Stocks Tumble as Inflation, Growth Fears Weigh on Markets

Stocks fell sharply on Friday as fresh economic data intensified investor concerns about slowing U.S. growth and persistent inflation. The S&P 500 dropped 1.7% for the week, while the Dow and Nasdaq both declined by 2.5%. Selling pressure accelerated into the close, with traders hesitant to hold positions ahead of the weekend amid uncertainty surrounding potential policy moves from the Trump administration, particularly regarding new tariffs.

The broader market faced additional pressure from economic concerns and corporate developments. The Nasdaq Composite fell more than 1%, marking its fourth daily drop of over 1% in February. The S&P 500 closed slightly lower for the third consecutive session, while the Dow eked out a modest gain of 33.19 points (0.08%). Defensive sectors, such as healthcare, led gains with a 0.75% rise, while technology was the biggest laggard, dropping 1.43%.

The S&P 500 began the new week with mixed performance, weighed down by concerns over inflation, trade policies, and technology sector weakness. Nvidia (NASDAQ: NVDA), a key player in the AI semiconductor market, fell over 3%, leading a broader slump in tech stocks. Investors are anxious about Nvidia’s earnings report, scheduled for Wednesday, as its results will serve as a gauge of AI demand. The company has been under pressure since January when a low-cost AI model from China’s DeepSeek disrupted the market. Adding to the uncertainty, Microsoft (NASDAQ: MSFT) shares fell 1% on Monday and reportedly canceled several U.S. data center leases, fueling concerns about a potential oversupply in AI infrastructure.

Other major S&P 500 stocks saw varying performances. Apple Inc. (NASDAQ: AAPL) bucked the tech downturn, rising 0.7% after announcing a $500 billion investment plan to boost AI, silicon engineering, and advanced manufacturing in the U.S. Nike (NYSE: NKE) gained 4.9% after Jefferies upgraded its rating to “buy,” citing strong growth prospects. Meanwhile, Berkshire Hathaway (NYSE: BRKa) hit record highs following a robust annual profit report, with shares rising over 4%.

In corporate news, Supermicro (NASDAQ: SMCI) fell nearly 8% ahead of its financial update on February 25th, amid concerns over delayed filings and past governance issues. Despite this, Supermicro shares have surged 34% in recent weeks, driven by strong guidance that forecasts 70% growth in fiscal 2026 revenue, largely fueled by Nvidia’s Blackwell server ramp. Meanwhile, Alibaba (NYSE: BABA) dropped 10% after announcing a massive $52.4 billion investment in cloud computing and AI, marking its largest tech investment to date.

Earnings reports remain a key market driver this week, with Nvidia at the center of attention. Analysts expect record quarterly revenue of $38.32 billion, marking a 73% year-over-year increase. UBS maintained its price target of $185, citing potential supply chain improvements that could enhance Nvidia’s sales. Other notable companies reporting this week include The Home Depot (NYSE: HD), Salesforce (NYSE: CRM), Snowflake (NYSE: SNOW), HP (NYSE: HPQ), and Intuit (NASDAQ: INTU).

This week’s economic calendar is also crucial for market direction. The Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation gauge, will be released on Friday, along with the second estimate of Q4 GDP. These reports will provide insight into whether inflationary pressures are moderating or persisting, influencing the Fed’s policy stance. Market volatility is expected to remain high as investors weigh growth risks against inflation concerns. Unless economic data surprises to the upside or Fed expectations shift, the S&P 500 is more likely to trend lower, with continued volatility ahead.

Data for Technical Analysis (1H) CFD US 500 [S&P 500]

Resistance : : 5998.9, 6001.0, 6004.2

Support : 5992.5, 5990.4, 5987.2             

1H Outlook

Source: TradingView

Buy/Long 1 If the support at the price range 5987.5 - 5992.5 is touched, but the support at 5992.5 cannot be broken, the TP may be set around 6001.3 and the SL around 5985.0, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 5998.9 - 6003.9, TP may be set around 6013.0 and SL around 5990.0, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 5998.9 - 6003.9 is touched, but the resistance at 5998.9 cannot be broken, the TP may be set around 5992.5 and the SL around 6006.4, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 5987.5 - 5992.5, TP may be set around 5979.0 and SL around 6001.4, or up to the risk appetite.       

Pivot Points Feb 25, 2025 02:21AM GMT