Market Recap: Stocks Retreat Amid Trade Concerns and Retail Sector Woes
Major Indexes Close Lower as Trade Tensions and Retail Sector Weigh on Markets
On Friday, February 21, 2025, U.S. stocks ended the week on a downbeat note, with major indexes retreating from recent highs. The market’s performance was influenced by ongoing trade concerns and disappointing guidance from retail giant Walmart. Here’s a comprehensive look at the day’s market movements and key events:
Market Performance
The three major U.S. stock indexes closed in negative territory:
– The Dow Jones Industrial Average (DJI) fell 386.68 points, or 0.88%, to close at 43,789.97.
– The S&P 500 declined 36.16 points, or 0.59%, finishing at 6,081.36.
– The Nasdaq Composite shed 123.30 points, or 0.62%, ending at 19,839.06.
Key Factors Influencing the Market
Trade Tensions: President Donald Trump’s recent tariff announcements continued to weigh on investor sentiment. Trump has imposed a 10% tariff on Chinese imports and announced plans for 25% tariffs on pharmaceuticals, autos, and semiconductors. These moves have raised concerns about a potential global trade war, as impacted countries may impose retaliatory tariffs.
Retail Sector Woes: Walmart (WMT) issued disappointing guidance for the current fiscal year, expecting sales growth between 3% and 4%. This outlook fell short of analysts’ expectations and overshadowed the company’s better-than-expected fourth-quarter earnings. Walmart’s shares fell 6.5% on Thursday, with the negative sentiment spilling over to Friday’s trading.
Sector Performance: Eight out of eleven sectors in the S&P 500 ended in negative territory. The Financials Select Sector SPDR (XLF) and Consumer Discretionary Select Sector SPDR (XLY) were among the worst performers, losing 1.5% and 0.9%, respectively.
Notable Stock Movements
– UnitedHealth Group (UNH) dropped 8.62%, weighing heavily on the Dow Jones Industrial Average.
– Celsius Holdings (CELH) surged 22.76% after announcing its acquisition of health and wellness drinks brand Alani Nutrition in a $1.8 billion deal.
– Block (XYZ) fell 15.37% following fourth-quarter profit results that fell short of estimates.
– NVIDIA Corporation (NVDA) remained one of the most actively traded stocks, with a slight decline of 0.38%.
Economic Data and Federal Reserve Outlook
The latest economic data painted a mixed picture of the U.S. economy:
– S&P Global’s preliminary February economic activity surveys showed that manufacturing grew at a slower-than-expected pace, while services unexpectedly contracted.
– The Personal Consumption Expenditures (PCE) reading, the Fed’s preferred gauge for inflation, is anticipated next week and will be closely watched by investors.
Traders currently anticipate at least one 25-basis-point interest rate cut by the Federal Reserve this year, with a 60% chance of an additional cut, according to LSEG data.
Looking Ahead: Upcoming Market Events
Investors will be focusing on several key events in the coming days:
1. Federal Reserve Vice Chair Philip Jefferson’s comments, expected later today.
2. The release of the Personal Consumption Expenditures (PCE) data next week.
3. Ongoing developments in U.S. trade policy and potential international responses.
4. Continued earnings reports from major companies across various sectors.
Market Sentiment
The CBOE Volatility Index (VIX), often referred to as the “fear gauge,” rose 2.55% to 15.66, indicating increased market uncertainty.
As the market navigates through trade tensions, mixed economic data, and corporate earnings, investors remain cautious. The coming weeks will be crucial in determining the market’s direction, with particular attention on Federal Reserve policy decisions and the evolution of global trade relationships.
