Markets Daily — 07 Feb 2025
Fact of the Day
February is known for being one of the weaker months for stock performance in the U.S. Historically, the S&P 500's average return for February is relatively flat or even negative, making it one of the least favorable months for investors compared to others like January or March.
One theory behind this trend is that after the January Effect and the early-year optimism, investors may begin to take profits or adjust their portfolios based on early-year economic data and earnings reports. Additionally, with the end of the fiscal year for many companies (outside the U.S.), some markets see lower liquidity, which can add to volatility.
However, Valentine’s Day sometimes brings a positive twist for certain industries, particularly retail, travel, and luxury goods, as spending on gifts, dining, and experiences gives those sectors a short-term boost!
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Market Wrap
On Friday, February 7, 2025, U.S. stock markets saw significant declines, driven by rising inflation expectations, higher Treasury yields, and concerns over potential new tariffs. The S&P 500 fell 0.9%, the Dow Jones Industrial Average dropped 1% (losing 444 points), and the Nasdaq Composite declined 1.4%, largely impacted by a sharp sell-off in Amazon shares. Over the course of the week, the S&P 500 and Dow both ended with losses of approximately 1.2%, snapping a two-week streak of gains, while the Nasdaq dropped 2.3%.
Economic data played a key role in the market downturn. The University of Michigan's preliminary report showed that consumers expect inflation to reach 4.3% over the next year, the highest forecast since 2023. This, combined with the latest jobs report, added pressure to the markets. Nonfarm payrolls increased by 143,000 in January, and the unemployment rate fell to 4%. Although job growth was slower than in previous months, it was still strong enough to fuel concerns that inflation may persist longer than anticipated, leading to further increases in Treasury yields.
Political uncertainty added to market jitters. President Donald Trump suggested that new tariffs might be implemented soon, raising fears of additional cost pressures that could exacerbate inflation. The combination of these factors led to cautious sentiment across Wall Street, driving broad-based declines across sectors and erasing earlier gains from the week.
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| Index |
Day % Change |
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S&P 500 (SPX)
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-0.95%
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Nasdaq-100 (NDX)
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-1.30%
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Dow Jones Industrial (DJI)
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-0.99%
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Russell 2000 (RUT)
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-1.19%
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Magnificent Seven
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-1.90%
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TopP Small Cap Index1
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-
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TopP Large Cap Index1
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-
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TopP Tech Index1
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-
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Notable Movers
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Amazon.com, Inc. (AMZN)
📉
Day Change: -4.1% | Market Cap: $2442.8b
Business Excellence2:
96
| Valuation2:
40
Amazon's stock declined by approximately 4% after issuing a disappointing sales outlook. Despite strong fourth-quarter earnings, concerns over slowing growth in its Amazon Web Services division weighed on investor sentiment.
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Uber Technologies, Inc. (UBER)
📈
Day Change: 6.6% | Market Cap: $146.7b
Business Excellence2:
60
| Valuation2:
60
Uber's stock jumped 6.6% after billionaire investor Bill Ackman disclosed a significant stake in the company, boosting confidence in Uber's growth trajectory.
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Palo Alto Networks, Inc. (PANW)
📈
Day Change: 3.5% | Market Cap: $61.1b
Business Excellence2:
90
| Valuation2:
63
Palo Alto Networks' stock increased by 3.5%, supported by strong quarterly earnings and rising demand for its cybersecurity services.
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D.R. Horton, Inc. (DHI)
📉
Day Change: -5.0% | Market Cap: $46.0b
Business Excellence2:
94
| Valuation2:
85
D.R. Horton's stock dropped 5.0% amid concerns over potential new tariffs on imported materials like Canadian lumber, rising Treasury yields leading to higher mortgage rates, and broader inflation fears. The stock is now 35.5% below its 52-week high.
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Take-Two Interactive Software, (TTWO)
🚀
Day Change: 14.0% | Market Cap: $32.5b
Business Excellence2:
56
| Valuation2:
10
Take-Two Interactive's stock rose about 14% after the company reported a narrower-than-expected quarterly loss. Investors were optimistic about the planned release of 'Grand Theft Auto VI' later this year.
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Monolithic Power Systems, Inc. (MPWR)
📈
Day Change: 9.0% | Market Cap: $32.5b
Business Excellence2:
99
| Valuation2:
22
Monolithic Power Systems' stock climbed nearly 9% after a strong earnings report, driven by high demand for its power solutions in automotive and industrial markets.
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Expedia Group, Inc. (EXPE)
🚀
Day Change: 17.3% | Market Cap: $22.0b
Business Excellence2:
74
| Valuation2:
47
Expedia's stock surged 17.3% following better-than-expected fourth-quarter results, reflecting strong travel demand and robust holiday bookings.
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Ulta Beauty, Inc. (ULTA)
📉
Day Change: -6.7% | Market Cap: $19.7b
Business Excellence2:
96
| Valuation2:
74
Ulta Beauty's stock fell 6.7%, influenced by broader weakness in the beauty sector, particularly after e.l.f. Beauty's disappointing forecasts.
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e.l.f. Beauty, Inc. (ELF)
💥
Day Change: -19.6% | Market Cap: $6.1b
Business Excellence2:
96
| Valuation2:
28
e.l.f. Beauty's stock plunged 19.6% after cutting its annual sales and profit forecasts. The company cited impacts from the Los Angeles wildfires and concerns over potential restrictions on TikTok, a key marketing platform.
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