musk’s efforts in supporting the U.S. economy.
Analysts at Morgan Stanley predict that Tesla’s stock could reach $430,
driven by new developments in products such as the Optimus robot and the self-driving Robotaxi.
However, investor concerns have grown due to declining Teslasales
in key markets amid fears that Musk’s increasing involvement in politics
could negatively impact left-leaning consumers. The stock has dropped approximately 40% year-to-date.
On the other hand, billionaire investor Ron Baron,
one of Tesla’smajor shareholders, reaffirmed his commitment
to holding the company’s shares despite recent losses, stating that he would be the last person to sell his stake.
U.S. Fiscal Deficit Soars Over 374% in February Amid Revenue Decline and Rising Expenditures
The U.S. fiscal deficit widened significantly in February, reaching $307.01 billion,
a 374% increase compared to the same period last year, when it stood at $64.69 billion.
According to data released by the U.S. Treasury Department on Wednesday,
the fiscal deficit increased from $128.64 billion in January,
driven by declining revenues and rising government spending.
Monthly expenditures surged 30.5% year-over-year, rising by $141.1 billion to $603.44 billion,
while revenues saw a sharp 43% decline,
dropping by $230.56 billion to $296.42 billion.
Additionally, interest payments on government debt totaled
approximately $74 billion in the past month,
bringing the total interest payments to $396 billion since the start of the 2025 fiscal year.
This sharp deficit increase comes amid mounting
financial challenges facing the U.S. administration,
intensifying pressure on policymakers regarding future spending and tax policies.
Tesla Stock Surges on Trump’s Comments Before Paring Gains
Impact of Inflation Data on Stock Markets: Inflation data shapes financial market movements,
directly influencing central bank decisions, investor sentiment, and asset prices.
Following the latest U.S. inflation data release,
stock markets experienced significant volatility,
with better-than-expected figures helping markets recover after heavy losses.
In this article, we analyze the impact of recent inflation data on global markets,
focusing on Asian and U.S. stock movements, bond and currency performance,
and expectations regarding the Federal Reserve’s upcoming decisions.
Will the upward trend continue, or does uncertainty still dominate the markets? Keep reading for the full analysis.
Asian stocks climbed on Thursday after better-than-expected
U.S. inflation data helped Wall Street recover after two days of significant losses.
Japan and South Korea indices posted gains, while Hong Kong
and China markets showed mixed results.
U.S. stock futures also rose in early Asian trading, reinforcing gains from the previous session.
Despite Wednesday’s rally in the S&P 500 and Nasdaq 100 Both indices remain down more than 3% this week, marking their first gains since Friday.
Meanwhile, U.S. government bonds showed slight stability on Thursday,
with minimal movement following the inflation report.
The 10-year Treasury yield increased by three basis points to 4.3%,
while the 2-year yield rose by four basis points.
Major currencies fluctuated within narrow ranges,
and the U.S. dollar index mainly remained stable.
Ongoing Market Uncertainty
The lack of a strong market reaction to the inflation data highlights
the persistent uncertainty driven by economic policies.
Christina Woon, a portfolio manager at Eastspring Investments, told Bloomberg TV: “There is a constant flow of economic news from the U.S. and China,
creating significant volatility. While the U.S. economy was
a strong bet earlier this year, recent trends suggest a shift in favor of Asian markets, particularly China.”
U.S. Inflation Data and Its Impact
The U.S. Consumer Price Index (CPI), including a core measure
that excludes food and energy prices, rose 0.2% in February, below the expected 0.3% increase.
According to analysts at TD Securities, while the data presents positive signals,
it does not fully eliminate uncertainty, as inflation expectations remain
unclear due to ongoing political and economic developments. They added: “It is unlikely that the Federal Reserve will adjust its monetary policy based on this data alone.”
Focus on Producer Price Index Report
Markets are now looking forward to the U.S. Producer Price Index (PPI) report,
set to be released later on Thursday.
This report will provide further insights into inflationary pressures
influencing the Federal Reserve’s decision-making.
Concerns Over Tariffs
On Wednesday, President Donald Trump reaffirmed that the U.S.
would respond to European countermeasures against newly imposed 25% tariffs on steel and aluminum,
increasing fears of further trade tensions.
Additionally, in response to the U.S. trade measures,
Canada announced 25% tariffs on approximately $20.8 billion
of U.S. goods, including steel and aluminum.
