A tech malaise is threatening to set in, and only one company has the potential to ride to the rescue -- Nvidia.

The problem for the stock market is that the AI chip maker and its earnings are unpredictable and may end up making things worse.

The warning signs are starting to emerge. Highflying stocks such as Palantir, Vistra, and Constellation Energy have all tumbled in recent days, suggesting valuations have become stretched and investors have become nervous.

The so-called Magnificent Seven technology stars are also struggling -- Meta Platforms and Apple are the only members of the group up over the past month. Four of the remaining five are down between 9% and 10%, while Tesla has fallen 19%.

The tech-heavy Nasdaq Composite has now fallen for three consecutive days. Reports that Microsoft has canceled some data center leases added to recent woes, as did suggestions that President Donald Trump wants to toughen up semiconductor curbs on China.

The importance of Nvidia's earnings is often overstated but this time the broader tech sector desperately needs the company to pull through with yet another blowout report.

Investors are clearly nervous heading into the company's earnings -- the stock has fallen 7% in the past two trading days and was pointing lower again early Tuesday. The typical buzz of anticipation has been replaced by apprehension.

All may not be lost, though. Nvidia has had to contend with high expectations for years now, with only significant earnings beats passing muster with investors. The recent weakness may have lowered the bar slightly.

Moreover, the last time the company had a worse run leading into earnings may offer some hope. The stock fell 9% in the four days leading into its fourth-quarter results a year ago, before surging 16% after earnings were released -- and back then the Nasdaq jumped 3%.

The market needs a repeat, but at this point investors would make do with far less.

-- Callum Keown

***

Apple's Latest $500 Billion Pledge Could Soften Tariff Blow

Apple's plans to spend more than $500 billion to boost its U.S. manufacturing capacity could help soften the blow from the Trump administration's tariffs, seeing as the iPhone maker builds most of its smartphones in China. It could also help Apple gain tariff exemptions, as it did during the first Trump administration.

   -- Wedbush analyst Dan Ives called it a strategic move by CEO Tim Cook to 
      diversify Apple's manufacturing strategy and ensure "smoother waters for 
      Cupertino." The plans include a 250,000-square-foot factory in Houston 
      for artificial intelligence and hiring 20,000 people over four years. 
 
   -- As have other tech leaders, Cook recently met with President Donald 
      Trump. Cook said the spending could help write "an extraordinary new 
      chapter in the history of American innovation." Trump said on social 
      media that it shows "faith in what we are doing." 
 
   -- But it's unclear how much of the $500 billion is already planned 
      spending. Apple in 2018 promised $350 billion in U.S. investments, 20,000 
      new jobs, and a campus in Austin, Texas. The company committed $80 
      billion more in 2021, including for a North Carolina research campus. 
 
   -- Apple said its operations support 2.9 million American jobs, a number 
      that includes suppliers. The current targeted job additions won't be 
      manufacturing jobs, but engineers for research and development, silicon 
      engineering, software development, and AI and machine learning. 

What's Next: Apple said that the latest pledge also includes its work with thousands of suppliers in all states, direct employment, Apple Intelligence infrastructure and data centers, corporate facilities, and Apple TV+ productions. Much of this spending was already planned.

-- George Glover, Adam Levine, and Janet H. Cho

***

Robinhood Is Latest to See SEC Abandon Its Crypto Case

Robinhood Markets, the trading platform favored by meme stock enthusiasts, has had ambitions in cryptocurrency. It is now the second company to have a crypto-related case dropped by the Securities and Exchange Commission under a decidedly more crypto-friendly Trump administration.

   -- The SEC told the company it had wrapped up the investigation and didn't 
      intend to move forward with an enforcement action, Robinhood said. The 
      SEC wouldn't comment, but the matter ends about a year after Robinhood 
      received a warning from the agency about its investigation. 
 
   -- The SEC has long argued that cryptocurrencies are securities subject to 
      its oversight. But President Donald Trump's pick to head the SEC, Paul 
      Atkins, is a backer of the crypto industry. The agency has revamped its 
      antifraud unit, announcing last week the creation of the cyber and 
      emerging technologies group. 
 
   -- Also last week, the SEC dropped its case against crypto exchange Coinbase 
      Global after accusing it in 2023 of acting as an unregistered broker. 
      Robinhood hopes to expand its crypto offerings this year, having added to 
      its crypto platform since the election. It could add more digital assets 
      this year. 
 
