Markets Daily — 25 Feb 2025
Fact of the Day
The "Fear Index" (VIX) Can Predict Market Sentiment.
The CBOE Volatility Index (VIX) is often called the "Fear Index" because it measures the market's expectation of volatility over the next 30 days.
A rising VIX indicates fear and uncertainty among investors, often signaling potential market downturns. Conversely, a low VIX suggests investor confidence and market stability.
Interestingly, extreme spikes in the VIX have historically coincided with market bottoms, making it a valuable contrarian indicator for some investors. Essentially, when fear is at its peak, it could mean opportunities for the bold!
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Market Wrap
Overall, the U.S. stock market experienced modest declines yesterday as investors rotated into safer assets, influenced by a combination of disappointing economic data and upcoming tariff implementations.
- Declining Consumer Confidence:
The Conference Board's consumer confidence index fell sharply by 7 points to 98.3, the largest decline since August 2021, indicating growing concerns among consumers about inflation and potential economic slowdown.
- Upcoming Tariff Implementations:
President Donald Trump announced that tariffs on imports from Canada and Mexico would commence next month, following a monthlong suspension. These tariffs include a 25% levy on imports from Mexico and most Canadian goods, with energy products facing a 10% tariff.
- Investor Rotation to Safe-Haven Assets:
Amid rising economic uncertainties and geopolitical concerns, investors rotated away from riskier assets such as cryptocurrencies and growth-oriented tech stocks, and moved towards safe-haven assets.
Bitcoin's value fell below $90,000, hitting $86,000, reflecting a broader sell-off in the crypto market. Major technology companies like Nvidia and Tesla experienced notable losses, signaling a pullback from growth sectors.
In contrast, defensive sectors such as healthcare and consumer staples saw gains, with companies like Dr Pepper and Colgate-Palmolive rising over 2%.
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| Index |
Day % Change |
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S&P 500 (SPX)
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-0.47%
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Nasdaq-100 (NDX)
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-1.24%
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Dow Jones Industrial (DJI)
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0.37%
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Russell 2000 (RUT)
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-0.38%
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Magnificent Seven
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-2.34%
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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 Stock News & Moves
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NVIDIA Corporation (NVDA)
📉
Day Change: -2.8% | Market Cap: $3477.3b
Business Excellence2:
100
| Valuation2:
20
Nvidia Corporation shares decreased by 2.8% after reports that the U.S. government is considering stricter AI chip export controls to China, potentially impacting future sales. The news, first reported by Reuters, highlights China's significance as a market for Nvidia's AI products.
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Tesla, Inc. (TSLA)
📉
Day Change: -8.4% | Market Cap: $1298.9b
Business Excellence2:
99
| Valuation2:
20
Tesla Inc. shares declined 8.4%, marking the biggest loss in seven months, following reports of declining European sales, which raised concerns about slowing growth prospects in that key market.
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The Home Depot, Inc. (HD)
📈
Day Change: 2.8% | Market Cap: $408.6b
Business Excellence2:
79
| Valuation2:
33
Home Depot shares rose 2.8% after the company reported quarterly earnings that exceeded expectations, fueled by increased demand for building supplies following recent hurricanes, showcasing its resilience in the home improvement sector.
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MicroStrategy Incorporated (MSTR)
💥
Day Change: -11.4% | Market Cap: $65.0b
Business Excellence2:
22
| Valuation2:
2
MicroStrategy shares dropped 11%, mirroring the broader cryptocurrency market downturn. The company's heavy investment in Bitcoin leaves its stock price highly sensitive to fluctuations in cryptocurrency valuations, with recent declines in Bitcoin dampening investor confidence.
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Sempra (SRE)
💥
Day Change: -19.0% | Market Cap: $52.5b
Business Excellence2:
90
| Valuation2:
62
Sempra Energy shares fell more than 18% after posting disappointing Q4 results and lowering its 2025 profit forecast. The company cited regulatory setbacks, including a less favorable California rate case decision and rising operational costs.
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Zoom Video Communications, Inc (ZM)
📉
Day Change: -8.5% | Market Cap: $24.7b
Business Excellence2:
98
| Valuation2:
72
Zoom Communications shares slumped 8.5% after earnings guidance fell short of expectations. The decline reflects a shift back to in-office work, raising questions about future demand for virtual communication tools.
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Super Micro Computer, Inc. (SMCI)
💥
Day Change: -11.8% | Market Cap: $19.1b
Business Excellence2:
97
| Valuation2:
61
Super Micro Computer shares fell 11.8% during regular trading due to concerns over delayed financial filings that could lead to Nasdaq delisting. However, after markets closed, the company filed the reports on time, showing sales more than doubled to $14.99 billion, driven by AI product demand, causing the stock to surge 22% in after-hours trading.
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Hims & Hers Health, Inc. (HIMS)
💥
Day Change: -22.3% | Market Cap: $6.6b
Business Excellence2:
90
| Valuation2:
32
Hims & Hers Health shares tumbled despite beating Q4 revenue expectations. The decline came after the FDA announced the resolution of Ozempic and Wegovy shortages. With the shortage over, pharmacies must cease selling compounded versions of these drugs within 60–90 days, potentially impacting future revenue streams.
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