- The US500 index is down 1.8%, while the VIX volatility index has surged 12%. The US dollar is experiencing slight losses.
- The technology, discretionary and financial sectors are under pressure, with Wells Fargo, Morgan Stanley, and Goldman Sachs all down nearly 6%.
- Nvidia (NVDA.US) is losing over 3%. Meta Platforms (META.US) is retreating by nearly 4%
- Tesla (TSLA.US) is plunging almost 8% after reporting a 49% drop in sales in China
- US retailer Target (TGT.US) loses 6% after lower than expected guidance (expects flat sales vs 1.8% exp. on Wall Street)
Investors are now pricing in a 50% probability of a Fed rate cut in May. Meanwhile, the Atlanta Fed GDP model has revised its Q1 2025 US GDP estimate downward from -1.5% to -2.8%.
Market sentiment continues to reflect a risk-off mood during today’s session, with the S&P 500 extending yesterday’s sharp declines, when it posted its biggest drop since mid-December. Growing concerns about the US economic outlook are fueling increased bets on faster Federal Reserve rate cuts.
Stock Market Volatility in the US
Source: xStation5
Chart: US500, NVDA.US, and MSFT.US
The US500 index has fallen below its 200-day exponential moving average (EMA), while the RSI indicator dropping below 30 points suggests the index is approaching oversold levels.
Source: xStation5
Source: xStation5
Microsoft Shares Fall Below 200-Day Moving Average
Microsoft’s stock has dropped below its 200-day moving average and is now trading nearly 20% below its all-time highs.
Source: xStation5
Source: xStation5
Target (TGT.US) expects a tough year
Target is facing another tough year, forecasting little to no sales growth in 2025, a sign that its struggles to regain momentum aren’t over yet. Despite efforts to cut prices, introduce discounts, and refresh its merchandise, the retailer continues to lag behind competitors like Walmart and Costco, which have been able to sustain stronger growth.
While the company delivered better-than-expected Q4 results, with 1.5% growth in comparable sales, the picture isn’t entirely positive. February sales were weak, and consumer sentiment remains fragile, with inflation and economic uncertainty weighing on spending. Adding to the pressure, CEO Brian Cornell warned that new tariffs on Canadian and Mexican goods could push prices higher in the coming days, making affordability an even bigger concern for shoppers.
On the profitability front, rising fulfillment and supply chain costs are cutting into margins, and heavy discounting hasn’t helped. Target has seen some success in expanding its advertising and marketplace services, but the broader economic environment remains a challenge. With inflation persisting and discretionary spending cooling off, the retailer is approaching 2025 with a cautious stance, knowing it still has plenty of hurdles ahead.
Source: xStation5
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