Global Market Outlook
Investors are closely watching upcoming economic data,
including consumer confidence in Thailand, industrial output in Hong Kong,
and India’s trade figures, which could be released anytime before March 17.
Additionally, China’s money supply data is expected by March 15.
In the technology sector, strong gains in U.S. equities supported significant tech stocks,
with the “Magnificent Seven“ (Apple, Nvidia, Amazon, Alphabet, Meta, Microsoft, Tesla)
climbing 2.3%, marking their best day since January.
Meanwhile, Intel announced a new CEO,
while Adobe issued weaker-than-expected business forecasts, impacting its stock performance.
Federal Reserve Watch
Despite lower-than-expected inflation data,
markets remain cautious regarding the Federal Reserve’s next move.
Analysts believe the central bank is unlikely to cut interest rates soon.
Jeff Schulze, an investment strategist at ClearBridge Investments, stated: “While this data gives the Fed more breathing room,
future decisions will primarily depend on labor market conditions and inflation control.”
Some analysts still anticipate an interest rate cut in June,
with traders pricing an estimated 70 basis points of rate reductions throughout 2025.
Future Market Projections
According to BlackRock analysts, the Federal Reserve will likely
maintain a cautious monetary policy approach over the coming months,
closely monitoring developments in the U.S. economy and ongoing trade tensions.
Ultimately, investors remain cautious amid market fluctuations,
awaiting key economic data that could soon shape central bank policies and market directions.
Morgan Stanley Lowers U.S. Economic Growth Forecast Due to Tariffs and Rising Inflation
Morgan Stanley has revised its U.S. economic growth projections for 2025,
citing the negative impact of expanding tariffs
and the continued strength of the labor market,
which has driven inflation higher and increased pressure on economic growth.
The group, led by Chief Economist Michael T. Gapen,
stated that the expected impact of tariffs would materialize faster than previously anticipated.
Instead of having the greatest effect in 2026 as earlier estimates suggested, tariffs will now directly impact growth this year.
As a result, Morgan Stanley has lowered its forecast for U.S. GDP growth on a quarterly basis (Q4 2025 compared to Q4 2024) to 1.5% from 1.9%.
Additionally, the firm reduced its 2026 U.S. economic growth projection to 1.2%, down from a previous estimate of 1.3%.
The Report
The report also highlighted that potential trade policies under President Donald Trump could drive inflation higher,
further complicating the Federal Reserve’s efforts to control prices.
Despite these concerns, Morgan Stanley maintained its forecast that the Federal Reserve
will begin cutting interest rates by 25 basis points in June.
However, it noted that while markets may still expect three rate cuts in 2024,
these reductions could come later than current projections suggest.
Morgan Stanley Lowers Its U.S. Economic Growth Forecast
A fierce conflict has emerged between Sam Altman, the CEO of OpenAI, and Elon Musk,
one of its co-founders, as the latter has become one of its most vocal critics,
attempting to hinder its progress and limit its influence in the AI market.
Altman and Musk co-founded OpenAI in 2015 as a nonprofit organization aimed at developing artificial intelligence for the benefit of humanity.
However, as the company evolved, its executives realized the need for substantial funding,
leading them to restructure OpenAI into a partially for-profit entity.
Musk opposed this approach, demanding full control over the company or its merger with Tesla—both of which were rejected.
Musk’s Withdrawal
In 2018, Musk resigned from OpenAI’s board of directors.
A year later, Altman was appointed as the company’s CEO, a position Musk had sought for himself.
Since then, Musk has become an aggressive opponent of OpenAI,
frequently criticizing its policies and partnership with Microsoft.
Escalation of the Conflict
Musk didn’t stop at criticism; he took direct steps to compete with OpenAI, including:
Establishing his own AI company, X.AI.
Filing a lawsuit against OpenAI, accusing it of violating its original mission.
Attempting to acquire OpenAI with a massive $97 billion offer, which was ultimately rejected.
Exchange of Accusations
Musk described Altman as a “liar” and a “fraud,”
while Altman countered by claiming that Musk was simply trying to obstruct a strong competitor.
He also remarked that Musk is “an unhappy person driven by insecurity.”
AI Competition
OpenAI remains a dominant force in artificial intelligence, but Musk’s X.AI is gaining traction,
especially with the development of its “Grok 3” model, which claims to outperform OpenAI’s products.
