Tag Archives: Wall Street

Wall Street Stumbles Amid Political and Trade Pressures

Wall Street Stumbles Amid Political and Trade Pressures
U.S. stocks fell sharply on Monday amid political attacks on the Federal Reserve escalated,
alongside growing trade tensions between the United States and China.
These losses followed a fresh assault by former President Donald Trump on Fed Chair Jerome Powell,
raising investor concerns over the independence of U.S. monetary policy.

 

Contents

 

Wall Street

Wall Street Closes with Sharp Losses as Political and Trade Tensions Escalate
 Major U.S. indices ended Monday’s session with significant collective declines
amid mounting political pressure on the Federal Reserve and worsening trade disputes between the U.S. and China.
The downturn followed another verbal attack by President Donald Trump on Fed Chair Jerome Powell,
which sparked investor fears over the central bank’s independence.

Tensions between Washington and Beijing also intensified after China warned countries against signing trade deals
with the U.S. at its expense—another sign of deepening tariff conflicts between the world’s two largest economies.

As a result, the Dow Jones Industrial Average dropped by 2.5%, or 971 points, marking its fourth straight daily loss.
The S&P 500 fell by 2.4%, bringing its total losses to 16% from its February 19 peak.
Meanwhile, the Nasdaq Composite declined 2.55%, totaling a 21% loss since its last high on December 16.

This comes as the Q1 earnings season gains momentum, with dozens of companies announcing results this week.
So far, 59 companies listed on the S&P 500 have reported earnings, with over 68% exceeding Wall Street’s expectations.

 

 

 

 

 

Germany

80% of German Companies Expect Major Damage from U.S. Tariffs
A survey conducted by the ZEW Institute revealed that more than 80% of German companies in the manufacturing
and IT sectors expect U.S. tariffs to cause significant harm to the German economy, the largest in the Eurozone.

The poll, which included 800 companies, showed that one in five firms believe U.S. trade policies
Under the current administration, it could inflict “severe damage” on the German economy.

In the manufacturing sector specifically, 46% of firms anticipate direct negative effects on their operations,
while around 64% voiced broader concerns for the sector overall.

Half of the industrial companies exporting to the U.S. market feared declining business.
Meanwhile, 42% of firms not directly involved in trade with the U.S. expect to be indirectly affected,
highlighting widespread concerns over how American protectionist policies may ripple through the German economy.

 

 

United States

M&A Deals Slow Down Despite Higher Value in Q1 2025
Mergers and acquisitions activity carried out by U.S. investment banks in the U.S. and Canada saw a noticeable slowdown in Q1 2025,
According to estimates published by S&P Global.
The number of deals reached about 4,110, down 4% compared to the same period in 2024,
despite the total deal value increasing to $420.5 billion, up from $397 billion a year earlier.

The data includes transactions from major banks such as
Goldman Sachs, Morgan Stanley, JPMorgan, Citigroup, Bank of America, and Wells Fargo.
These institutions cited ongoing political and economic uncertainty, particularly regarding U.S. trade policy,
as a major reason investors are delaying decisions on large transactions, despite optimism at the end of 2024.

Another key factor impacting sentiment was growing concern over increased competition in the AI sector,
especially following the entry of China’s DeepSeek with low-cost models,
posing a challenge to the dominance of U.S. firms like Nvidia.

 

 

 

Wall Street Stumbles Amid Political and Trade Pressures

Powell’s Warnings Sink Stocks Boost Gold and Bonds

Powell’s Warnings Sink Stocks, Boost Gold and Bonds:
Federal Reserve Chairman Jerome Powell’s warnings that trade tensions could undermine the
central bank’s employment and price stability goals triggered a fresh wave of volatility on Wall Street Thursday.
U.S. stock indices saw another sharp drop, while safe-haven assets like Treasury bonds and gold surged.

 

Contents

Powell Disappoints Expectations

U.S. Indices Slide

Labor Market
Additional Comments

Escalating Volatility
U.S. Retail Sales Surge

 

 

 

 

 

Powell Disappoints Expectations for Fed Intervention

After two days of relative calm, pressure returned to the markets following Powell’s signals
of a “wait-and-see” approach regarding the tariffs imposed by President Donald Trump.
This dashed hopes for quick Fed action to reassure investors.
Losses that had started earlier in the session deepened after two major semiconductor
firms reported disappointing results linked to the global trade war.

During his appearance at the Economic Club of Chicago, Powell was asked whether he foresaw
a scenario in which the Fed would step in to calm the markets.
He replied, “No,” adding that there are still many unresolved questions about the impact of Trump’s policies.
He continued: “We don’t know that yet, and until we do, we can’t make well-informed decisions.”

 

U.S. Indices Slide Amid Chip Export Restrictions

The S&P 500 fell by 2.2%, while the tech-heavy Nasdaq 100 dropped by 3%,
following new White House restrictions on Nvidia’s chip exports to China.
Meanwhile, the yield on 10-year U.S. Treasury notes declined by about five basis points to 4.28%.

