TLDR
- S&P 500 extended losing streak to four sessions, falling 0.47% to 5,955.25; Nasdaq down 1.35% to 19,026.39
- Weak consumer confidence data and concerns about economic growth weighed on market sentiment
- Nvidia fell 2.8%, with earnings report due Wednesday; major tech stocks and banks declined
- Reuters poll forecasts S&P 500 to reach 6,500 by year-end 2025 (9% above current level)
- Trump’s tariff plans on China, Mexico, Canada create market uncertainty and potential inflationary pressure
The S&P 500 extended its losing streak to four straight sessions on Tuesday, hitting a five-week low as investors grew increasingly worried about economic growth and global trade tensions. The benchmark index fell 0.47% to close at 5,955.25, while the tech-heavy Nasdaq Composite dropped more sharply, tumbling 1.35% to finish at 19,026.39.
The selloff was partly driven by weaker-than-expected consumer confidence data from the Conference Board. This latest report follows disappointing manufacturing and retail sales figures from last week, raising concerns about the overall health of the U.S. economy. The consumer confidence report showed the sharpest deterioration in 3-1/2 years in February.
“All of that comes together to call into question the underpinning of what has been the strength of the U.S. economy the last couple of years, which is the consumer and the job market,” said Ross Mayfield, investment strategist at Baird Private Wealth Management.
The Dow Jones Industrial Average bucked the trend, rising 159.95 points (0.37%) to close at 43,621.16. This divergence highlights the rotation from growth stocks to more value-oriented companies in the current market environment.
Technology stocks, which have driven much of the market’s gains in recent years, took the brunt of Tuesday’s selling pressure. Nvidia, a key player in the artificial intelligence boom, fell 2.8%, further dragging down the Nasdaq. The semiconductor giant’s shares are already down more than 5% in 2025, underperforming the broader market. Investors are eagerly awaiting Nvidia’s quarterly earnings report, scheduled for Wednesday after the closing bell.
Other tech momentum stocks also retreated. Palantir dropped 3%, adding to its 13% decline for the week. Meta Platforms slid 1.6%, while Tesla plummeted more than 8%, causing its market capitalization to drop below the $1 trillion threshold.
The banking sector was not spared from the selloff. Shares of major U.S. banks including Goldman Sachs, Wells Fargo, and JPMorgan Chase each fell more than 1% amid rising recession concerns. This suggests that investors are growing worried about the broader impact of economic slowdown on financial institutions.
In a flight to safety, investors turned to U.S. Treasury bonds, pushing the benchmark 10-year yield below 4.3% – its lowest level since December. Bond yields and prices move in opposite directions, indicating increased demand for these safer assets. In the cryptocurrency market, Bitcoin tumbled below $90,000, hitting a three-month low and trading nearly 20% below its all-time high reached on President Donald Trump’s Inauguration Day.
Adding to market anxiety are escalating trade tensions. President Trump announced that tariffs on imports from Canada and Mexico “will go forward” after the current 30-day moratorium expires. Trump has already rolled out a new 10% levy on all Chinese imports and announced tariffs on global steel and aluminum imports. He has also mentioned plans to introduce 25% tariffs on autos, semiconductors, and pharmaceutical imports.
These tariff announcements create uncertainty for investors, who worry about potential inflationary pressures at a time when the Federal Reserve has paused its rate-cutting cycle. “The tariffs, to us, are the biggest known unknown for markets and investors,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial.
Analysts forecasts the S&P 500 will finish 2025 at 6,500
Despite the recent market volatility, a Reuters poll of 54 equity strategists, analysts, brokers, and portfolio managers forecasts the S&P 500 will finish 2025 at 6,500 – about 9% above Tuesday’s close. The poll, conducted between February 13-25, suggests that solid corporate earnings growth will continue to support gains in equities.
Analysts expect S&P 500 earnings growth of 11.1% in 2025, compared with 11.7% in 2024, with growth for the final quarter of 2024 set to be the highest since 2021, according to LSEG data. “The economy is growing, inflation has been sticky but it’s much lower than it was just six months or a year ago, and corporate profits are growing,” Saglimbene noted.
However, many market experts warn that increased volatility may be on the horizon. When asked whether a stock market correction of at least 10% is likely in the coming three months, 13 of 19 poll participants said it was likely or highly likely. “Those with a short-term horizon, they could be a little rattled by volatility. We just have so many unknowns as we start 2025,” said Kristina Hooper, chief global market strategist at Invesco in New York.
President Trump’s ongoing government workforce reduction program, directed by Tesla CEO Elon Musk’s Department of Government Efficiency, has resulted in thousands of federal worker job cuts in recent weeks. These changes, along with Trump’s foreign policy positions, add another layer of uncertainty to the market outlook.
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