The S&P 500 Index ($SPX) (SPY) fell -0.29%, the Dow Jones Industrials Index ($DOWI) (DIA) rose +0.12%, and the Nasdaq 100 Index ($IUXX) (QQQ) dropped -0.92% on Monday. March E-mini S&P futures (ESH25) declined -0.41%, and March E-mini Nasdaq futures (NQH25) fell -1.11%. The broad market and tech stocks continued their downward trend from last Friday, when the S&P 500 index dropped -1.71% and the Nasdaq 100 index fell -2.06%.
Negative US economic data, including a decline in the University of Michigan’s US Feb consumer sentiment index to a 15-month low of 64.7, weighed on stocks. Additionally, the University of Michigan’s US Feb 5-10 year inflation expectations indicator rose to a 29-year high of +3.5%. Losses in most of the Magnificent Seven stocks, particularly Nvidia, Meta, Tesla, and Microsoft, further undercut the market. However, the 10-year T-note yield fell by -3 bp, providing some underlying support.
The Trump administration introduced new measures against China, proposing fees on commercial ships made in China, which caused Chinese shipping stocks to decline. President Trump also instructed the US Committee on Foreign Investment to limit China’s ability to invest in key US sectors. At a joint press conference with French President Macron, Mr. Trump confirmed that US tariffs on imports from Mexico and Canada will proceed as scheduled on March 4.
Investors are anticipating Nvidia’s earnings report after Wednesday’s close. This week’s US economic calendar includes Tuesday’s Feb Conference Board US consumer confidence index, Thursday’s US Q4 GDP report, and Friday’s Jan PCE price index report. The markets are pricing in a 3% chance of a -25 bp rate cut at the next FOMC meeting on March 18-19.
In Europe, the German Dax stock index rose +0.62% after the conservative Christian Democrat party won a plurality in Sunday’s German election. Overseas stock markets were mixed, with the Euro Stoxx 50 down -0.39%, China’s Shanghai Composite Index down -0.18%, and Japan’s Nikkei Stock 225 up +0.26%.
March 10-year T-notes (ZNH25) rose by +6 ticks, with the 10-year T-note yield falling -3.3 bp to 4.398%. European bond yields were mixed, with the 10-year German bund yield rising +0.8 bp to 2.477% and the 10-year UK gilt yield falling -0.7 bp to 4.564%. Swaps are pricing in a 98% chance of a -25 bp rate cut by the ECB at the March 6 policy meeting.
Among US stock movers, Nvidia (NVDA) fell about -3%, while Apple (AAPL) rose +0.86% after announcing plans to hire 20,000 new employees in the US. Berkshire Hathaway (BRK.B) surged more than +4% on strong Q4 earnings, and Nike (NKE) rose over +5% on a rating upgrade. Palantir Technologies (PLTR) fell more than -10% amid concerns about US defense spending cuts.
— news from Nasdaq