Market Overview
The $SPX (SPY) is down by 0.74% today, while the Dow Jones Industrial Average ($DOWI) (DIA) shows a slight increase of 0.13%. The Nasdaq 100 Index ($IUXX) (QQQ) has decreased by 1.40%. Additionally, March E-mini S&P futures (ESH26) are down by 0.74%, and March E-mini Nasdaq futures (NQH26) are down by 1.42%.
Market Pressures
Most stock indexes are trending lower today, with the Dow Jones at a one-week low. The broader market is experiencing pressure as Nvidia’s earnings report did not alleviate worries over an overheating AI sector, which is affecting chipmakers and AI infrastructure firms. Despite Nvidia surpassing Q4 earnings expectations and providing a promising Q1 forecast, its stock has dropped over 4% due to concerns regarding China. The company will continue omitting data center revenue from China in its projections due to governmental approval issues.
Software Stocks Performance
On a brighter note, Salesforce has seen a rise of over 3%, leading software stocks higher after presenting a robust long-term sales outlook and announcing a significant share buyback, easing fears about AI-related disruptions in the industry.
Geopolitical Concerns
Geopolitical risks are also weighing on stock performance as nuclear negotiations between the US and Iran are currently taking place in Geneva. Crude oil prices have fluctuated today after Iran indicated significant progress in talks with the US on nuclear issues. After an initial drop of over 2%, crude prices have rebounded following statements from the Oman Foreign Minister about positive developments in discussions.
US Economic Indicators
The US job market showed signs of strength with a smaller-than-expected rise in weekly jobless claims, increasing by only 4,000 to reach 212,000, below the projected 216,000. This week’s market focus will revolve around corporate earnings and economic data, notably the anticipated decline in the February MNI Chicago PMI.
International Market Reactions
International stock markets are showing mixed results today: the Euro Stoxx 50 has slipped by 0.29%, while China’s Shanghai Composite experienced a marginal decline, and Japan’s Nikkei Stock 225 rose by 0.29% to reach a new all-time high.
Sector Movements
In the US, AI-infrastructure and chipmaker stocks are facing declines following Nvidia’s report, with leaders in the Nasdaq 100, including Broadcom and Applied Materials, dropping by over 6% and 5%, respectively. In contrast, software stocks are generally thriving, with Atlassian surging by over 10%, bolstered by solid earnings and forecasts from other notable companies like Intuit and Salesforce.