 

Labor Market “In a Good Place”

Despite recent developments, Powell emphasized that the labor market remains.
In a perfect place,” as job supply and demand are easing.
He expressed expectations for these conditions to persist.

Adam Phillips, Managing Director of Investment Strategy at EP Wealth Advisors, noted:
“Many assumed the Fed would prioritize the employment side of the dual mandate if forced to choose,
But Powell clarified that price stability is essential to maintaining a strong labor market.”

He added, “If you expect the Fed to step in and support the market,
you should lower your expectations as long as inflationary pressures remain high.
Don’t expect near-term monetary policy support.”

Michael Bailey, Director of Research at FBB Capital Partners, said:
“Powell threw stocks under the bus.”
adding, “This year has been full of letdowns—from disappointing tariffs to the Fed abandoning investors.
Powell ignored the market at a critical moment, as semiconductor stock shocks weigh on global sentiment.”

 

 

 

 

More Commentary and Pressure on Nvidia and ASML

Earlier, Beth Hammack, head of the Cleveland Federal Reserve,
expressed a similar stance, stating that interest rates should remain steady until the impact of the tariffs becomes clear.
Meanwhile, swap traders maintained their bets that the Fed will cut rates by a whole percentage point by January.

Nvidia’s losses deepened after Powell’s comments, with its stock falling more than 9%.
The company warned of $5.5 billion in costs tied to inventories and obligations related to its H20 chip this quarter.
Concerns grew further after ASML reported weaker-than-expected orders.

On Monday, the U.S. government informed Nvidia that exporting the H20 chip to China requires an “indefinite license.”
Nvidia disclosed that the new rules are based on Washington’s
concerns that “the products in question may be used in a supercomputing device in China, or redirected to one.”

Vishnu Varathan, Head of Economics and Strategy at Mizuho Bank in Singapore,
said: “This move is alarming for two reasons: First, it highlights the erratic nature of Trump’s tariffs,
as prior concessions to Nvidia have been rolled back.
Second, it suggests that U.S.-China tensions are deep and ongoing, despite surface-level calm.”

 

Rising Volatility and Trade Contraction Fears

With volatility increasing, investors flocked to safe-haven assets such as gold,
which reached record levels, and the Swiss franc.
The U.S. dollar weakened amid escalating trade tensions, undermining confidence in the global reserve currency.

Among other pressures on riskier assets, the World Trade Organization revised its outlook for the year,
projecting that global trade will decline by 0.2% in 2025,
nearly three percentage points lower than previous forecasts if no new tariffs are imposed.

Reports also indicated that China is seeking a key figure and more tremendous respect
from the Trump administration before returning to the tariff negotiation table.

Solita Marcelli of UBS Global Wealth Management said:
“While we still expect trade talks to bear fruit eventually,
Brinkmanship between the U.S. and China appears set to continue in the near term.”

 

U.S. Retail Sales Surge

Meanwhile, U.S. retail sales rose 1.4% in March
The most significant increase in two years—as Americans spent heavily,
purchasing everything from cars to electronics in the days before President Trump’s tariff announcement.

 

Powell’s Warnings Sink Stocks, Boost Gold and Bonds

Wall Street Shakes Again: Is History Repeating Itself?

Wall Street Shakes Again: Is History Repeating Itself?

The rapid decline in Wall Street has revived grim memories of trading halts across the markets, Similar
to what occurred in March 2020 during the peak of the COVID-19 pandemic,
when trading was suspended multiple times due to consecutive crashes.

On Friday, the S&P 500 index fell by as much as 5.97%,
nearing the critical 7% threshold triggers the so-called “circuit breakers.”
on the New York Stock Exchange and halts trading for 15 minutes.

 

 

Contents

Circuit Breakers

Rising Recession Fears

Broad-Based Selloff

 

 

 

 

 

Circuit Breakers Return to Tame Market Overreactions

Regulators designed these breakers to curb extreme market volatility
and protect markets from erroneous trades, especially in an era of high-frequency trading.

They were last triggered in mid-March 2020 when the pandemic
led to widespread economic shutdowns and a historic spike in unemployment.

Mark Hackett, Chief Market Strategist at Nationwide, stated:
“This type of intense selling and panic is reminiscent of the pandemic period.”
 Although today’s uncertainty is much lower compared to the COVID era, he noted:
“Few see a reason to rush into buying, and some algorithmic traders are forced to sell at certain levels.”

 

Rising Recession Fears

According to current regulations, the percentage drop needed to activate the circuit
breakers expand from 7% to 20% after 3:25 p.m., remaining in effect until the market closes at 4:00 p.m.

