Daily Market Recap: Monday Feb 3, 2025
Markets struggled to find footing today as major indices closed lower: Dow (-0.28%), S&P 500 (-0.76%), Nasdaq (-1.20%), and Russell 2000 (-1.28%). While the broader market pulled back, the session ended well off intraday lows. Big tech was mostly weaker, though Meta (META) outperformed.
Sectors under pressure: Autos, semiconductors, homebuilders, machinery, chemicals, rails, regional banks, and retail/apparel.
Outperformers: Healthcare products, managed care, biotech, payments, restaurants, refiners, entertainment, telecom, and media.
Key Drivers Today:
Tariff Shock, but Some Relief: Trump's aggressive tariff announcements over the weekend rattled markets, triggering a global risk-off move. However, a partial reprieve emerged as the administration delayed tariffs on Mexico and Canada in exchange for border security commitments. Reports suggest upcoming talks with China’s President Xi, but Trump is signaling potential further hikes on Chinese imports over fentanyl concerns.
Economic Data Signals Growth but Inflation Worries Persist:
ISM Manufacturing Index jumped to 50.9 (highest since Sept 2022), marking the first expansionary reading in over two years.
Construction spending grew 0.5% MoM, topping expectations.
Inflation remains sticky: Manufacturing prices paid index climbed to 54.9 from 52.5 in December.
Fed Remains Cautious: Fed speakers reiterated patience, signaling no rush to cut rates amid tariff-driven inflation uncertainty. Market expectations for a March rate cut dropped to ~13%, down from 33% a week ago.
Corporate Headlines to Watch:
Apple (AAPL): Scrapped its AR glasses project, raising questions about long-term innovation pipeline.
Meta (META): Considering reincorporation in Texas — potential regulatory and tax implications ahead.
Tyson Foods (TSN): Best quarterly performance in two years, driven by improving chicken margins.
IDEXX (IDXX): Beat estimates and raised guidance; strong organic growth and gross margins.
Archer Daniels Midland (ADM): Reportedly preparing layoffs as part of cost-cutting.
Tempur Sealy (TPX): Jumped after a judge denied the FTC’s attempt to block its MattressFirm acquisition.
Looking Ahead:
Tuesday: JOLTS job openings, factory orders.
Wednesday: ISM services, ADP private payrolls, Treasury refunding.
Thursday: Jobless claims, productivity/unit labor costs.
Friday: Nonfarm payrolls, Michigan consumer sentiment.
Investment Takeaway: Markets are digesting heightened trade risks, inflation stickiness, and Fed caution. AI and semiconductor stocks remain under pressure, but the selloff could create selective buying opportunities in high-quality names with strong fundamentals. As for Trump’s Trade Policies, speculation is rising over whether the tariff approach is a long-term strategy or merely a negotiating tool
How are you positioning your portfolio in this environment? Let us know in the comments.