X.AI is also seeking $10 billion in funding, potentially positioning itself as a formidable competitor in the near future.
Political Influence
Musk has gained increasing political influence, which could pose a challenge to OpenAI,
particularly in securing defense contracts and government-backed infrastructure projects.
As the rivalry continues, the future of AI remains uncertain, with two competing visions:
Musk’s open-source model versus Altman’s profit-driven approach.
Historic Decline in U.S. Stock Indices Amid Rising Economic Tensions: The U.S. financial markets have experienced significant turbulence due to escalating economic and political tensions,
leading to a historic decline in U.S. Stock Indices this year.
This downturn has been driven by new tariff-related decisions, deteriorating macroeconomic data,
and sharp volatility in the technology sector. With growing concerns about financial stability,
investors face significant challenges in predicting the trajectory of the markets in the coming period.
Impact of Tariffs on Financial Markets and Currencies
This announcement led to a rise in bond yields and a sharp drop in stock prices,
with the S&P 500 index losing nearly 2% after Trump stated that Mexico and Canada could not negotiate an exemption from the tariffs set to take effect on Tuesday.
Currencies linked to these countries were also affected, as the Canadian dollar and the Mexican peso fell. Later, the White House announced that Trump had signed an executive order doubling tariffs on China to 20%.
Stock Market Decline Amid Weak Economic Data
A decline in significant technology stocks negatively impacted the U.S. markets,
which faced additional pressure from weak manufacturing data.
Indices lost their Friday gains, causing the S&P 500 to drop 5% from its record high on February 19. Markets experienced extreme volatility, with the index swinging between gains and losses
of at least 1.5% over three consecutive sessions, a trend not seen since March 2020.
Economic reports on Monday painted a disappointing picture,
revealing weaknesses in the housing sector, an increase in jobless claims, and a decline in personal spending.
Cryptocurrencies, a key market risk indicator,
also dropped after initially surging the previous day when Trump renewed calls to create a digital asset reserve.
Cali Cox from Ritholtz Wealth Management commented: “Now is not the time for pessimism but certainly for concern.
There is no concrete evidence of an imminent crash, but the economy is changing rapidly,
and the news cycle is relentless, leaving investors uncertain about what to do next.”
U.S. Financial Market Performance
The U.S. financial markets witnessed a significant decline amid economic and trade pressures.
The S&P 500 index fell by 1.8%, while the Nasdaq 100 dropped 2.2%,
impacted by losses in the technology sector.
The Dow Jones Industrial Average declined by 1.5%, reflecting the prevailing market uncertainty.
Major technology companies suffered notable losses,
with the “Magnificent Seven” index—including Apple, Alphabet, Nvidia, Amazon, Microsoft, Meta, and Tesla—falling by 3.1%.
Smaller companies were not spared from the downturn,
as the Russell 2000 index lost 2.8%, further highlighting investors’ concerns about the future of the U.S. economy.
Additionally, UBS’s basket of U.S. stocks most negatively impacted by tariffs fell 2.9%.
Meanwhile, the European markets told a different story.
They experienced one of their strongest rallies of 2025,
signaling a continuation of the international trading trend that has dominated much of the year.
Wall Street’s Volatility Index (VIX), often called the “fear gauge,” surged to its highest level since December.
All major tech stocks declined, with Nvidia suffering the most significant drop at 8.7%.
Meanwhile, TSMC announced plans to invest an additional $100 billion in the U.S.
based semiconductor manufacturing facilities, aligning with Trump’s push to boost domestic production.
Oilprices fell after OPEC+ confirmed its plans to resume suspended production.
Trump had previously urged the alliance to help reduce prices.
The 10-year U.S. Treasury bond yield fell by five basis points to 4.16%,
while the Bloomberg Dollar Index declined 0.4%. Bitcoin also dropped 9.5%.
Investor Concerns About Market Future
David Kostin from Goldman Sachs warned that any S&P 500 rebound
would likely be temporary due to growing economic concerns.
“Investor exposure to stocks declined last week,
but not yet to a level low enough to be considered a tactical buying opportunity,” Kostin added.
Meanwhile, Florian Ilbo from Lombard Odier Investment Management noted
that markets are increasingly signaling fears of a potential economic slowdown in the U.S.,
emphasizing the importance of Friday’s jobs report, which could significantly impact investor sentiment.
