S&P 500 falls as Microsoft and Nvidia decline; traders watch Trump’s tariffs and upcoming inflation report
On Monday, the S&P 500 declined as markets failed to recover from Friday’s steep sell-off, according to CNBC.
The index dropped 0.5 percent, closing at 5,983.25. The Nasdaq Composite fell 1.21 percent to 19,286.92, while the Dow Jones Industrial Average edged up 33.19 points, or 0.08 percent, ending at 43,461.21.
Tech stocks pulled the Nasdaq lower, pushing it into negative territory for 2025.
CNBC reported that Palantir shares fell 10.5 percent, weighing heavily on the index.
Microsoft declined by about 1 percent after a TD Cowen analyst report indicated that the company is cutting spending on data centres, raising fears about potential weakness in artificial intelligence stocks.
Nvidia also dropped 3 percent.
Concerns over US President Donald Trump’s trade policies continued to influence market sentiment.
Trump confirmed that tariffs on Canada and Mexico “will go forward” after the monthlong delay expires next week.
Scott Helfstein, head of investment strategy at Global X, noted that market confidence in the administration may be shifting.
“The White House had investor support for the first four weeks of the term, but the honeymoon may be coming to an end,” Helfstein said.
Monday’s decline followed a rough week for stocks. The Dow and Nasdaq both fell more than 2 percent over the week, while the S&P 500 lost more than 1 percent.
On Friday, the Dow dropped over 700 points, while the S&P 500 and Nasdaq declined by 1.7 percent and 2.2 percent, respectively.
Weaker-than-expected economic data from February added to investor concerns. The US services sector contracted last month, as reflected in purchasing managers’ index data.
Additionally, the University of Michigan’s consumer sentiment index came in lower than expected.
This week, investors will closely watch corporate earnings and key economic reports.
Home Depot and Lowe’s will release earnings on Tuesday and Wednesday, providing insight into US consumer spending.
Nvidia’s earnings report, expected Wednesday evening, is also a major focus, as the AI chipmaker remains one of the largest companies by market value.
On Friday, the US government will release the January personal consumption expenditures (PCE) price index, which the Federal Reserve considers its key inflation measure.
According to Clark Bellin, president and chief investment officer at Bellwether Wealth, this report could provide critical signals about inflation.
“Friday’s PCE for January will be extra important for markets because it will help to confirm if inflation did indeed spike at the start of 2025, since the other January inflation readings, such as CPI and PPI, came in very strong for January,” Bellin said.
However, Bellin also suggested that interest rates are unlikely to change soon. “Regardless of what Friday’s PCE says, it’s likely that the Federal Reserve remains on hold when it comes to any interest rate decision for at least the next 6 months,” he added.
Investors remain cautious as they assess economic conditions, corporate earnings, and the impact of Trump’s trade policies.