   -- SEC Commissioner Hester Peirce has called for public input on the 
      agency's approach to crypto. Michael Saylor, CEO of crypto investing 
      company MicroStrategy, which just bought another 20,356 Bitcoins, 
      supports a strategic Bitcoin reserve in the U.S. 

What's Next: Though it started out targeting retail investors, Robinhood is also buying cryptocurrency exchange Bitstamp, which should enable it to serve the institutional market. The acquisition is expected to close in the first half of this year.

-- Emily Dattilo and Andrew Welsch

***

Bitcoin Price Fell Below $90,000 as Gloom Engulfs Cryptos

Bitcoin fell to a three-month low early Tuesday as investors avoided riskier assets and sold down XRP and other crypto assets. The moves came after U.S. technology stocks fell again Monday with the mood filtering through to cryptocurrencies.

   -- The price of Bitcoin fell below $90,000 for the first time since November, 
      dropping 6% to $87,986. The world's largest digital asset is now around 
      6% down so far in 2025 and more than 16% down over the past month. 
 
   -- The Nasdaq Composite closed 1.2% lower, its third consecutive day of 
      losses. The tech malaise continued early Tuesday with Nasdaq futures 
      pointing lower and cryptocurrencies seem to be following suit. 
 
   -- The timing for the slump was unfortunate for MicroStrategy, the Bitcoin 
      investment company now doing business as Strategy. It revealed in a 
      regulatory filing Monday that it had continued buying more of the 
      cryptocurrency. 

What's Next: Traders are becoming increasingly focused on global macroeconomic and geopolitical developments -- and more aligned with the movements of the U.S. stock market. The shifting of the world order means heightened uncertainty and volatility in markets and risk assets.

-- Callum Keown and Rupert Steiner

***

Starbucks Braces for Corporate Layoffs in Turnaround Effort

Starbucks is initiating one of the largest layoff rounds in its history as it tries to revamp operations under new CEO Brian Niccol. It is cutting 1,100 corporate jobs and leaving hundreds left unfilled, seeking to improve sales after high prices, boycotts, and long wait times drove customers away.

   -- The layoffs come after Starbucks has spent the past month evaluating the 
      role, structure, and size of its global support teams. The coffee chain 
      said cuts wouldn't affect workers in its cafes, or in roasting, 
      manufacturing, warehousing, and distribution. 
 
   -- "We are simplifying our structure, removing layers and duplication and 
      creating smaller, more nimble teams," Niccol wrote. "Our intent is to 
      operate more efficiently, increase accountability, reduce complexity and 
      drive better integration." 
 
   -- Starbucks is bringing back its condiments bars, handwritten notes on cups, 
      and ceramic mugs, adding more comfortable seating, and trimming about 30% 
      of its menu offerings. It also reversed its policy, to again restrict its 
      store bathrooms to paid customers. 
 
   -- Niccol said in a letter posted to Starbucks' website that managers at a 
      certain level and above in North America need to work in their Seattle or 
      Toronto offices at least three days a week. Hiring for partners will 
      require locating in Seattle or Toronto with certain exceptions. 

What's Next: Starbucks, which had 16,000 corporate employees in September, said it would notify workers about broader structural changes by the end of the week. Laid-off workers will get pay and benefits until at least May 2.

-- Evie Liu and Janet H. Cho

***

Hims & Hers Still Envisions a Role in Weight Loss Treatment

Telehealth provider Hims & Hers Health is under pressure because of uncertainty about its ability to sell knockoff versions of Novo Nordisk's popular weight loss drugs. The company said sales could be curtailed now that a shortage of the drugs is over, and shares tumbled nearly 20% despite an earnings beat.

   -- Days after the Food and Drug Administration declared an end to the 
      shortage of Novo's semaglutide drugs, Hims & Hers said sales of its 
      compounded semaglutide could be constrained once its current inventory 
      has been sold. That's because compounding pharmacies have to stop making 
      the drugs by May 22. 
 
   -- But Hims & Hers CEO Andrew Dudum is focused on expanding personalized 
      treatments, supplements, and medications for conditions including low 
      testosterone and menopause. Dudum expects Hims & Hers to continue weight 
      loss drug sales without copying existing drugs. 
 
   -- Hims reported fourth-quarter earnings of 11 cents a share and revenue of 

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February 25, 2025 06:49 ET (11:49 GMT)

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