Negative Outlook for U.S. Stocks
Scott Rubner from Goldman Sachs expressed skepticism about the ability of the U.S.
stocks to sustain a lasting recovery, arguing that current investment demand is insufficient to support a new upward trend.
He noted that while markets are undergoing an investment repositioning phase,
they “have not yet reached a turning point that warrants optimism.”
Shift Towards Value Stocks
With weak economic data and continued uncertainty surrounding tariffs, JPMorgan strategists, led by Mislav Matejka, predict a further rotation away from significant U.S. tech stocks.
Michael Wilson, a strategist at Morgan Stanley, pointed out that U.S. stocks
will likely remain more sensitive to economic growth than bond yields.
Meanwhile, Citi Group strategists, led by Scott Chronert, suggested that earnings estimates for the U.S.
companies do not fully reflect the potential risks of Trump’s proposed tariffs.
However, they emphasized that “focusing on individual sectors
and stocks will be more beneficial than concentrating on broader indices.”
Global Markets Outperform U.S. Stocks in 2025
At the beginning of 2025, global markets outperformed U.S. stocks,
a historically negative indicator for Wall Street’s performance for the rest of the year.
According to Bloomberg Intelligence,
the S&P 500 has never outperformed global markets if it lagged
by more than 2.8 percentage points by mid-February, as seen this year.
Bloomberg Intelligence analysts Gina Martin Adams and Gillian Wolfe described
this trend as “a rare historical red flag against a full market recovery,
given the deterioration of economic fundamentals.”
Historic Decline in U.S. Stock Indices Amid Rising Economic Tensions
Nvidia announced strong quarterly financial results, driven by surging demand for AI-powered products,
with the company expecting continued strong performance in the current quarter.
In a report released after Wednesday’s market close, CEO Jensen Huang stated:
“The demand for Blackwell chips is incredible. AI continues to drive expansion—more computing for training makes models smarter,
and more computing for deep reasoning makes responses more accurate and effective.”
The company also highlighted in its report that the large-scale production of AI-powered Blackwell supercomputers has significantly increased, leading to multi-billion-dollar sales in the first quarter.
Results
Nvidia’s Financial Performance for the Quarter Ending January 26, 2025
Revenue: Reached $39.33 billion, up 78% from $22.10 billion in Q4 2024, surpassing expectations of $38.05 billion.
Operating income: Rose 77% to $24.03 billion, compared to $13.61 billion in the same period last year.
Net profit: Jumped 80% to $22.09 billion, compared to $12.28 billion in 2024.
Adjusted EPS: Hit $0.89, marking an 82% increase from $0.49 in the previous year’s quarter.
Data center revenue: Recorded an impressive 93% growth, reaching $35.58 billion.
Gaming revenue: Declined 11% to $2.54 billion.
Annual Performance for Fiscal Year 2025
Nvidia reported annual revenue of $130.5 billion, an increase of 114% compared to the previous year,
while EPS rose to $2.94, reflecting a 147% growth.
Outlook
Projections for Q1 of Fiscal Year 2026
Nvidia anticipates revenue of approximately $43 billion, with a possible variance of ±2%, exceeding analysts’ expectations of $41.78 billion.
Huang concluded: “AI is advancing at an incredible pace, paving the way for a new revolution across major industries through AI agents and physical applications.”
Nvidia Reports Record Financial Results Driven by Strong AI Demand
Nvidia Earnings Fuel Tech Stocks Amid Market Volatility: The global markets experienced weekly fluctuations
as economic and political developments impacted stocks and currencies.
Meanwhile, Nvidia’searnings had a substantial impact on the technology sector.
While the company’s profits fueled gains for tech stocks on Wall Street,
some Asian markets declined due to concerns over U.S. tariffs and global economic developments.
Asian Markets See Modest Gains Amid Global Market Uncertainty
Asian stocks posted slight gains on Thursday as investors assessed the impact of new tariffs imposed
by U.S. President Donald Trump and reacted to Nvidia’searnings results.
Markets in Australia, Hong Kong, and Japan saw gains, while South Korea experienced a slight decline.
Meanwhile, Chinese markets fluctuated at the opening of trading.
U.S. S&P 500 and Nasdaq 100 futures stabilized after posting modest gains on Wednesday.
