U.S. equities ended mostly lower in a volatile Tuesday session, with the Dow (-1.14%), S&P 500 (-0.76%), and Nasdaq (-0.18%) declining, while the Russell 2000 (+0.22%) managed to post a small gain. The S&P 500 continued flirting with correction territory, now down 9.3% from its Feb. 19 record close, while the Nasdaq remains in a sharp 14% drawdown from its December peak. The market attempted a mid-day bounce, but it lacked conviction, and sentiment leaned toward fading rallies rather than buying dips.
A defensive rotation was visible again, with REITs, utilities, energy, managed care, hospitals, pharma, and homebuilders holding up relatively better. Big tech rebounded slightly, led by TSLA and NVDA, which had been hit hard in the recent selloff. However, cyclical areas, including road and rail, logistics, travel, autos, biotech, and telecom, remained weak. Treasuries sold off, steepening the curve, while the dollar index fell (-0.5%). Gold gained (+0.7%), while Bitcoin rebounded (+5.8%) to reclaim the $80K level after Monday’s deep selloff. Crude oil rose modestly (+0.3%) but gave up intraday highs.
Tariff Uncertainty Continues to Weigh on Sentiment
The market remains focused on Trump 2.0 trade policies, with continued uncertainty around tariff escalations. Today’s key trade-related developments included Trump’s initial plan to double tariffs on Canadian steel and aluminum to 50%, though he later softened his stance following Ontario Premier Doug Ford’s decision to suspend a U.S. electricity surcharge. Canada’s incoming Prime Minister, Mark Carney, pledged retaliatory tariffs with "maximum impact," adding to trade tensions.
Meanwhile, the White House Press Secretary reiterated that the stock market is going through a "period of economic transition," reinforcing concerns that the so-called "Trump put" (any market-friendly intervention) is far from imminent. The broader uncertainty around policy direction is increasingly spilling into corporate earnings, with several companies issuing weaker-than-expected guidance.
Economic Data & Fed Watch
Economic data offered mixed signals:
NFIB Small Business Optimism Index fell to 100.7, down 2.1 points, though it remains above its 51-year average.
The Uncertainty Index rose to 104, its second-highest reading ever, underscoring business concerns about tariffs and broader macro volatility.
JOLTS job openings came in at 7.74M, slightly above expectations, though the prior month was revised lower.
Looking ahead, markets are bracing for key economic prints, including Wednesday’s February CPI, Thursday’s PPI and jobless claims, and Friday’s University of Michigan consumer sentiment report—all of which could further shape the Fed’s rate cut path.
Earnings & Corporate News
Several earnings reports and corporate updates impacted stock performance:
Oracle (ORCL -3.1%) missed on Q3 earnings and revenue and issued weaker Q4 guidance, though management pointed to strong AI-driven RPO growth constrained by capacity limitations.
Delta (DAL -7.3%) negatively preannounced Q1 results, citing weaker consumer and corporate confidenceleading to softer domestic demand. American Airlines (AAL) also fell on guidance cuts, while Southwest (LUV +8.3%) managed to rally after accelerating its $2.5B share buyback and announcing new bag fees.
Kohl’s (KSS -24.1%) missed expectations and cut its dividend by 75%, warning of weaker sales trends.
Ciena (CIEN -2.4%) delivered a strong quarter with a big margin beat, though the company flagged uncertainty around tariffs on its earnings call.
Asana (ASAN -24.2%) plunged after CEO Dustin Moskovitz announced he will step down, creating concerns about leadership transition risk alongside softer revenue guidance.
In M&A activity, Rocket Companies (RKT -15.4%) agreed to acquire Redfin (RDFN +67.9%) in an all-stock deal valued at $1.75B, representing a 115% premium to Redfin’s last closing price.
Notable Gainers
Paymentus (PAY +24.6%): Strong Q4 results and guidance upside, with new enterprise clients driving growth.
Reddit (RDDT +14.4%): Loop Capital highlighted strong ad growth potential and called shares undervaluedafter a 50% slide in the past month.
Southwest Airlines (LUV +8.3%): Despite a reduced Q1 revenue forecast, the stock rose on aggressive cost-cutting and a buyback acceleration.
TXNM Energy (TXNM +6.9%): Reports surfaced that the company is exploring a sale after receiving buyout interest.
Notable Decliners
Arvinas (ARVN -52.7%): Phase 3 trial results met primary endpoint but failed to show statistical significance in a broader patient population.
Asana (ASAN -24.2%): CEO succession concerns and a soft revenue outlook hit shares.
Kohl’s (KSS -24.1%): Weak results, poor FY guidance, and a dividend cut drove a massive selloff.
Delta Air Lines (DAL -7.3%): Cited a macro-driven demand slowdown, lowering guidance.
Verizon (VZ -6.6%): Management warned of intense competition impacting Q1 performance.
Here’s Our Take
Market Sentiment Remains Fragile – With the S&P 500 nearing correction territory (-9.3%) and the Nasdaq in bear market range (-14%), investors remain hesitant to buy dips, especially amid tariff risks and weak corporate guidance. Expect continued volatility in the near term.
Economic Data in Focus – Wednesday’s February CPI report will be a critical test for the market, as investors look for signs of waning inflation that could reinforce expectations for Fed rate cuts later this year.
Trade Policy Uncertainty a Persistent Headwind – The Trump administration’s shifting stance on tariffs is keeping markets on edge. Today’s Canada tariff developments suggest policy shifts may be more fluid than previously assumed, but businesses remain cautious about potential retaliation and global supply chain disruptions.
AI and Tech Stocks Attempt a Rebound – After a brutal selloff on Monday, names like Nvidia (NVDA) and Tesla (TSLA) bounced back. However, AI-related stocks remain under scrutiny amid concerns of an overheated sector and supply constraints.
Stock Selection Matters More Than Ever – As seen with Oracle (ORCL), Asana (ASAN), and Kohl’s (KSS), even solid businesses can suffer amid execution risks, weak guidance, and macro pressures. Meanwhile, companies executing well (Paymentus, Southwest, Reddit) are seeing pockets of strength despite the broader market turbulence.
With volatility set to persist, investors should remain defensive, focus on high-quality names, and look for opportunities in oversold sectors where fundamentals remain intact.