U.S. markets had already dropped 10% over the two days following President Donald Trump’s
announcement of the most severe tariffs in a century
sparking fears of a global economic downturn.
The selloff accelerated Friday morning after China announced its intention to impose
similar trade barriers on American goods, escalating the trade war.

In recent weeks, the markets have experienced sharp volatility.
The VIX volatility index jumped to 45.56 on Friday, while the Nasdaq 100 Volatility Index climbed to 37.79 points.

 

 

 

A Broad-Based Selloff

Eric Diton, President of The Wealth Alliance, described the situation:
“There’s a random selloff across all sectors—even gold is being sold today.
The only thing holding up is bonds. The keyword right now is uncertainty.
Markets hate uncertainty, and we’re drowning in it. Even Trump doesn’t know what’s coming next—nobody does.”

If the S&P 500 drops by 7%, trading is halted for 15 minutes.
If losses reach 13%, a second 15-minute halt is triggered.
A 20% plunge would shut down the market for the rest of the trading day.

Friday’s selloff was so widespread that finding a haven was nearly impossible.
All 11 sectors of the S&P 500 ended in the red, with energy and financials leading the losses.

The most significant contributors to the decline were tech giants like Nvidia, Apple, Tesla,
and Berkshire Hathaway. Fewer than 20 stocks,
including Home Depot and Nike, ended the day in the green.

 

Wall Street Shakes Again: Is History Repeating Itself

Inflation Anxiety Rattles Wall Street

Inflation Anxiety Rattles Wall Street: U.S. markets experienced a sharp stock selloff,
a rise in bond prices, and gold hitting a new record high amid signs
of weakness in the core of the U.S. economy
and growing fears of worsening inflation driven by the ongoing trade war.

 

Contents

Worst Quarter Since 2022

Concerns Over a U.S. Economic Slowdown

Trump’s Tariffs Deepen Inflation Fears

Downgraded Growth Forecasts

Advice for Investors

 

 

 

 

Worst Quarter Since 2022

The S&P 500 index fell by 2%, with just one session remaining
before the end of a quarter, which is expected to be the worst since 2022.
Data showed a decline in U.S. consumer confidence and a rise in long-term inflation expectations.
This coincided with another report indicating weak spending and rising prices,
just ahead of an anticipated announcement of new tariffs next week.
 Large technology stocks dropped by 3.5%,
Meanwhile, the 10-year U.S. Treasury yield fell by 10 basis points to 4.26%.

 

Concerns Over a U.S. Economic Slowdown

Brett Kenwell from eToro said the biggest concern is that inflation
remains high while the economy is clearly slowing down.
He added, “While this scenario may not be the base case right now,
any increase in its probability could significantly affect investor sentiment.”
 He continued, “Unless there is greater economic deterioration,
it’s too early to conclude we’re entering a period of stagflation.”

According to Bespoke Investment Group, the Nasdaq Composite Index fell by 2.7%,
marking its fifth drop of more than 2% in March,
the highest number in a single month since the bear market in June 2022.
The Dow Jones Industrial Average fell by 1.7%.

Major companies saw broad declines, with Amazon and Alphabet falling
more than 4% and Lululemon Athletica dropping by 14% after issuing a bleak outlook.
At the same time, the U.S. dollar fell by 0.1%, and Bitcoin dropped by 4%.

 

Trump’s Tariffs Deepen Inflation Fears

As President Donald Trump’s administration escalates tariffs,
Consumers are increasingly concerned that these new duties will increase prices.
A sustained rise in costs may push households to reduce non-essential spending,
negatively impacting the broader U.S. economy and corporate earnings.

David Alkaly from Lazard Asset Management said,
“Today’s data reflect the pattern many analysts expect to see in the coming months:
weaker-than-expected spending and stronger-than-expected inflation due to the new tariffs and policy changes.”
 He added that if this pattern continues to appear in official statistics,
it could fuel further concerns as the upcoming tariff announcements approach.

Jim Baird from Plante Moran Financial Advisors stated, “In times of uncertainty,
financial planning becomes more complex, and consumers face difficult decisions.
Inflation has returned as a major and growing concern.”

 

 

 

 

Downgraded Growth Forecasts and Fund Outflows

According to a Bloomberg survey, economists have lowered their forecasts for U.S. economic growth this year.
They expect a decline in consumer spending and slower capital investment
due to uncertainty caused by ongoing changes in trade policy.

At the same time, U.S. equity funds recorded their largest weekly outflows since the start of the year.
In contrast, inflows into European equities continued,
according to Bank of America, citing data from EPFR Global.

 

Advice for Investors: Be Patient

Mark Hackett from Nationwide said the recovery rally could face disruptions,
Although April has historically been a positive month.
He added that investor sentiment has reached extreme levels,
which can sometimes serve as a contrarian indicator.
 He continued, “Historically, when market sentiment becomes this strained,
the S&P 500 tends to deliver strong returns over the next 6 to 12 months.
Overall, investors should remain patient for now.”