However, Nvidiashares slipped in after-hours trading as its strong financial
results failed to meet investors’ exceptionally high expectations.
Trump’s Tariffs Increase Market Volatility
On Wednesday, Trump announced that his administration would impose a 25%
tariff on the European Union while confirming that previously announced
tariffs on Mexico and Canada would take effect on April 2.
However, his contradictory statements created uncertainty among investors,
leading to sharp fluctuations in the currency markets.
The U.S. dollar strengthened, limiting losses for the Canadian dollar and the Mexican peso
but adding pressure on stocks and cryptocurrencies.
Marvin Loh from State Street commented: “Unclear statements about the timing and extent of tariffs keep investors on edge.
The debate continues over whether Trump will revise his plans or if this marks the start of stricter trade policies.”
Nvidia Earnings Boost Tech Sector on Wall Street
Tech stocks saw substantial gains on Wall Street following Nvidia’s
earnings announcement amid expectations that profits would revive the AI-driven rally.
Nvidiareported $11 billion in revenue from its Blackwell series chips in Q4,
calling it “the fastest product launch in company history.”
Darren Nathan from Hargreaves Lansdown stated: “Nvidiasuccessfully dispelled concerns about Blackwell chip production and potential demand threats,
delivering revenue and earnings that exceeded expectations, along with strong guidance for the current quarter.”
U.S. Market Performance Post-Nvidia Earnings
At the close of Wall Street trading, the S&P 500 remained unchanged,
while the Nasdaq 100 increased by 0.2%.
In contrast, the Dow Jones fell by 0.4%, reflecting mixed market sentiment.
Meanwhile, the 10-year U.S. Treasury yield declined by four basis points to 4.25%,
signaling a shift in investor expectations.
The U.S. dollar index rose by 0.1%, highlighting its resilience amid market fluctuations.
Fund Managers Reassess Strategies
In recent years, the dominance of major technology companies has posed a challenge for fund managers.
As these companies’ stocks declined by more than 10% from their peaks,
new opportunities have begun to emerge for identifying future market leaders,
according to Lisa Shalett from Morgan Stanley.
Promising Sectors:
Financial services Domestic industries and energy Mining, media, and entertainment AI-powered healthcare
Shalett explained that fund managers have reduced their allocations to major tech stocks
to their lowest levels since the global financial crisis,
contributing to improved fund performance,
especially with the decline of the “Magnificent Seven” stocks (Apple, Alphabet, Nvidia, Amazon, Meta, Microsoft, Tesla).
This shift has boosted the performance of active investors,
with 49% of actively managed mutual funds and exchange-traded funds
(ETFs) linked to the S&P 500outperforming the index in 2025,
According to Morningstar Direct, this rate is significantly higher than the 17% average over the past decade.
Bitcoin Declines Amid ETF Outflows
Bitcoindropped to $84,000, marking a 20% decline from its peak last month,
as increased outflows from exchange-traded funds (ETFs) led to additional selling pressure.
Key Economic Data Ahead
Investors closely monitor key economic reports and meetings that could shape global market trends in the coming days.
Upcoming data and events include:
Eurozone Consumer Confidence Index
U.S. Gross Domestic Product (GDP)
Initial U.S. Jobless Claims
Additionally, G20 finance ministers and central bank governors are meeting in Cape Town,
expecting policy decisions that could shape financial markets in the coming period.
With ongoing market volatility, investors closely watch monetary
and trade policy shifts and their implications for the global economy.
Conclusion
Global markets experienced a volatile week, with Asian stocks reacting to new U.S. tariffs,
while Nvidia’searnings supported the tech sector on Wall Street.
However, concerns remain about a potential global economic slowdown and changes in trade and monetary policies.
As markets anticipate upcoming G20 decisions and key economic developments,
investors remain in a wait-and-see mode for further indications on the future direction of global markets.
Wall Street Falls Ahead of Nvidia Earnings: The U.S. stock market saw a notable decline as major technology stocks
weakened ahead of the highly anticipated Nvidiaearnings report.
The S&P 500 dropped below 6,000 points, while the Nasdaq 100 lost more than 1%,
weighed down by the poor performance of tech giants.
Hedge fund exposure to the “Magnificent Seven” (Apple, Alphabet, Nvidia, Amazon, Tesla, Microsoft, andMeta)
has dropped to its lowest level since April 2023. Nvidia’sstock fell by 3.1%, while Microsoftshares declined following reports
that the company had canceled some AI data center lease agreements.
