Market Overview

The stock market resumed its downward trend following a brief recovery the previous day. Recent sessions have been dominated by headlines concerning US trade policy, affecting equity markets significantly. The S&P 500 briefly fell below its 200-day moving average of 5,730, hitting a session low of 5,711. It managed to close slightly above this crucial technical level. Meanwhile, the Nasdaq Composite dropped by 2.6% and the Russell 2000 by 1.6%, both moving further below their 200-day moving averages. The Nasdaq Composite is now 10.4% below its all-time high reached on December 16, placing it in correction territory. The S&P 500 is 6.6% below its all-time high following today's broad market retreat.

Trade Policy and Market Reaction

The market attempted a recovery mid-morning after Commerce Secretary Lutnick announced on CNBC that all USMCA-compliant goods and services would be exempt from new tariffs for one month. However, this recovery was short-lived. By the afternoon, after President Trump signed the executive order detailing the exemptions, the market resumed its decline. Approximately 62% of Canadian goods and 50% of Mexican goods remain subject to tariffs, with exempt goods facing tariffs again starting April 2.

Sector Performance

Mega caps and chipmakers experienced significant impacts, reflecting a continued unwinding of momentum trades. NVIDIA (NVDA, Financial) declined notably by 5.7%, while Marvell Technology (MRVL) saw a sharp drop of 19.8% due to guidance not meeting high expectations.

Year-to-Date Performance

• Dow Jones Industrial Average: +0.1% YTD
• S&P 500: -2.4% YTD
• S&P Midcap 400: -4.9% YTD
• Nasdaq Composite: -6.4% YTD
• Russell 2000: -7.3% YTD

Economic Data Review

• January Trade Balance: -$131.4 billion (consensus: -$93.5 billion); Prior revised to -$98.1 billion from -$98.4 billion. The increase in imports, driven by anticipated tariff actions, is expected to impact Q1 GDP forecasts negatively.
• Weekly Initial Claims: 221K (consensus: 234K); Prior 242K. Weekly Continuing Claims: 1.897 million; Prior revised to 1.855 million from 1.862 million. The reduced level of initial claims, a leading indicator, eases concerns about potential labor market weakening.
• Q4 Productivity-Rev.: 1.5% (consensus: 1.2%); Prior 1.2%. Q4 Unit Labor Costs - Rev.: 2.2% (consensus: 3.0%); Prior 3.0%. Higher productivity and lower unit labor costs positively influence market sentiment.
• January Wholesale Inventories: 0.8% (consensus: 0.7%); Prior revised to -0.4% from -0.5%.

Upcoming Data

Market participants are awaiting the Employment Situation Report for February at 8:30 ET, followed by the January Consumer Credit report at 3:00 ET.

Global Markets

• Europe: DAX +1.6%, FTSE -0.8%, CAC +0.3%
• Asia: Nikkei +0.9%, Hang Seng +3.3%, Shanghai +1.2%

Commodities

• Crude Oil: +0.16 @ 66.43
• Natural Gas: -0.14 @ 4.32
• Gold: +0.30 @ 2926.00
• Silver: +0.19 @ 33.313
• Copper: unchanged @ 4.80

NVDA,MRVL

Guru Stock Picks

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• Add in UAN by 0.25%

Today's News

Broadcom (AVGO, Financial) shares experienced a significant rise of 8% in extended trading after the company reported first-quarter results that exceeded expectations. The semiconductor giant highlighted robust growth in AI semiconductor solutions, with Q1 AI revenue climbing 77% year-over-year to $4.1 billion. The company anticipates continued strength in AI semiconductor revenue, projecting $4.4 billion in Q2, driven by investments from hyperscale partners.

Nvidia (NVDA, Financial) is set to play a crucial role in President Trump's Stargate Project, which aims to advance artificial intelligence capabilities. The project, led by OpenAI, Oracle (ORCL, Financial), and SoftBank (SFTBY), will require approximately 64,000 Nvidia GB200 GPUs by 2026. This initiative underscores the growing demand for Nvidia's high-performance graphics processing units, with an initial delivery of 16,000 GPUs expected by summer.

Costco (COST, Financial) saw a slight dip in postmarket trading despite reporting a 6.8% increase in comparable sales for its fiscal second quarter. The retailer continues to gain market share from competitors like Walmart (WMT) and Target (TGT, Financial) through strong performance in both physical and e-commerce sales. However, its membership fee income fell short of consensus expectations, contributing to the stock's modest decline.

Alphabet (GOOGL, Financial) faces scrutiny as the House Judiciary Committee issued a subpoena seeking information on potential collusion with the Biden-Harris Administration to censor lawful speech. The committee aims to investigate Alphabet's involvement in the federal government's censorship initiatives, with a focus on YouTube's participation.

ZIM Integrated Shipping Services (ZIM, Financial) rose 6.8% amid speculation of a potential management-led buyout. CEO Eli Glickman is reportedly considering a bid for the Israel-based shipping company, although it remains uncertain whether the board will entertain the offer. ZIM is set to release its Q4 results soon, which could further impact its stock performance.

Venture Global (VG, Financial) announced an $18 billion expansion of its Plaquemines LNG plant in Louisiana, increasing its capacity to 45 million metric tons per year. This expansion will make Plaquemines the largest LNG export facility in North America. The company's total investment in U.S. projects will exceed $75 billion, highlighting its commitment to bolstering the U.S. balance of trade through LNG exports.

Intuitive Machines (LUNR, Financial) shares faced volatility as uncertainty loomed over the operational status of its lunar lander. Despite reports of a successful landing, the lack of communication from the probe led to a 20% drop in LUNR shares. The craft carried NASA technology demonstrations and remains a focal point for the company's scientific endeavors.

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