The S&P 500 Index ($SPX) (SPY) is down -0.37%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.02%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.85%. March E-mini S&P futures (ESH25) are down -0.24%, and March E-mini Nasdaq futures (NQH25) are down -0.70%.
Stocks are trading lower today, adding to last Friday’s sharp losses of -1.71% in the S&P 500 index and -2.06% in the Nasdaq 100 index. Stocks were undercut last Friday by negative economic data, led by the decline in the University of Michigan’s US Feb consumer sentiment index to a 15-month low of 64.7. Also, the University of Michigan’s US Feb 5-10 year inflation expectations indicator rose to a 29-year high of +3.5%.
Stocks are being undercut today by losses in most of the Magnificent Seven stocks, led by Meta, Tesla, and Microsoft. The stock market is seeing some underlying support as the 10-year T-note yield fell by -3 bp.
The Trump administration has launched fresh measures against China. The administration proposed fees on the use of commercial ships made in China, which caused Chinese shipping stocks to fall on Monday. President Trump also issued a memorandum to the US Committee on Foreign Investment in the US instructing the Committee to limit China’s ability to invest in key US sectors such as technology, food, farmland, minerals, natural resources, ports, and shipping terminals.
Stock investors are looking ahead to Nvidia’s earnings report after Wednesday’s close. This week’s US economic calendar is also busy. Tuesday’s Feb Conference Board US consumer confidence index is expected to show a -1.4 point decline to 102.7. Thursday’s US Q4 GDP report is expected to show an increase of +2.3% (q/q annualized), with a +4.1% increase in personal consumption. Friday’s Jan PCE price index report, the Fed’s preferred inflation measure, is expected to ease slightly to +2.5% y/y from December’s +2.6%, and the core index is expected to ease to +2.6% y/y from December’s +2.8%.
The markets are discounting the chances at 2% for a -25 bp rate cut at the next FOMC meeting on March 18-19.
The German Dax stock index is up +0.31% today after the conservative Christian Democrat party, led by Friedrich Merz, won a plurality in Sunday’s German election, beating the far-right Alternative for Germany (AfD) party. However, the centrist parties are expected to have difficulty building a ruling coalition.
Overseas stock markets are mixed. The Euro Stoxx 50 is down -0.54%. China’s Shanghai Composite Index closed down -0.18%. Japan’s Nikkei Stock 225 closed up +0.26%.
Interest Rates
March 10-year T-notes (ZNH25) are up +5 ticks. The 10-year T-note yield is down -3.3 bp at 4.398%. March T-note prices are seeing support from safe-haven demand after stocks turned lower. However, T-note prices are being undercut by supply overhang as the Treasury sells $69 billion of 2-year T-notes today, $70 billion of 5-year T-notes on Tuesday, and $28 billion of floating-rate 2-year T-notes and $44 billion of 7-year T-notes on Wednesday.
T-note prices are being undercut by higher government bond yields in Europe. The 10-year German bund yield is up +2.2 bp at 2.492%. The 10-year UK gilt yield is up +2.3 bp at 4.594%.
Swaps are discounting the chances at 98% for a -25 bp rate cut by the ECB at the March 6 policy meeting.
US Stock Movers
The Magnificent Seven stocks are trading lower today except for Alphabet and Apple.
Apple (AAPL) is up +0.5% after saying it will hire 20,000 new employees in the US and invest in “American innovation,” spending at least $500 billion in the US over the next four years. Apple said it will open a manufacturing plant in Houston to build AI servers.
Nvidia (NVDA) is down -0.8% ahead of its earnings report on Wednesday.
Microsoft (MSFT) is down more than -1% after a report by TD Cowan that Microsoft has canceled some leases for US data center capacity, raising questions about whether it has secured too much capacity or that Microsoft might be less optimistic about AI demand.
Tesla (TSLA) is down more than -1% despite Bloomberg’s report that the company will soon issue a software update for Chinese customers that offers increased driver-assistance capabilities.
Palantir Technologies (PLTR) is down by -8%, adding to last week’s -15% drop, as concern continues about cuts in US defense spending.
Berkshire Hathaway (BRK.B) is up more than +3% on an earnings surge in Q4, driven in part by a large increase in insurance underwriting.
Nike (NKE) is up more than +5% on a rating upgrade by Jefferies to buy, which said Nike is poised for a strong recovery in coming quarters.
Domino’s Pizza Inc. (DPZ) is down by more than -2% on news of disappointing Q4 sales as US consumers curb their spending.
Robinhood Markets (HOOD) is down -4% even though the company said the SEC closed its crypto investigation without any action.
Earnings Reports (2/24/2025)
Coterra Energy Inc (CTRA), Diamondback Energy Inc (FANG), Domino’s Pizza Inc (DPZ), ONEOK Inc (OKE), Public Storage (PSA), Realty Income Corp (O), SBA Communications Corp (SBAC).
