The final week of February ended with a mixed bag for markets as momentum trades unwound and inflation concerns resurfaced. The Nasdaq Composite ($IXIC) plunged 3.5%, erasing its YTD gains, while the S&P 500 ($SPX) dipped 1.0%. The Dow Jones ($DJI) managed a 1.0% gain, recovering from early losses on Friday’s rebound.
Mega-Caps & Nvidia ($NVDA) Drag Down the Market
💥 Nvidia ($NVDA) dropped 7.1% this week, despite a record quarter, as investors saw earnings “disappoint” sky-high expectations.
💥 Vanguard Mega Cap Growth ETF ($MGK) fell 2.7%, reflecting broader weakness in tech giants.
💥 Buy-the-dip strategies failed, signaling a shift in market sentiment.
Inflation, Tariffs & Economic Slowdown Weigh on Sentiment
📉 Consumer Confidence plunged from 105.3 to 98.3, the biggest drop since Aug 2021.
📉 12-month inflation expectations surged from 5.2% to 6.0%, fueling rate cut doubts.
📉 New home sales collapsed 10.5% MoM, while pending home sales hit a record low.
📉 Personal spending fell 0.5%, triggering Q1 GDP forecasts to drop from 2.3% growth to a 1.5% contraction.
Trump’s Tariffs & Geopolitical Tensions
🚨 Trump confirmed 25% tariffs on Canada & Mexico starting March 4, with an additional 10% duty on China the same day.
🚨 A heated Trump-Zelenskyy White House meeting saw Trump warn Ukraine is “gambling with World War III.”
🚨 Markets were expecting a rare earths deal with Ukraine, but no agreement was signed.
Bond Yields & Commodities React
📉 10-yr yield sank 19bps to 4.23%, marking a 34bps drop in February.
📉 2-yr yield fell 19bps to 4.00%, signaling growth fears.
🛢️ Crude oil fell below $70/bbl, extending its February loss to -3.8%.
Market Recap: Weekly Performance
📊 Dow ($DJI) ➝ +1.0% | YTD: +3.0%
📊 S&P 500 ($SPX) ➝ -1.0% | YTD: +1.2%
📊 Nasdaq ($IXIC) ➝ -3.5% | YTD: -2.4%
📊 Russell 2000 ($RUT) ➝ -1.5% | YTD: -3.0%
What’s Next? With AI stocks under pressure, rate cuts uncertain, and geopolitical tensions rising, expect volatility to stay elevated. The market needs clarity on tariffs, inflation trends, and Fed policy shifts before regaining momentum.
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