Meanwhile, David Lefkowitz from UBS Global Wealth Management
lowered his year-end target for the S&P 500 from 6600 to 6400 points due to recent economic turbulence.
Still, he believes stocks will recover and resume rising through the end of 2025.
 In a note to clients on Friday, he wrote:
“We still believe U.S. equities can recover and post gains this year.”

 

 

Inflation Anxiety Rattles Wall Street

Tech stocks drive Wall Street to end the week on a high

Tech stocks drive Wall Street to end the week on a high:
Wall Street indices saw a notable rebound thanks to gains in major tech stocks,
following a wave of sell-offs triggered by disappointing forecasts from leading companies across various sectors.

 

Contents

S&P 500 rebounds

Economic fears weigh on U.S. stocks

Continued volatility on Wall Street

Systematic funds shift positions

Trade risks under Trump’s shadow

 

 

 

 

S&P 500 rebounds amid sharp volatility

Five minutes before the market closed, the S&P 500 recovered after falling by more than 1% earlier.
The market experienced sharp volatility as many options expired,
contributing to a surge in trading activity.
Tesla was among the biggest drivers of the rebound in large-cap stocks,
while Boeing shares surged after winning a contract to develop a next-generation U.S. fighter jet.
Meanwhile, disappointing forecasts from Nikkei, FedEx, Micron Technology,
and Lennar Corp weighed on the market.
Wall Street also faced added turbulence from the expiration of derivatives,
equities, indexes, and ETFs worth an estimated $4.5 trillion.

 

Economic fears weigh on U.S. stocks

The U.S. stock market lost trillions of dollars in market value
last month amid concerns over economic slowdown, rising tariffs,
and escalating geopolitical tensions.
Persistent anxiety over elevated tech stock valuations added to traders’ caution.
Despite the S&P 500 entering a 10% correction last week,
the market failed to sustain a rebound,
putting pressure on the traditionally respected “buy-the-dip” strategy.

 

Continued volatility on Wall Street

According to Michael Wilson of Morgan Stanley,
volatility is expected to persist into at least the second half of 2025,
with stocks remaining below their record highs from last month.

Wilson told Bloomberg TV this week: “We expect this recovery to continue,
but we don’t foresee record highs being reached in the first half of the year.”

By the close, the S&P 500 and the Dow Jones Industrial Average showed little change,
while the Nasdaq 100 rose by 0.4%.
The 10-year U.S. Treasury note yield rose by one basis point
to 4.25%, and the dollar climbed 0.3%.

 

Systematic funds shift positions

According to data from Goldman Sachs ‘ trading desk,
trend-following funds turned to short U.S. equities for the first time in over a year,
with commodity trading advisors (CTAs)
reducing their exposure to the S&P 500 to its lowest level since 2023.

Conversely, according to JPMorgan data,
retail investors poured over $12 billion into U.S. equities in the week ending March 19.

Analysts are closely watching retail investors,
as they are often the last to reduce their stock holdings
an indicator that markets may not have bottomed yet despite the latest buying spree.

 

 

 

 

Trade risks under Trump’s shadow

Michael Hartnett from Bank of America said investors
largely ignore the risks of a full-blown trade war,
even as substantial capital flows into global equity markets.

According to market data, despite growing concerns over tariffs,
Since Donald Trump’s election, investors have seen limited chances of a recession,
especially given the positive market performance in key exporting nations like Germany and China.

Analysts from 22V Research, led by Dennis DeBusschere, said:
“The VIX and credit spreads have returned to levels consistent
with a non-recessionary environment but one marked by heightened uncertainty,
supporting technical strength within the stock market.”
They added: “This aligns with our view that the U.S. economy is not on the verge of a fast-approaching recession.”

While the market is awaiting retaliatory tariffs, expected
on April 2, 22V’s Kim Wallace believes that current trade policy risks are less concerning than in December,
with final tariff figures likely to come lower than feared.

22V added: “Uncertainty will remain elevated as negotiations continue,
which is negative from a stability perspective but potentially positive, given
that tensions appear to be easing compared to recent months.”

 

Tech stocks drive Wall Street to end the week on a high

Wall Street Falls Ahead of Nvidia Earnings

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 Nvidia earnings 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.

 

Contents

Decline in the Magnificent Seven Stocks

Return of Market Volatility

Impact of Tariff Policies

Will Nvidia Determine Market Direction

Tech Stock Valuations

Capital Returning to U.S. Equities

Has the Market Reached Its Peak

Conclusion

 

 

 

Decline in the Magnificent Seven Stocks

Hedge fund exposure to the “Magnificent Seven” (Apple, Alphabet, Nvidia, Amazon, Tesla, Microsoft, and Meta)
has dropped to its lowest level since April 2023.
Nvidia’s stock fell by 3.1%, while Microsoft shares declined following reports
that the company had canceled some AI data center lease agreements.
Meanwhile, Apple shares saw a slight increase.

