February 26, 2025

Another session, another declines for both the S&P and the Nasdaq for the first time since August that these two have done so poorly, while some of the old-time stocks continued to support the Dow to some extent.

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As a result, the Dow ended with a closing gain of 160 to 43,621 led by old-timers such as AMGN, CAT, SHW, HD on earnings, MCD, UNH and WMT.

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The S&P, as has been the case recently sold off near the close once again to end 28 down to 5955 naturally led by the former high tech leaders and the financials, which came down hard and it is astounding to realize that it set an all-time high last Wednesday. The Nasdaq also floundered at the end of the session and tanked by 260 to 19,026 burdened by technology and once again, the shares of AAPL ended down slightly after failing to maintain decent intraday gains once again.

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The Russell 2000 Index of small stocks continues to break down and was lower by 8 to 2170 on that weak financial showing and the VIX continued to enjoy its latest upside ride with a gain to 19.43 as stocks continue to falter.

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One of the reasons for the decline was another report which showed in the February Consumer Confidence level at 64.7, down from 71.1 and is now at its lowest level since August 2021 and how are things going to get better with this kind of pessimistic readings.

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The market has been generally struggling since the middle of last week after several weaker-than-expected reports on the economy appeared. The economy still appears to be in solid shape and growth is continuing at the moment. The increase in pessimism was broad-based and carried across both higher- and lower-income households, as well as older and younger ones.

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“There was a sharp increase in the mentions of trade and tariffs, back to a level unseen since 2019,” according to the Conference Board. “Most notably, comments on the current administration and its policies dominated the responses.”

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For its part, the White House said the lower confidence reflects the overhang of his predecessor. It also pointed to recent announcements of investment for new U.S. facilities by AAPL  and of improving CEO confidence as indicators of upcoming growth.

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Confidence among consumers is  helping to keep the U.S. economy out of a recession. And Tuesday’s report echoed what an earlier report from the University of Michigan suggested: Consumers see the current situation as OK, but they are worried about the future.

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The pessimism hit high-momentum areas of the market in particular, those that had seen waves of euphoric investors pile in during recent years. With TSLA getting knocked down another 8.4% and is now more than 150 points below its high in January.

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Bitcoin likewise sank, falling back toward $88,000, which dragged down stocks of companies in the crypto industry. MSTR, the company that has raised money in order to buy more bitcoin and now goes by the name Strategy, fell 11% and is now down by about 45% from its high and still has ridiculously high out of the money call options which some people seem to always want to purchase.

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ZOOM dropped 8.5% even though it reported stronger results for the latest quarter than expected. Analysts pointed to the company’s forecast for revenue growth in the upcoming year, which fell a bit short of their own estimate.

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They helped offset a 2.8% rise for Dow component HD, which delivered better profits for the latest quarter than analysts expected. Its C.E.O. did say that the retailer is still contending with an uncertain economy and higher interest rates, which hems in customers’ ability to spend on home improvements.

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Along with Home Depot, the homebuilders climbed on hopes that potentially lower mortgage rates could help the industry, but they  and retailers are much smaller in market value than NVDA and other Big Tech stocks, which gives them less weight on the S&P and other indexes.

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Tonight will provide the first earnings report for the company and its CEO, Jensen Huang, since a Chinese upstart, Deep seek,  upended the artificial-intelligence industry by saying it developed a large language model that can compete with big U.S. rivals without having to use the most expensive chips.

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That called into question all the spending that had assumed would go into not only NVDA’s chips but also the ecosystem that is built around the AI boom, including electricity to power large data centers.

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In the bond market, Treasury yields pulled back as investors rushed into investments generally seen as safer when the U.S. economy’s prospects look rockier. Yields have been swinging sharply since the President’s election amid uncertainties about how his policies on tariffs, immigration and taxes could affect the global economy.

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He has antagonized U.S. trading partners recently, threatening to raise tariffs and inviting them to retaliate with import taxes of their own. He said on Monday that tariff hikes on imports from Canada and Mexico will move ahead after a one-month delay.

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The yield on the 10-year Treasury fell to 4.29% from 4.40% late Monday, which is a notable move for the bond market. Those yields are down sharply from January, when they were approaching 4.80%, and could be an indication of growing nervousness about upcoming economic growth.

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The fourth-quarter earnings season finally comes to an end with the following – yesterday –  ZM, HIHS, TEM lower and Dow component HD and FANG higher; today INTU, WDAY, CAR, INTU, LCID, CAVA, FSLR higher and tonight  – CHE, EBAY, LOW, TJX and  Dow components, NVDA and CRM; Thursday – ADSK, DELL, ADSK,  JMS.

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Economic reports will see: yesterday – February Consumer Confidence fell to 64.7 from 71.1; today – January new home sales; Thursday – January durable goods orders, weekly jobless claims, 4Q G.D.P; Friday – January Personal Income report (P.C.E.), which is always important to the Fed.