The S&P 500 Index fell -0.29% on Monday, while the Dow Jones Industrials Index rose +0.12%. The Nasdaq 100 Index declined -0.92%, with March E-mini S&P futures and Nasdaq futures also falling.
Negative economic news led to a decline in stocks last Friday, and the market continued its downtrend on Monday. The University of Michigan’s US Feb consumer sentiment index dropped to a 15-month low, while inflation expectations rose to a 29-year high.
Tech stocks were particularly affected, with Nvidia, Meta, Tesla, and Microsoft falling. However, Apple and Alphabet managed to show gains. The stock market received support from a decline in the 10-year T-note yield, but T-note prices were undercut by supply overhang.
President Trump announced plans to implement tariffs on imports from Mexico and Canada, which caused Chinese shipping stocks to fall. Investors are looking ahead to Nvidia’s earnings report after Wednesday’s close, as well as US economic calendar events this week.
The Federal Reserve is expected to consider a -25 bp rate cut at the next FOMC meeting on March 18-19, with markets discounting the chances of such a move at around 3%. Overseas stock markets were mixed, with the German Dax rising +0.62% and Japan’s Nikkei Stock 225 closing up +0.26%.
In interest rate news, the 10-year T-note yield fell by -3.3 bp to 4.564%, while swaps discount the chances of a -25 bp rate cut by the ECB at around 98%. Swaps also suggest a rate cut is likely at the March 6 policy meeting.
US stock movers saw most Magnificent Seven stocks close lower, with only Alphabet and Apple showing gains. Nvidia fell about -3% ahead of its earnings report, while Meta fell -2.5% on Monday. Tesla rose despite a Bloomberg report that it will soon issue software updates for Chinese customers. Microsoft fell after a report raised questions about the company’s data center capacity.
Source: https://www.barchart.com/story/news/31086898/stocks-decline-on-weakness-in-tech-stocks