U.S. Equities Struggle Amid Economic Uncertainty
U.S. equities faced a challenging session on Tuesday, with the S&P 500 and Nasdaq reaching one-month lows. This marked their fourth consecutive day of declines. Consumer confidence data showed that Americans are growing increasingly concerned about the economic impact of President Trump’s policies, particularly the threat of tariffs on Canada and Mexico. This uncertainty, coupled with disappointing forecasts from major tech companies such as Microsoft, Amazon, and Alphabet, weighed heavily on investor sentiment.
- Nvidia: Shares of Nvidia retreated nearly 3% ahead of the company’s fourth-quarter earnings announcement, with investors closely watching for signs of growth in the AI chip market.
- Bitcoin: Bitcoin’s weakness also contributed to the decline in crypto stocks.
- Zoom Communications: Zoom saw a sharp drop after releasing a poor revenue outlook.
- Li Auto: On a more positive note, Li Auto surged by 13.2% after unveiling its first electric SUV.
Housing Market Insights
The housing market showed mixed signals as the S&P CoreLogic Case-Shiller 20-City Home Price Index increased by 4.5% in December, continuing its rise more than expected. This uptick in home prices is likely to sustain pressure on inflation, especially in the shelter component, which is a significant factor in the Federal Reserve’s preferred inflation measure. Consumer confidence also took a hit in February, with the Conference Board’s index dropping to 98.3, reflecting growing concerns about job security and future income.
Latest Market and Economic Update
Asian Markets and Geopolitical Concerns
Most Asian markets experienced declines on Wednesday, driven by concerns over U.S. President Trump’s tariff threats and signs of a slowing global economy. However, Hong Kong’s markets rose sharply on optimism surrounding China’s AI sector.
- Tech Stocks: Tech stocks, particularly those with U.S. exposure, were under pressure ahead of Nvidia’s earnings report.
- Geopolitical Tensions: Broader Asian markets remained subdued due to weak U.S. data and ongoing geopolitical tensions.
U.S. Economic Data and Investor Sentiment
U.S. equity futures rose overnight as investors awaited Nvidia’s earnings report and key economic data, including the fourth-quarter GDP and PCE price index. Despite Tuesday’s losses for the S&P 500 and Nasdaq, attention now shifts to whether Nvidia’s results can provide a fresh catalyst amidst ongoing concerns about the sustainability of the AI rally.
European Market Overview
European Stocks Hold Steady
European equities closed largely flat on Tuesday. The STOXX 50 dipped 0.1%, while the STOXX 600 gained 0.2%, as markets weighed the impact of higher government spending and U.S. trade barriers.
- Automakers: Volkswagen, BMW, and Mercedes-Benz saw gains ranging from 1.5% to 3.6%.
- Banks: Banks like UniCredit and BNP Paribas rose nearly 2%, while tech stocks ASML and Infineon fell around 3% due to U.S. tariff threats on China.
U.S. Dollar and Oil Prices
- The U.S. dollar traded near 106.3 on Wednesday, marking its lowest level in 11 weeks, weighed down by softening economic data and declining Treasury yields. Against the euro, the dollar weakened further, with the single currency trading at 1.0498.
- Oil Prices: Brent crude rose to $73.27 a barrel, while WTI gained to $69.17, though both contracts remained near two-month lows amid concerns over cooling global economic growth and the impact of additional U.S. tariffs.
Equities on the Move
Supermicro
Shares of Supermicro surged 21.7% in after-hours trading on Tuesday after the company filed its delayed financial reports, ensuring compliance with NASDAQ requirements. The filings followed the resignation of its former accounting firm, Ernst & Young, but came alongside strong fiscal 2026 revenue guidance of $40 billion, driven by the ramp-up of its NVIDIA Blackwell servers. The stock has gained 36% since this update.
Home Depot
Home Depot’s fourth-quarter net sales rose 14% to $39.7 billion, surpassing Wall Street’s expectations. However, the company forecast 1% growth in comparable sales for the 2025 fiscal year, which fell short of analysts’ expectations of 1.65% growth, citing ongoing pressure from higher interest rates and caution around future economic conditions.
Cava Group
Cava Group forecasted annual same-store sales growth of 6% to 8%, below analyst expectations, due to weak demand for dining out and inflationary pressures. However, the company exceeded fourth-quarter estimates with a 21.2% rise in same-restaurant sales, generating $227.4 million in revenue.
Other Company Moves
- Instacart: Reported fourth-quarter results that missed Wall Street expectations, with adjusted earnings of $0.53 per share and revenue of $883 million, while gross transaction value rose 10% to $8.65 billion.
- Cleveland-Cliffs: Reported a wider-than-expected Q4 loss, with revenue falling short of Wall Street estimates and an adjusted EBITDA loss of $81 million. The company posted a significant cash burn of $677 million.
- Heidelberg Materials: Reported stronger-than-expected Q4 results, with revenue up 6% year-on-year and EBITDA rising 13%.
- First Solar: Reported a 13% increase in Q4 profit, posting a net income of $393 million and raising its sales forecast to between $5.3 billion and $5.8 billion.
- Tesla: Shares dropped 8.4% following a sharp decline in European and UK sales, which fell 45.2% in January.
- Meta Platforms: Is reportedly in talks to build a new data centre campus for its AI projects, with potential costs exceeding $200 billion.
- Eli Lilly: Reduced the price of its weight-loss drug Zepbound by $50 or more per vial.
- Unilever: Ousted CEO Hein Schumacher, replacing him with finance chief Fernando Fernandez.
- PayPal: Outlined its growth targets for 2025-2027, focusing on transaction margin and non-GAAP EPS growth.
Alcoa
Alcoa warned that Trump’s proposed 25% tariff on aluminum imports could cost 100,000 jobs and would not be enough to prompt the company to increase U.S. production, despite lobbying for an exemption on Canadian imports.
Rocket Lab
Shares of Rocket Lab dropped 10% following a critical short report by Bleeker Street Research, which raised concerns about the company’s financial health and the timeline for its Neutron rocket.
Tempus AI
JP Morgan downgraded Tempus AI to Neutral from Overweight, citing concerns about the company’s valuation after a significant rally, despite strong Q4 results.
Upcoming Economic Data & Events
Key economic data releases in the U.S. for today include building permits, new home sales, and crude oil inventories. Additionally, earnings reports from major companies such as Nvidia, Salesforce, Snowflake, eBay, Deutsche Telekom, Lowe’s, CRH, and Stellantis will also be in focus.
For more information visit https://cc.com.mt/. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning investments or investment decisions, or tax or legal advice.