 

Return of Market Volatility

Investors have increased their bets on renewed volatility,
Nvidia’s earnings 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’s earnings 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
Nvidia and 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’s earnings.
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 500 as 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’s earnings, inflation data,
and Federal Reserve policy decisions could play a key role in shaping market direction in the coming period.

 

 

Wall Street Falls Ahead of Nvidia Earnings

Wall Street Rises Despite Tariff and Inflation Concerns

Wall Street Rises Despite Tariff and Inflation Concerns: The U.S. stock market opened the week with strong gains,
disregarding concerns over inflation and tariffs.
The technology sector led the rally, with the Nasdaq 100 rising over 1%,
fueled by continued gains from Nvidia and Meta.
Steel and aluminum stocks also surged following remarks from U.S. President Donald Trump regarding new tariff impositions.
Amid these fluctuations, investors are closely watching upcoming inflation data
and Federal Reserve Chairman Jerome Powell’s testimony before Congress this week.

 

Contents

U.S. Stocks

Investor Focus

Stock Markets

Tariffs

Market Stability

Analysts Opinions

Investor Trends

Potential Market Declines

 

 

 

U.S. Stocks Rise Led by Tech Despite Tariff Concerns

U.S. stocks and Wall Street Rises Despite concerns over tariffs and inflation.
The technology sector drove the market higher, with the Nasdaq 100 gaining over 1% on Monday.
Nvidia extended its rally for the fifth consecutive session, while Meta saw gains for the sixteenth session in a row.

At the same time, the raw materials sector experienced notable
gains after President Trump announced plans to impose a 25% tariff on all steel and aluminum imports.
This pushed United States Steel and Alcoa stocks up by more than 2.5%.
Trump confirmed that these tariffs would apply to all countries, including Mexico and Canada,
without specifying an exact implementation date.
Additionally, he announced plans to introduce retaliatory tariffs on nations that impose taxes on U.S. exports.

 

Investor Focus

Beyond global trade concerns, investors are also focusing on inflation data and Powell’s testimony this week.
According to a New York Federal Reserve survey,
inflation expectations for the next year and the following three years remained unchanged at 3% in January.

Chris Larkin from E*Trade (Morgan Stanley) commented:
 “Inflation data, Powell’s testimony, and tariffs are this week’s key market drivers.
If the S&P 500 is to break out of its recent trading range,
it might need relief from negative surprises such as DeepSeek,
tariffs and consumer confidence have hindered momentum in recent weeks.”

 

Stock Markets Ignore Volatility and Continue Rising

Hedge funds emerged as major buyers of U.S. stocks last week,
reversing bearish positions amid stronger-than-expected corporate earnings.
According to a Goldman Sachs report for the week ending February 7,
hedge funds bought U.S. stocks the fastest since November,
marking the largest net purchase of individual stocks over three years, with a strong focus on the technology sector.

The S&P 500 rose 0.7%, the Nasdaq 100 climbed 1.3%, and the Dow Jones Industrial Average advanced 0.3%.
Bloomberg’s “Magnificent Seven” total return index gained 0.9%, while the Russell 2000 increased 0.5%.

The 10-year U.S. Treasury yield remained stable at 4.49%,
while the Bloomberg U.S. Dollar Index rose 0.2%. Gold prices surpassed $2,900 per ounce.

 

 

 

 

Are Tariffs Just a Negotiation Tactic?

Jose Torres from Interactive Brokers believes that many investors are beginning
to realize that most of the tariff rhetoric will not materialize.
Instead, it appears to be a negotiation strategy.

“The goal is to enhance domestic economic conditions rather than disrupt global trade momentum.
The outcome will likely be far better than initially expected,”
Torres explained. “That is why traders are stepping in and buying stocks today.”

Bespoke Investment Group analysts noted:
 “Since the inauguration, regardless of one’s stance on President Trump,
his second term has brought endless headlines.
Yet, despite this constant news flow, the market has remained surprisingly calm.”

 

Market Stability Amid Continuous News Flow

Over the last 100 trading days, the $630 billion ETF tracking the S&P 500 (SPY)
has traded within a relatively tight range of under 10%, according to Bespoke.
While this range may seem wide,
it ranks in only the 13th percentile among similar historical periods since the ETF’s launch in 1993.

During the COVID-19 pandemic, the S&P 500 ETF saw swings above 50%,
while volatility peaked at over 75% during the financial crisis.

 

Analysts Opinions

Anthony Saglimbene from Ameriprise advised:
 “It may be best for investors to avoid reacting to daily news cycles.
It’s wiser to step back and allow developments related to tariffs, big tech, and interest rates to unfold over time.
Making investment decisions based on uncertain outcomes increases the risk
of errors or mistimed moves if events unfold differently than expected.”

