Daily Market Recap – Monday Feb 10, 2025
Stocks Rebound After Friday’s Selloff
U.S. equities finished higher on Monday, reversing some of Friday’s losses, with the S&P 500 up 0.67%, the Dow gaining 0.38%, and the Nasdaq leading with a 0.98% increase. Big tech stocks were mostly positive, with Nvidia (NVDA) extending its recent gains, while industrial metals, software, homebuilders, energy, and China tech outperformed. Meanwhile, banks, credit card companies, investment banks, life sciences, airlines, and travel-related stocks lagged. The Treasury yield curve steepened, the dollar index rose 0.3%, and gold surged 1.6% to settle above $2,900/oz for the first time. Bitcoin futures gained 1.9%, while WTI crude oil climbed 1.9% as well.
Market Drivers: Rate Relief, Inflation Data, and AI Optimism
The market’s rally lacked a single catalyst but benefited from rate relief on the front end of the Treasury curve, better-than-expected inflation data from the NY Fed survey, and ongoing optimism around AI and semiconductor growth, despite concerns over DeepSeek and AI capex trends. Investors also pointed to a resilient U.S. macroeconomic backdrop, broadening earnings growth, strong retail buying, and hedge fund participation as additional bullish factors. However, Trump’s trade policy remains a major overhang, with his newly announced 25% tariffs on steel and aluminum imports, anticipated reciprocal tariffs, and Republican divisions over tax policy creating uncertainty.
Economic Updates and Fed Watch
The New York Fed’s latest Survey of Consumer Expectations showed year-ahead and three-year inflation expectations holding steady at 3.0%, a contrast to Friday’s University of Michigan survey, which indicated a sharp rise in inflation expectations. However, respondents reported a deterioration in their current financial situations, adding to consumer sentiment concerns. The focus now shifts to a busy week for economic data, including NFIB small business optimism and Fed Chair Powell’s testimony before Congress on Tuesday, the January CPI report on Wednesday, PPI and jobless claims on Thursday, and retail sales and industrial production data on Friday.
Corporate Highlights and Earnings Reactions
TSMC (TSM) guided Q1 revenue to the lower end of its prior range but kept its full-year outlook intact.
T-Mobile (TMUS) announced a July launch for its satellite-to-cell service, powered by SpaceX’s Starlink, at $15 per month.
McDonald's (MCD) posted strong guest counts that helped offset lower average check sizes.
Disney (DIS) executives reportedly expressed concern over steep price increases at its theme parks, which may have driven away customers.
Charles Schwab (SCHW) was under pressure after TD Bank (TD) announced plans to sell its entire equity stake in the company.
BP (BP) shares climbed after reports that activist investor Elliott has built a stake in the company.
Rockwell Automation (ROK) posted better-than-expected earnings and strong free cash flow, despite a slight trim to revenue growth guidance.
Monday.com (MNDY) saw a 26.5% surge after Q4 results beat expectations, though management flagged FX headwinds and weaker free cash flow guidance.
Notable Gainers & Decliners
Gainers:
Cleveland-Cliffs (CLF) +17.9%: Benefited from Trump’s steel and aluminum tariff announcement.
Mobileye (MBLY) +11.8%: Upgraded by Bank of America and announced Lyft (LYFT) partnership for robotaxis in 2026.
Lyft (LYFT) +6.7%: Announced its driverless ride-hailing service using MBLY technology in Dallas.
BP (BP) +6.7%: Boosted by reports of activist Elliott taking a stake in the company.
McDonald's (MCD) +4.8%: Guest traffic helped comps beat expectations, despite concerns about lower check sizes.
Decliners:
Semtech (SMTC) -31%: Warned that FY26 sales from CopperEdge may be lower than previously disclosed, citing architecture shifts at a major customer (speculated to be Nvidia).
Edgewell Personal Care (EPC) -9.5%: Missed earnings expectations, citing FX headwinds and weak feminine care sales.
ON Semiconductor (ON) -8.2%: Missed Q4 estimates and issued weak Q1 guidance, with industrial sales lagging.
Incyte (INCY) -7.9%: Posted a Q4 earnings miss, though revenue was slightly better.
Charles Schwab (SCHW) -2.4%: Pressured by TD Bank’s decision to exit its stake in the company.
Investment Takeaways
Markets rebounded Monday, supported by rate relief, stable inflation expectations, and strong demand for AI and semiconductor stocks. However, uncertainty remains around Trump’s evolving trade policy, tax policy debates, and extended valuations in some sectors. Investors will closely watch Powell’s testimony and Wednesday’s CPI report, as inflation expectations remain a key factor in shaping Fed policy. With earnings season still unfolding, key themes to monitor include AI spending, corporate guidance on tariffs, and consumer resilience amid shifting macro trends.