Daily Market Recap – Wednesday Feb 26, 2025
Stocks Mixed Amid Tariff Uncertainty
U.S. equities finished narrowly mixed on Wednesday, with the S&P 500 (+0.01%) and Nasdaq (+0.26%) managing modest gains after four consecutive declines, while the Dow (-0.43%) slipped. Semiconductors, software, internet stocks, and China tech led the way, with Nvidia (NVDA) and Meta (META) standing out, while Apple (AAPL) and Tesla (TSLA) underperformed. Laggards included consumer staples, managed healthcare, and homebuilders, while copper stocks gained on tariff headlines.
Treasuries extended their recent rally, with yields dropping across the curve, as markets reassessed Federal Reserve rate-cut expectations amid concerns over growth and inflation. The 10-year yield dipped below 4.30%, while the dollar index climbed 0.2%. Gold (+0.4%) gained, Bitcoin (-4.1%) slid to its lowest level since November, and WTI crude (-0.5%) dropped below $70 per barrel.
Trump’s Tariff Threats Spark Market Jitters
Markets turned lower in the afternoon following new tariff threats from former President Trump, who floated a 25% broad tariff on EU imports and confirmed plans to implement 25% tariffs on Canadian and Mexican goods by April 2. This added to existing concerns over inflationary pressures, potential growth slowdowns, and geopolitical uncertainty.
On the earnings front, Nvidia (NVDA) was in focus post-close, with expectations for another “beat and raise” quarter, while reports surfaced that Meta (META) is considering a $200 billion AI data center expansion, reinforcing continued optimism around AI infrastructure spending. Meanwhile, positive earnings takeaways from Workday (WDAY), Intuit (INTU), TJX (TJX), and Lowe’s (LOW) helped lift sentiment.
Housing Market Weakness Continues
Economic data showed new home sales plunged 10.5% in January, worse than expected, following a string of weaker housing reports, including declines in housing starts and existing home sales. Reports suggest buyers are gaining the upper hand, with rising inventories and moderating demand pressuring home prices. Meanwhile, Treasury auctions continued to see strong demand, with a $44B 7-year note sale stopping through at the lowest yield since September.
Earnings Highlights
Intuit (INTU) +12.6%: Strong tax season start, Credit Karma strength, and disciplined expense management drove a solid beat.
Workday (WDAY) +6.2%: Posted a strong quarter, reaffirming FY26 subscription growth targets despite FX headwinds and guiding for better margins.
Nvidia (NVDA): Post-close earnings expected to showcase continued AI momentum, with hyperscaler capex tailwinds fueling optimism.
Lucid (LCID) -13.6%: Posted a better-than-expected quarter, but 2025 production guidance came in light; CEO stepping aside.
Advance Auto Parts (AAP) -17.8%: Missed gross margin estimates, and Q1 guidance disappointed.
Here’s Our Take
Markets remain trapped between AI-driven optimism and macroeconomic uncertainty. While Fed rate cut expectations have increased, Trump’s aggressive tariff rhetoric, weaker housing data, and geopolitical tensions remain key overhangs. AI stocks and infrastructure names continue to see strong demand, but investors should brace for potential volatility as earnings season progresses and the market digests further economic data.