Mark Hackett from Nationwide added:
 “Despite the daily market noise, uncertainty over tariffs, geopolitical factors,
and tech sector valuations remain the biggest unknowns for investors.
These factors indicate a measured gain environment rather than the high returns of recent years.”

According to one market indicator,
investor expectations for the stock market have never been this high at the start of a presidential term.
The cyclically adjusted price-to-earnings (CAPE) ratio hit 38 in late January,
a level that Charlie Bilello from Creative Planning described as “extremely high”, reflecting unprecedented market optimism.

 

Investor Trends

Investor positioning tells a similar story, with the equity risk premium (ERP)
which measures the expected return differential between stocks and bonds
falling sharply into negative territory for the first time since the early 2000s.

Richard Saperstein from Treasury Partners commented:
 “Despite high valuations, we remain fully invested due to continued economic growth,
declining inflation, and a supportive Federal Reserve.
We anticipate a volatile market that leans toward upside potential throughout the year.”

However, Kali Cox from Ritholtz Wealth Management warned that high expectations,
rising interest rates and policy uncertainty create a challenging investment mix:
 “It’s crucial for investors to balance their portfolios and recognize that there are opportunities beyond artificial intelligence.”

 

Potential Market Pullbacks

Deutsche Bank strategists, including Binky Chadha,
believe that market resilience in the face of tariffs could lead to further trade escalations,
increasing the likelihood of equity market pullbacks.

According to their research, markets historically experience sharp but short-lived sell-offs during geopolitical shocks.
Stocks typically decline 6%-8% over three weeks, then recover over the next three weeks, even before tensions subside.

Christian Floro from Principal Asset Management emphasized:
 “For investors, the biggest market risks likely stem from policy unpredictability.
In this environment, diversification is essential to manage portfolio risks
and capitalize on opportunities as companies, countries, and markets adapt.”

 

Wall Street Rises Despite Tariff and Inflation Concerns

Wall Street Rises, Overcoming AI Concerns

Wall Street Rises, Overcoming AI Concerns:
U.S. stock indices increased as gains in most major sectors outweighed disappointing earnings from some tech giants.
However, Treasury yields fell to their lowest levels since 2025 following weak data from the U.S. services sector.

 

Contents

Mixed Performance of Tech Stocks

Wall Street Challenges

The Rise of DeepSeek

Market and Index Performance

Market Volatility

Unforeseen Risks

Jobs Report Expectations

 

 

 

Mixed Performance of Tech Stocks Amid Market Volatility

Shares of approximately 350 companies in the S&P 500 index rose,
with Nvidia leading gains in the semiconductor sector.
However, the “Magnificent Seven” index (Alphabet, Apple, Amazon, Nvidia, Meta, Microsoft, Tesla)
declined by 1.5% after Alphabet’s stock recorded
It’s the worst drop in over a year due to disappointing financial results.
Advanced Micro Devices (AMD) shares also fell by 6.3% due to weak forecasts.

Qualcomm shares rose on optimistic sales forecasts in extended trading after market close,
while Arm Holdings issued weak projections.
Ford Motor also warned of a potential decline in profits.

 

Wall Street Challenges and Market Volatility

Economic markets have been impacted by fluctuating data, trade tensions,
and questions about whether massive AI investments will start generating returns.
According to Mark Hackett of Nationwide,
recent market events serve as a stark reminder to investors that volatility can arise unexpectedly.

 

The Emergence of “DeepSeek” and Its Market Impact

Last week, Nvidia lost half a trillion dollars in value after the emergence of the AI competitor DeepSeek.
Additionally, Alphabet’s earnings raised concerns about capital expenditures,
affecting major tech stocks and driving the bull market.

While the “Magnificent Seven” contributed to more than
half of the S&P 500’s gains over the past two years, their earnings growth has slowed.

According to Ed Yardeni, founder of Yardeni Research,
Other S&P 500 companies now have a greater chance of growth and benefit from productivity-enhancing technologies.

 

Market and Index Performance:

The S&P 500 index rose by 0.4%, the Nasdaq 100 added 0.4% in gains,
and the Dow Jones Industrial Average increased by 0.7%.

Meanwhile, UnitedHealth Group trimmed its losses to 1% after announcing its communication
with the U.S. Securities and Exchange Commission (SEC)
regarding concerns over a deleted post by Bill Ackman on the “X” platform,
which claimed the company had exaggerated its earnings report.

On the other hand, Uber shares dropped 7.6% due to weak guidance on booked revenues.

The 10-year U.S. Treasury yield fell by 9 basis points,
reaching 4.42%, while the Bloomberg Dollar Spot Index declined by 0.2%.

 

 

 

 

Market Volatility and Future Investments

According to Daniel Skelly from Morgan Stanley,
markets are struggling to stabilize amid shifts in the economic landscape,
including anticipated tariffs and mixed corporate earnings.

With ongoing uncertainty, global sectors such as information technology, equipment,
and automotive industries may be more vulnerable,
while domestic sectors, such as financial services, could attract more investor interest.

