February 25th Market Overview

Happy Tuesday.

Stocks extend their losing streak as consumer confidence delivers a crushing blow to the market today. The S&P 500 marks its fourth consecutive red session. All eyes remain fixed on $NVDA's earnings report tomorrow.

Trade tensions ratchet higher as President Trump confirms Canada and Mexico tariffs will proceed, sending investors scrambling toward the safety of Treasury bonds.

 A personal ask from me - Consider checking out today's sponsor - it buys me a sip of coffee. It costs you $0, takes seconds, and keeps these insights coming daily (that's my pitch)

Let's dig in...

Market Overview

Key Market Drivers

1. Deteriorating Consumer Health: The Conference Board’s consumer confidence index plummeted to 98.3 in February, well below expectations of 102.3, marking the largest monthly decline since August 2021.
   

2. Trade Tension Escalation: President Trump announced tariffs on Canada and Mexico “will go forward” after the current 30-day moratorium ends. White House senior trade counselor Peter Navarro emphasized progress on fentanyl trafficking is critical in these negotiations.
   

3. Flight to Safety: Investors sought refuge in Treasury bonds, pushing the benchmark 10-year yield below 4.3% to its lowest level since December. Bitcoin fell below $90,000, now trading nearly 20% below its all-time high reached on Trump’s inauguration day.
   

Fall in love with BILL, get a $200 Saranoni blanket

BILL + controllers = ❤️

We're sharing the love! Take a demo of BILL Spend & Expense and get a $200 gift card to Saranoni Luxury Blankets & Gifts.¹

"Switching to BILL for our credit cards has been such an amazing decision for us! After transitioning from a competitor to BILL Spend & Expense 6 months ago, we’ve already received over $10,000 in cash-back rewards—something our previous provider never came close to offering.” – Madolen Gossett, Controller @ Saranoni

Request a demo

¹Terms and Conditions apply. See offer page for details.
Card issued by Cross River Bank, Member FDIC, and is not a deposit product.

Stock Spotlight

• $TSLA: ▼ 8.8% - Tesla shares push the company’s market capitalization below $1 trillion. The stock trades at its lowest point since November 2024, down approximately 35% from its December 17, 2024 record close.
  

• $PLTR: ▼ 3% - Palantir now more than 30% off recent highs following CEO Alex Karp’s stock sale plan and Bloomberg’s report highlighting Pentagon budget cut concerns. Down about 13% for the week.
  

• $HIMS: ▼ 27% - Hims & Hers Health gross margin results fell short of expectations (77% vs 78.4% expected) despite beating earnings and revenue forecasts. On track for its worst day ever.
  

• $NVDA: ▼ 1.8% - Nvidia shares decline ahead of Wednesday’s earnings report. JPMorgan technical analyst Jason Hunter suggests the stock “is range bound for now” after stalling following its rebound from the January DeepSeek sell-off.
  

• $HD: ▼ 2% - Home Depot falls despite beating earnings expectations with same-store sales rising 0.8%, marking the first increase in over two years. Margin concerns put pressure on profits.

Big Name Updates

• $AAPL: Announces $500 billion investment in the United States, creating 20,000 new jobs focused on AI and advanced manufacturing. Widely viewed as a strategic move to mitigate potential tariff threats.
  

• $NVDA: Reports securing 70% of TSMC’s advanced packaging capacity for 2025. Rosenblatt reiterates buy rating with $220 price target, expecting a “modest beat and raise” this week with Blackwell shipments confirmed to start in Q4.
  

• $MSFT: Rumors of data center investment cuts refuted during a Jefferies meeting. Microsoft clarified investments are made based on 10-year demand forecasts, which remain strong.
  

• $GS, $WFC, $JPM: Major bank stocks fell more than 1% each as recession concerns mount, adding to financial sector pressure.

Other Notable Company News

• $HOOD: SEC closes investigation into Robinhood Crypto without taking action.
  

• $SNOW: Bernstein raises price target to $161 from $154 ahead of earnings, citing a “reasonably comfortable setup” for Q4 results.
  

• $NKE: Jefferies upgrades to Buy from Hold with price target increased to $115 from $75, highlighting CEO Hill’s efforts to address product and distribution issues.
  

• $BABA: Morgan Stanley upgrades to Overweight with $180 price target from $100. The company plans to invest $53 billion in cloud and AI infrastructure over 3 years, China’s largest private investment in the sector.
  

• $TWLO: Morgan Stanley upgrades to Overweight from Equal Weight with $160 price target, citing attractive entry point and expected reacceleration.

Sector Watch

Bond Market

• Treasury yields down significantly as investors sought safety
  

• Benchmark 10-year Treasury yield dropped below 4.3% to its lowest level since December
  

• This movesuggests growing concerns about economic slowdown rather than inflation

Policy Watch

• Trump administration preparing to escalate semiconductor controls aimed at China, according to Bloomberg News
  

• White House officials met with Japanese and Dutch chipmakers to coordinate pressure on China's chip industry
  

• President Trump signed a memo directing CFIUS to tighten restrictions on Chinese investments in key U.S. sectors, citing national security concerns
  

What to Watch

1. NVIDIA Earnings (Wednesday): The market’s reaction to $NVDA's results will be crucial for tech sentiment.

   • Watch for guidance on AI chip demand and supply chain constraints

   • Comments on Blackwell shipment timeline will be closely scrutinized
     

2. Consumer Data: Following today’s weak confidence numbers, upcoming personal spending and income reports gain importance.

   • Further deterioration could accelerate calls for Fed rate cuts

   • Signs of resilience might help stabilize recent market losses
     

3. Tariff Developments: The 30-day moratorium on Canadian and Mexican tariffs ends next week.

   • Watch for last-minute negotiations or compromises

   • Implementation details and potential retaliatory measures could impact multiple sectors
     

4. Bank Stocks: Financial sector weakness signals growing recession concerns.

   • Monitor credit trends and management commentary on loan performance

   • Watch for any shifts in Fed rate cut expectations that could impact bank margins