The first stock market crash happened in 1637 due to the "Tulip Mania" bubble in the Netherlands.
During the early 1600s, tulip bulbs became so valuable that people were trading homes, land, and life savings to get them. Prices skyrocketed as speculation grew, but when buyers began losing confidence, the market collapsed almost overnight. It's considered one of the earliest recorded speculative bubbles in history and serves as a classic warning about the dangers of market speculation.
Market Wrap
On February 4, 2025, U.S. stock markets experienced gains, driven by strong corporate earnings and temporary relief from trade tensions. The S&P 500 rose 0.7%, the Dow Jones Industrial Average increased by 0.3%, and the Nasdaq Composite climbed 1.4%. President Trump’s decision to delay new tariffs on imports from Canada and Mexico provided a boost to investor sentiment, easing fears of immediate trade disruptions. However, tensions between the U.S. and China escalated, introducing new market concerns.
The U.S. imposed a 10% tariff on all Chinese imports, citing national security issues related to illegal migration and drug trafficking. In retaliation, China targeted key U.S. industries, announcing a 15% tariff on coal and liquefied natural gas (LNG), along with a 10% tariff on crude oil, agricultural machinery, and large-engine vehicles. Additionally, China initiated an antitrust investigation into Google, imposed export controls on critical minerals like tungsten and tellurium, and added U.S. companies such as PVH Corp. and Illumina to its "Unreliable Entity List."
Despite these geopolitical developments, strong earnings reports from major tech and energy companies helped maintain positive momentum in U.S. markets. The labor market also showed signs of softening, with job openings falling to a three-month low. However, continued strength in employment contributed to overall investor confidence. Markets closed higher on the day as a result of these mixed but generally positive developments.
Merck shares fell 9.1% after the pharmaceutical company reported lower-than-expected profits for the fourth quarter. While revenue and adjusted earnings topped estimates, the company's 2025 sales outlook failed to meet expectations due to weak international demand for Gardasil and lower U.S. pricing for its diabetes treatment Januvia.
Palantir Technologies' stock surged 24% after reporting better-than-expected fourth-quarter sales growth. The company highlighted strong demand for its Artificial Intelligence Platform and issued an optimistic sales forecast for 2025.
Spotify's stock climbed 13% after reporting impressive subscriber growth and revenue figures. The company's success was attributed to strong podcast integrations and expansion into new markets, which boosted user engagement and premium subscriptions.
PayPal's stock dropped 13.2% after missing adjusted earnings expectations. Despite exceeding net income and revenue estimates, PayPal reported a slowdown in total payment volume and a decrease in transactions per active account, raising concerns about pricing and market share issues for its Braintree subsidiary.
Ferrari's stock rose 7.1% following a strong earnings report. Robust demand for high-performance vehicles and favorable profit margins led to an optimistic outlook for the year.
Marathon Petroleum shares advanced 6.7% after the company topped quarterly profit forecasts. Marathon offset lower refining margins through efficiency improvements and strong performance in its midstream operations, boosting investor confidence.
Estée Lauder shares plummeted 16.2% following an unexpected operating loss in its fiscal second quarter, primarily due to a slump in demand in China and the Asia-Pacific region. The company also announced a restructuring plan involving leadership changes and job cuts.
Clorox shares fell 7.2% after reporting declining sales. Reduced demand for cleaning products post-pandemic and rising costs weighed on the company's profitability.
Super Micro Computer's stock rose 8.6% ahead of an upcoming business update. The server and data storage provider announced a conference call to provide a business update, easing concerns about delayed financial filings.
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