 

Unforeseen Risks and Their Market Impact

According to Jim Chanos, one of the most renowned shortsellers,
real market risks remain unpredictable until they occur.
He pointed to the DeepSeek impact, which unexpectedly erased nearly $1 trillion in market value.

As earnings season approaches,
analysts closely watch companies that achieve a “Triple Play.”
beating revenue and earnings expectations while improving future guidance.

This year:

75% of companies exceeded earnings per share (EPS) expectations

66% surpassed revenue estimates

8% lowered future guidance

 

Jobs Report Expectations and Market Reaction

Traders are eagerly anticipating Friday’s jobs report.
Data has shown strong job growth, reinforcing labor market resilience amid economic uncertainties.

The Federal Reserve closely monitors labor market trends to determine the extent of interest rate cuts this year.
Last year’s rising unemployment rate was key
to the Fed’s decision to cut interest rates by a percentage point in 2024.
However, Fed Chair Jerome Powell recently described the labor market as “very stable.”

A survey by 22V Research found that:

24% of participants believe Friday’s report will be “a risk indicator.”

30% see it as a “low-risk indicator.”

46% think it will have “little to no impact”

According to Dennis DeBusschere of 22V Research,
investors are now focusing on average hourly earnings,
shifting away from payroll numbers and unemployment rates were last month’s key concerns.

 

Wall Street Rises, Overcoming AI Concerns

Wall Street Indices Decline Despite Fed’s Reassurances on Inflation

Wall Street Indices Decline Despite Fed’s Reassurances on Inflation

Wall Street indices declined despite the Federal Reserve’s reassurances on inflation,
as volatility in tech stocks and the central bank’s stance created a sense of caution in the markets.

 

Contents

 

 

 

 

Indices

Financial markets saw a decline in stocks and a rise in bond yields, though the overall volatility remained limited following Federal Reserve Chairman Jerome Powell’s press conference, which helped ease concerns about rising inflation.

The QQQ ETF, valued at $328 billion and tracking the Nasdaq 100 Index, experienced fluctuations in after-hours trading. Meanwhile, Tesla’s stock rebounded after an initial drop following its earnings report, whereas Microsoft shares fell due to slowing cloud computing growth in the last quarter of 2024.

The Federal Open Market Committee (FOMC) maintained interest rates in the 4.25% – 4.5% range, stating that inflation remains “somewhat elevated” without signaling any substantial progress toward its 2% target. Powell later clarified that this phrasing was merely a condensed version of a longer statement in the official report and not an indication of a policy shift.

 

 

Less Hawkish Tone

Peter Boockvar, author of The Boock Report, commented that Powell sought to reassure markets that there was no major reason for concern.
He emphasized that the wording adjustments in the Fed’s statement regarding labor markets
and inflation should not be interpreted as a significant policy change.

Similarly, Krishna Guha from Evercore noted that Powell’s remarks were “noticeably less hawkish” compared to previous statements.

On the market front, the S&P 500 fell 0.5%, the Nasdaq 100 declined 0.3%,
and the Dow Jones Industrial Average dropped by the same percentage.
Meanwhile, the 10-year Treasury yield rose by 2 basis points to 4.55%.

In the currency market, Bloomberg’s dollar index showed little change,
while the Canadian dollar pared losses after the Bank of Canada cut interest rates but refrained
from giving any guidance on future borrowing costs.

 

 

Tech Stocks

The recent volatility in major tech stocks has raised concerns on Wall Street,
as the performance of the S&P 500 is now highly concentrated in a few large-cap companies—a scenario not seen in over 20 years.

According to Michael Hartnett, a strategist at Bank of America,
fewer than one-third of companies in the index have outperformed the S&P 500 over the past two years.
This situation mirrors the conditions before the dot-com bubble of the late 1990s.

The risks of this concentration became evident this week when Nvidia lost nearly half a trillion dollars in market value
following the launch of the DeepSeek application.
Torsten Slok from Apollo pointed out that while this tech correction was triggered by DeepSeek,
the broader issue of high concentration risk in the S&P 500 remains unchanged.

 

 

 

 

 

Markets

Market analysts have mixed views on the impact of the Fed’s latest decisions:

