Market Recap: S&P 500 and Nasdaq Struggle Amid Trade Tensions and Tech Selloff

Major Indexes Close Out Tough Month

As the trading day comes to a close on Friday, February 28, 2025, the U.S. stock market wrapped up a challenging month with mixed results. The S&P 500 and Nasdaq Composite struggled to maintain momentum, while the Dow Jones Industrial Average managed to eke out modest gains.

The S&P 500 (^GSPC) ended the day down 0.1%, closing at 5,858.90 points. This decline caps off a tumultuous month for the benchmark index, which has fallen 2.7% since the beginning of February, marking its worst month since April 2024 and its poorest February performance since 2022.

Similarly, the tech-heavy Nasdaq Composite (^IXIC) shed 0.3%, finishing at 18,509.17. The index has been particularly hard-hit this month, tumbling 5.3% in what could be its largest monthly decline since September and its worst February since the pandemic-induced volatility of 2020.

In contrast, the Dow Jones Industrial Average (^DJI) managed to close slightly higher, gaining 0.04% to end at 43,247.20. Despite this small uptick, the Dow is still down 2.5% for the month, on track for its worst February since 2023.

Trade Tensions and Tech Selloff Weigh on Markets

The market’s struggles can be attributed to several factors, including renewed trade tensions and a significant selloff in the technology sector. President Trump’s recent announcement of potential new tariffs on Canada, Mexico, and China has reignited fears of a global trade war. The proposed 25% tariffs on Canada and China, set to take effect on March 4, have dampened investor sentiment and contributed to market volatility.

Adding to the market’s woes, high-flying tech stocks have experienced a sharp pullback. The Roundhill Magnificent Seven ETF, which tracks the performance of major tech giants, has plummeted 9.3% this month, its worst showing since its inception in April 2023.

Economic Indicators and Upcoming Events

Recent economic data has painted a mixed picture of the U.S. economy. The Labor Department reported that jobless claims for the week ending February 22 increased to 242,000, up 22,000 from the previous week’s revised figure. This rise in unemployment claims has raised concerns about the labor market’s stability.

On a more positive note, the Bureau of Economic Analysis confirmed that U.S. GDP grew by 2.3% in the fourth quarter of 2024, matching initial estimates and analysts’ expectations. However, the housing market showed signs of weakness, with pending home sales declining 4.6% month-over-month in January and 5.2% year-over-year.

Notable Stock Movements and Earnings Reports

Several stocks made significant moves during Friday’s trading session:

1. NVIDIA Corporation (NVDA): The chip giant saw its stock rise 1.66% to $122.14, rebounding from recent losses.
2. Palantir Technologies Inc. (PLTR): Shares of the data analytics firm fell 1.64% to $83.38.
3. SoundHound AI, Inc. (SOUN): The AI company’s stock surged 18.13% to $10.88, making it one of the day’s top gainers.

In earnings news, several companies reported their quarterly results before the market opened on February 28. Notable reports included:

– Chart Industries, Inc. (GTLS): The machinery company was expected to report earnings per share of $3.19, representing a 41.78% increase year-over-year.
– RadNet, Inc. (RDNT): The medical outpatient care company’s earnings were projected to decrease by 25% to $0.15 per share.

Looking Ahead: Key Events and Market Outlook

As investors look to March, several key events and data releases will be closely watched:

1. Implementation of new tariffs: The market will be monitoring the impact of the proposed tariffs on Canada, Mexico, and China, set to take effect on March 4.
2. Jobs report: Next week’s employment data will be crucial in assessing the health of the labor market and potential implications for monetary policy.
3. Earnings season continuation: As more companies report their quarterly results, investors will be looking for signs of corporate health and economic resilience.

In conclusion, as February draws to a close, the U.S. stock market faces significant challenges, including trade tensions, tech sector volatility, and mixed economic indicators. Investors will need to navigate these uncertainties carefully in the coming weeks, keeping a close eye on both macroeconomic trends and individual company performances.