Meanwhile, Appleshares saw a slight increase.
Return of Market Volatility
Investors have increased their bets on renewed volatility, Nvidia’searnings release on Wednesday is expected to be a key market catalyst.
According to Chris Larkin from E-Trade, a subsidiary of Morgan Stanley,
this week could be crucial for the stock market, which has been trading sideways for over two months.
Central U.S. Indices Performance in the Last Trading Session:
In the bond market, the 10-year Treasury yield dropped by three basis points to 4.4%,
while demand surged for U.S. two-year Treasury bonds, with a record $69 billion worth purchased.
Impact of Tariff Policies
The Canadian dollar and Mexican peso weakened after President Donald Trump confirmed
He will proceed with planned tariffs on both countries next month, escalating trade tensions.
Will Nvidia Determine Market Direction?
According to Mark Hackett from Nationwide, the market is currently in a stabilization
phase following recent gains driven by investor uncertainty and seasonal weakness in February.
However, he noted that strong economic fundamentals, positive earnings,
and steady fund inflows could support a new bullish rally once momentum returns.
As Nvidia’searnings release approaches, the Federal Reserve’s preferred inflation metric is also expected to slow to its lowest since June.
However, slow progress in curbing inflation may keep the Federal Reserve cautious about future policy decisions.
The inflation data is set to be released on Friday.
Clark Bellin from Bellwether Wealth stated that strong earnings from Nvidiaand weaker-than-expected inflation data could provide a fresh boost for stocks.
Tech Stock Valuations Remain High
Tech and growth stocks dominate investor focus ahead of Nvidia’searnings.
Strategists at Deutsche Bank point out that valuations are exceptionally high relative to earnings growth,
making the market particularly sensitive to underwhelming results.
While fourth-quarter corporate earnings have significantly outperformed expectations,
markets have not reacted strongly, as disappointment in earnings guidance, revisions,
and operating margins have led to muted investor sentiment.
According to Bloomberg Intelligence strategists, As the corporate earnings season nears its end, Nvidia remains a major force in shaping market direction.
Capital Returning to U.S. Equities?
Despite concerns, some analysts believe that U.S. stocks will remain attractive long-term,
thanks to robust economic growth and rising corporate earnings.
Michael Wilson from Morgan Stanley, who had been bearish on U.S. equities until mid-2024,
suggested that capital could flow back into U.S. markets,
describing the S&P 500as the highest-quality index with the best earnings growth potential.
Meanwhile, Mislav Matejka from J.P. Morgan noted that growing pessimism
around major tech firms has become a significant hurdle for U.S. stock outperformance.
However, he emphasized that a sharp market downturn would require a clear slowdown in corporate earnings growth.
Has the Market Reached Its Peak?
After U.S. stocks experienced strong gains over the past two years,
concerns are growing about whether the markets have reached their peak.
Christian Floro from Principal Asset Management believes that bull markets
do not collapse simply due to age but depend on Federal Reserve policy.
He added that the Fed’s tightening monetary policies have driven most major market sell-offs since 1965.
However, the current economic landscape differs from past cycles,
as there are no clear signs of a sharp economic slowdown.
In conclusion, markets remain watchful of Nvidia’searnings, inflation data,
and Federal Reserve policy decisions could play a key role in shaping market direction in the coming period.
U.S. Tech Stocks Drop as Nvidia Leads Amid Chinese AI Rise: Major U.S. tech stocks declined on Friday, led by Nvidia,
after the company’s CEO’s remarks about the emerging Chinese company Deep Seek sparked investor interest.
He emphasized that the company enhances the AI market rather than threatens it.
U.S. Tech Stocks Drop as Nvidia Leads Amid Chinese AI Rise
Major U.S. tech stocks faced losses on Friday, with Nvidialeading the decline.
This came after CEO Jensen Huang commented on the Chinese startup Deep Seek,
attracting investor attention. He stated that the company’s innovations
increase demand for AI hardware rather than disrupt the market.
The “Magnificent Seven” ETF (MAGS) dropped 2% to $53.91. Nvidiashares fell 2.45% to $136.67, yet the company maintained its position
as the second-largest company in the world by market value, standing at $3.369 trillion.
In an interview on Thursday, Huang noted that he disagrees with the initial negative
investor reaction to Deep Seek’s rise and believes it will ultimately benefit the AI industry.
