On Tuesday, the S&P 500 Index ($SPX) experienced a decline of -0.47%, whereas the Dow Jones Industrials Index ($DOWI) saw a modest increase of +0.37%. In contrast, the Nasdaq 100 Index ($IUXX) fell sharply by -1.24%. Additionally, March E-mini S&P futures (ESH25) dropped by -0.42%, and March E-mini Nasdaq futures (NQH25) decreased by -1.20%.
The tech sector continued to show weakness, significantly impacting the broader market as the Nasdaq 100 Index extended its losses with a -1.24% drop on Tuesday. This follows a -2.06% loss last Friday and a -1.11% decline on Monday. The market's risk-off sentiment was influenced by concerns over tariff risks and declining US consumer confidence.
Reports of the Trump administration's plans to impose new restrictions on chip sales to China added to the market's cautious tone. However, some support for the US stock market was observed due to a sharp -11 basis point decline in the 10-year T-note yield. The Conference Board's US consumer confidence index saw a sharp decline of -7.0 points to an eight-month low of 98.3, missing expectations of a drop to 102.5. This marked the largest decrease in 2-1/2 years and the third consecutive month of decline.
The risk-off sentiment extended to the cryptocurrency market, with Bitcoin (^BTCUSD) falling over -6% and Ether (^ETHUSD) dropping more than -5% on Tuesday. These declines added to Monday's losses of -6%, exacerbated by news of a $1.5 billion Ether hack involving the Bybit crypto exchange and a memecoin scandal linked to Argentina's President Milei.
The Trump administration's plans to tighten chip controls on China and encourage European and Asian countries to follow suit were reported by Bloomberg. Additionally, President Trump announced that US tariffs on imports from Mexico and Canada would proceed as scheduled, with a delay until March 4 due to new border measures. President Trump also directed the US Committee on Foreign Investment to limit China's investment in key sectors such as technology and natural resources.
December saw solid increases in US home prices, with the S&P Corelogic index rising +0.52% month-over-month and +4.48% year-over-year, surpassing expectations. Looking ahead, investors are focused on Nvidia's earnings report and a busy US economic calendar, including the Q4 GDP report and the Fed's preferred inflation measure, the PCE price index.
March 10-year T-notes (ZNH25) rose +22 ticks, with the 10-year T-note yield falling by -10.8 basis points to 4.293%. Meanwhile, European bond yields also declined, with the 10-year German bund yield falling by -2.0 basis points and the UK gilt yield by -5.5 basis points.
All the Magnificent Seven stocks closed lower, with Tesla (TSLA) suffering the largest loss of over -8% due to declining sales in Europe. Chip stocks such as Nvidia (NVDA) and Marvell Technology (MRVL) also experienced declines. In the crypto sector, stocks like MicroStrategy (MSTR) and Coinbase (COIN) faced sharp declines. Conversely, restaurant stocks like Darden Restaurants (DRI) saw gains following a plea to exempt food and drinks from tariffs.
The market anticipates several earnings reports, including from Verisk Analytics Inc (VRSK), NRG Energy Inc (NRG), and Nvidia Corp (NVDA). Investors are also watching for key economic data and Nvidia's earnings, which could influence market sentiment.
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