Market Performance

Today's trading session was mixed following the previous day's CPI-induced surge. The Nasdaq Composite fell by 0.9%, while the Dow Jones Industrial Average and the S&P 500 both decreased by 0.2%. The Russell 2000 managed a slight gain of 0.2%.

Economic Data and Market Impact

• Retail sales and weekly jobless claims indicated continued strength in the economy and labor market.
• Treasury Secretary nominee Scott Bessent emphasized the need for fiscal responsibility and pro-growth policies.
• Fed Governor Waller suggested the possibility of 3-4 rate cuts this year, contingent on data.

Treasury yields declined following Waller's remarks, with the 10-year yield dropping five basis points to 4.61% and the 2-year yield falling two basis points to 4.24%.

Equity Market Challenges

Despite the economic data, equities struggled due to technical resistance after the S&P 500 failed to stay above its 50-day moving average (5,962) and losses in key stocks. Notable declines included:

• Apple (AAPL, Financial) fell 4.0% to 228.26
• NVIDIA (NVDA, Financial) decreased 2.0% to 133.57
• Tesla (TSLA) dropped 3.4% to 413.82
• Amazon.com (AMZN, Financial) lost 1.2% to 220.66
• Meta Platforms (META) declined 0.9% to 611.30
• Microsoft (MSFT, Financial) slipped 0.4% to 424.58

Earnings Reports

Some companies reported earnings that exceeded expectations but still traded lower:

• Bank of America (BAC) fell 1.0% to 46.64
• US Bancorp (USB) dropped 5.6% to 48.03

Conversely, Morgan Stanley (MS) rose 4.0% to 135.81, reaching a new 52-week high. UnitedHealth (UNH, Financial) stumbled 6.0% to 510.59 after reporting Q4 and year-end results with a higher medical care ratio.

Sector Performance

Losses in some key stocks impacted the following sectors:

• Information Technology: -1.3%
• Communication Services: -1.0%
• Consumer Discretionary: -0.9%

The remaining eight sectors experienced gains ranging from 0.4% (health care) to 2.6% (utilities).

Today's News

Apple (AAPL, Financial) experienced a significant drop in its shares, falling by 4% after losing its leading position in the Chinese smartphone market. According to Canalys, Apple shipped 42.9 million smartphones in China in 2024, marking a 17% decrease from the previous year. Vivo and Huawei have overtaken Apple, with Vivo capturing a 17% market share and Huawei seeing a 37% growth in shipments.

Nvidia (NVDA, Financial) is adapting its advanced packaging needs with Taiwan Semiconductor Manufacturing Company (TSM) for its latest AI chip, Blackwell. CEO Jensen Huang confirmed that the company will largely utilize CoWoS-L technology, which offers cost benefits and enhanced design flexibility, over CoWoS-S. This shift reflects Nvidia's ongoing innovation in chip design and packaging.

UnitedHealth Group (UNH, Financial) faced a tumultuous year, culminating in a Q4 revenue miss that led to a sharp decline in its stock. The company dealt with a major cyberattack and rising medical expenses, which contributed to its challenges. Despite this, UnitedHealth managed to exceed forecasts in earlier quarters, showcasing resilience amid adversity.

Amazon (AMZN, Financial) is undergoing restructuring within its Fashion and Fitness group, leading to job cuts affecting approximately 200 employees. This move is part of Amazon's strategy to optimize team structures for innovation and efficiency. The company is committed to supporting affected employees during the transition.

Enphase Energy (ENPH, Financial) saw its shares decline by 3.3% following a downgrade by Truist Securities. The downgrade to Hold from Buy was based on anticipated growth headwinds and competitive pressures in the U.S. market, particularly from Tesla. The analyst expects Enphase's growth to be below current estimates.

Microsoft (MSFT, Financial) announced a price increase for its 365 Family and Personal plans, the first in over 12 years. The $3 monthly hike will include the integration of its AI-powered productivity tool, Copilot, into the plans, providing added value to subscribers.

Chevron Corporation (CVX, Financial) continued its upward trajectory, gaining for seven consecutive sessions. Despite a 3.1% loss in 2024, the stock has shown resilience with a recent 4% rise over the past month. Analysts remain optimistic about Chevron's profitability prospects.

Devon Energy (DVN, Financial) ended its streak of gains with a slight dip, yet the stock has climbed 11% over the previous six sessions. Analysts maintain a bullish outlook on Devon, highlighting its strong profitability prospects despite recent momentum challenges.

Plug Power (PLUG, Financial) and Rivian Automotive (RIVN, Financial) are set to receive significant financing from the Biden administration, with Plug Power securing a $1.7 billion loan guarantee for hydrogen plant development. Rivian is also poised to receive a federal loan to support its manufacturing expansion in Georgia.

Northrop Grumman (NOC, Financial), Booz Allen Hamilton (BAH, Financial), and Rocket Lab (RKLB) are among the top defense stocks favored by analysts at Bank of America as defense spending is expected to grow despite federal budget constraints. The analysts maintain a contrarian view, anticipating continued expansion in defense budgets.

GuruFocus Stock Analysis

• Apple Shares Fall 3% After Losing Top Spot in Chinese Market by Nauman khan
• Lam Research Rises 6.3% Despite Downgrade Amid Trade Policy Concerns by ShantiPutri
• UnitedHealth Group Reports Robust 2024 Financial Results, Sets Ambitious 2025 Outlook by ShantiPutri
• Hindenburg Research to Disband Following Completion of Final Investigations by Faizan Farooque
• NVIDIA Announces New Tools for AI Application Security by Faizan Farooque