  • Evan Vincent (Tigress Financial Intelligence): There is no fundamental change in the Fed’s outlook.
    Powell sees inflation gradually declining while labor and housing markets improve, supporting stock prices.
  • Scott Colyer (Advisors Asset Management): Powell’s comments indicate the Fed wants more data before making decisions,
    but they remain optimistic about progress in fighting inflation and the strength of the job market.
  • Frank Monkam (Buffalo Bayou Commodities): The Fed has not made any catastrophic mistakes so far.
    While their stance is slightly hawkish, any market dip could present a good buying opportunity.
  • David Russell (TradeStation): The Fed’s statement had a mildly hawkish tone,
    but policymakers are waiting for further data before the critical     March meeting.
  • Seema Shah (Principal Asset Management): The Fed is carefully monitoring economic data and government policies.
    If inflation reports show a further decline next month, along with slight labor market weakness,
    the Fed could adopt a more     dovish tone.
  • Samir Samana (Wells Fargo Investment): A strong economy and labor market support corporate earnings growth,
    making     large-cap U.S. stocks and sectors like energy, financial services, and industrials attractive investments.
  • Greg McBride (Bankrate): Inflation’s progress toward 2% has stalled, and the Fed acknowledges this.
    There were no signals in the post-meeting statement suggesting a rate cut in     March.
  • Jeffrey Roach (LPL Financial): The Fed will likely keep rates unchanged in March,
    as strong household income growth continues to push inflation higher in the services sector.

 

Future Outlook

Markets remain in wait-and-see mode, anticipating key inflation and employment reports,
which will shape the Fed’s monetary policy in the coming months.
As the U.S. economy and labor market remain resilient, investors are looking for clearer signals regarding interest rates
and their impact on stock market performance.

 

 

 

Wall Street Indices Decline Despite Fed’s Reassurances on Inflation

AI Disruptions Shake Wall Street Strongly

AI Disruptions Shake Wall Street Strongly: Wall Street faced a tough start to the week
amid fears that the low-cost AI model developed by China’s startup “DeepSeek.”
could make it difficult to justify the high valuations of tech stocks that have supported the market recently.

 

Contents

Significant Global Stock Declines

Shift Toward Safe-Haven Assets

Fundamental Changes in Market Narrative

Major Losses and Transformations

Hope in Earnings Announcements

 

 

 

 

Significant Global Stock Declines and Major Impacts on Tech Companies

From New York to London to Tokyo, stocks suffered heavy losses, with the S&P 500 dropping 1.7%,
and the Nasdaq 100 falling 3.2%. The closely watched Semiconductor Index also plunged 9.5%,
marking its steepest drop since March 2020.

NVIDIA, a key beneficiary of the AI boom, saw its stock tumble 17%,
marking the most significant single-day market cap loss in history.

With significant tech stocks collapsing, the U.S. stock market appeared poised
for its worst day since the Federal Reserve’s latest decision, which had already rattled traders.

 

Shift Toward Safe-Haven Assets Amid Market Turmoil

Investors flocked to safe-haven assets such as consumer staples and healthcare stocks in this volatile environment.
U.S. Treasury bonds also rose, driving yields to their lowest levels this year.
Safe-haven currencies like the Japanese yen and Swiss franc also gained, while cryptocurrencies faced intense pressure.

Chris Larkin of E*TRADE, a subsidiary of Morgan Stanley, remarked,
“What was already expected to be a significant week for the market has become even more
crucial due to disruptions in the AI sector,
making the tech giant’s earnings announcements this week critical for shaping market sentiment.”

 

 

 

 

Fundamental Changes in Market Narrative

Monday’s declines highlighted cracks in the market narrative that has prevailed since Donald Trump’s re-election.
This narrative expected a rally led by tech stocks, fueled by promises of deregulation,
tax cuts, and government investment in AI.

Treasury yields fell sharply as investors turned to safe-haven assets temporarily,
setting aside inflation fears tied to current administration policies.

The depth of losses in U.S. assets was tied to the significant weighting of AI-driven companies in key indices.
Companies like NVIDIA, Apple, Microsoft, Amazon, Meta, and Alphabet collectively
account for about 40% of the Nasdaq 100 and nearly 30% of the S&P 500,
making them highly vulnerable to significant declines.

Steve Sosnick of Interactive Brokers noted,
“The market’s reaction to DeepSeek suggests that some of the key assumptions driving
AI trades and major indices are now being reassessed.”

He added, “Part of today’s response stems from complacency overtaking the market.”

 

Major Losses and Transformations

The Dow Jones Industrial Average rose 0.4%, while the “Magnificent Seven” (major tech companies)
dropped 3.2%. The Russell 2000 small-cap index declined 1.3%,
while the Wall Street “fear index” (VIX) rose to its highest level since mid-December, reaching nearly 20 points.

The 10-year U.S. Treasury bonds yield fell by 10 basis points to 4.53%,
while the Bloomberg Dollar Spot Index edged up 0.1%. Bitcoin dropped 3.9%, trading at $100,537.23.

 

Hope in Earnings Announcements

Attention now turns to earnings results from major tech companies like Microsoft and Apple,
which could help restore confidence in the “Magnificent Seven.”

However, with high valuations, this earnings season may struggle to meet elevated expectations,
adding further pressure to the market.

Nevertheless, strategists remain optimistic that AI investment could unlock new revenue streams across the economy,
supporting a positive long-term outlook for the tech sector.

 

AI Disruptions Shake Wall Street Strongly