Tesla fell 4.4% to $338.81 amid investor concerns over competition in the AI and advanced technology sectors
Trump Urges Musk to Speed Up Reforms to Reduce Government Spending
On Saturday, U.S. President Donald Trump emphasized his desire for Elon Musk,
his billionaire advisor, to take bolder actions in implementing his reform plan to reduce federal government expenses.
In a post on Truth Social, Trump stated: “Elon is doing a great job, but I’d like to see him act even more boldly… Remember, we have a country to save.”
Earlier, Trump appointed Musk as head of the Department of Government Efficiency (DGE),
a newly established entity responsible for reducing public spending across federal agencies.
This initiative has already led to significant layoffs of federal employees recently.
In the latest workforce reduction, the U.S. Department of Defense announced
on Friday that it would cut its civilian workforce by at least 5% starting next week.
Additionally, the Trump administration has begun dismissing more federal employees
who were in probationary status as part of a comprehensive financial reform plan.
In a legal development, a judge on Thursday rejected a lawsuit filed
by federal employee unions seeking to temporarily halt mass layoffs.
This ruling grants the Trump administration and Musk more flexibility to restructure their government plans.
Despite the Department of Government Efficiency’s broad authority,
Musk’s spending cuts initiative has faced intense opposition and legal challenges,
sparking widespread debate over the impact of these policies on jobs and government services.
U.S. Tech Stocks Drop as Nvidia Leads Amid Chinese AI Rise
Japanese Stocks Decline Amid Yen Surge and Monetary Policy Tightening Expectations
Japanese stocks fell at the close of trading on Thursday, impacted by the strengthening yen and growing expectations
that the Bank of Japan will continue tightening borrowing costs.
The decline was also influenced by global trade tensions resulting from policies introduced by U.S. President Donald Trump.
The Nikkei 225 index closed down 1.24%, losing 486 points to settle at 38,678 points,
while the broader Topix index declined 1.18% to 2,734 points.
This downturn coincided with a 0.90% drop in the U.S. dollar against the yen,
bringing the exchange rate to 150.11 yen per dollar, the highest level for the yen in over two months.
The yen’s appreciation followed expectations that the gap between borrowing costs in Japan
and the U.S. may narrow as the Bank of Japan continues to raise interest rates.
A Reuters survey showed that economists anticipate another rate hike from the Bank of Japan by the third quarter,
bringing the key interest rate to 0.75%.
These expectations also pushed Japan’s 10-year bond yield up by one basis point to 1.448%,
marking its highest level since November 2009, adding further pressure on the Japanese stock market.
Alibaba
Alibaba Reports Strong Quarterly Results Driven by E-Commerce and AI Growth
It posted better-than-expected financial results for the third fiscal quarter,
fueled by strong revenue growth in its e-commerce sector at the end of last year
and promotional campaigns that attracted price-conscious consumers.
In a statement released on Thursday, CEO Eddie Wu highlighted significant progress in the company’s strategy,
which focuses on consumer needs and increased reliance on artificial intelligence.
He also noted that AI-driven product revenues have grown at a triple-digit rate for the sixth consecutive quarter,
with expectations for sustained momentum supported by advanced technologies.
Despite the strong financial performance, Alibaba’s stock in the Hong Kong market dropped 2.6%,
closing at HK$120.9 ($15.54 USD).
Meanwhile, its U.S. depositary receipts (ADRs) traded on the New York Stock Exchange rose 6.2% in pre-market trading,
reaching $133.6 USD as of 2:16 PM Mecca time.
Third Fiscal Quarter Results (For the period ending December 2024):
Revenue: ¥280.15 billion ($38.58 billion), up from ¥260.3 billion in the same quarter of 2023,
surpassing expectations of ¥279.34 billion, reflecting an 8% growth.
Adjusted Earnings Per Share: ¥21.39, marking a 13% increase from the previous quarter’s ¥18.97.
Net Income:¥46.43 billion, surging 33% from the previous quarter’s ¥10.71 billion.
The Japanese stock market faces continued volatility due to shifts in monetary policy and currency fluctuations,
while Alibaba’s strong performance highlights the growing influence of AI and e-commerce in shaping global markets.
Japanese Stocks Decline Amid Yen Surge and Monetary Policy Tightening Expectations
