Everything to Know about Macro and Markets
Stocks rallied on Friday but still closed with steep weekly losses. The Dow Jones Industrial Average (DJIA) declined by 2.37%, while the S&P 500 (SPX) lost 3.10% on the week, its worst showing since September 2024. Meanwhile, the tech benchmarks Nasdaq Composite (NDAQ) and Nasdaq-100 (NDX) dropped by 3.45% and 3.27%, respectively, ending in correction territory. The DJIA is the only main index still positive year-to-date.
Markets Hate Uncertainty
Markets opened sharply lower on Friday, as weaker-than-expected jobs data weighed on sentiment. February payrolls growth missed forecasts, while January’s numbers were revised sharply downward. The unemployment rate unexpectedly inched up to 4.1%, while earnings rose at a slower pace than economists projected.
All in all, February’s report reflected a cooling job market, adding fuel to growing expectations of an economic downturn. Markets have been on a roller-coaster ride in recent weeks, with Trump’s policy flip-flops – particularly on tariffs – hitting consumer and investor sentiment. The President’s decision on Thursday to postpone tariffs on Mexican and Canadian imports covered by the USMCA did little to lift spirits, instead muddying the outlook further.
Stocks rebounded later in the day as Jerome Powell offered a dose of optimism regarding the economy. The Federal Reserve Chair said that the “U.S. economy continues to be in a good place” and monetary policy was “well-positioned to wait for greater clarity.” Just a day earlier, Atlanta Fed President Bostic’s comments that that rates could stay unchanged for longer worked in the opposite direction, adding to downward pressure on stocks.
Thus, the market’s bounce following Powell’s remarks may be a sign that investors aren’t ready to abandon the rally just yet, looking for any reasons to buy the dip. Not long ago, any sign of labor market weakness would have been a bullish signal, reinforcing the Fed’s case for rate cuts, whereas even a hint of a pause in monetary easing would send stocks tumbling.
Powell’s comments calmed the markets, but investors shouldn’t ignore another policymaker’s warning. Fed Governor Lisa Cook cautioned that stocks were “susceptible to large declines” as elevated valuations increase their vulnerability to negative economic news. While overvaluation doesn’t guarantee an imminent crash, it adds to market risks, on top of policy uncertainty and mixed economic data.
Stocks That Made the News
▣ Broadcom (AVGO) saw its stock surge on Friday after the company reported quarterly earnings that far exceeded analyst expectations, driven by strong AI-related revenue growth in both semiconductor solutions and infrastructure software. The AI stalwart issued upbeat guidance that outpaced Wall Street forecasts, saying it expects continued strength in AI revenue as hyperscalers ramp up their capex.
▣ Broadcom’s optimistic AI guidance soothed investors’ worries after Marvell Technology’s (MRVL) lackluster guidance tanked the stock and added to the week’s broad tech sell-off. Although MRVL beat Q4 revenue expectations and guided for higher sales than consensus, the gains were too modest to reignite investor enthusiasm for the fading AI trade.
▣ Nvidia (NVDA) regained some ground on Friday following Broadcom’s bullish report and guidance, which signaled continued surging demand for AI-related hardware and infrastructure. Additionally, NVDA found support from reports that OpenAI and Oracle (ORCL) plan to deploy 64,000 Nvidia GB200 AI chips in a massive Texas data center by the end of 2026, part of the $100 billion Stargate venture announced in January. Despite a wave of multi-billion-dollar investment in its cutting-edge AI chips, Nvidia faces risks from potential new export restrictions to China and other countries. The AI leader’s market cap slide since January’s peak has pushed it below the $3 trillion threshold.
▣ Intel (INTC) saw its shares crash after hopes for a Broadcom takeover were shattered last week. AVGO’s CEO dismissed the idea outright, stating the company is “too busy doing AI” while still integrating VMware and has no interest in M&A. This blow was compounded by fears that a Trump administration could roll back the CHIPS Act, which has greatly benefited INTC. Moreover, Taiwan Semiconductor’s (TSM) plans to expand U.S.-based chip production may increase competitive pressure on the already struggling chipmaker.
▣ Hewlett Packard Enterprise (HPE) plunged more than 11%, its worst single-day drop since 2020, despite reporting better-than-expected fiscal Q1 revenue. Weak gross margins and a disappointing FQ2 revenue and earnings outlook weighed on the stock. The AI server maker said its financial performance is being hit by tariffs, which are affecting imported sub-components and outsourced production. HPE plans to mitigate the impact “through supply-chain measures and pricing actions.” Margin compression was widely expected as AI server producers ramp up investment in advanced chips and high-cost manufacturing, but the tariff-related hit this early caught investors off guard. Several analysts cut their price targets for HPE, though most expect performance to improve later in the fiscal year.
▣ IBM (IBM) was a notable winner among legacy tech stocks last week. The tech giant issued strong long-term guidance, projecting higher-than-expected annual revenue growth for 2026-2027, led by its expanding software business. IBM’s ongoing shift from traditional hardware to software and services, driven by strategic acquisitions, is strengthening its market position and financial performance.
Upcoming Earnings and Dividend Announcements
The Q4 2024 earnings season is nearly over, but some notable earnings releases are still scheduled for this week.
The highlight of the week will be Oracle’s (ORCL) and Adobe’s (ADBE) quarterly results, scheduled for March 10th and March 12th, respectively. In addition, reports in focus are arriving from Dick’s Sporting Goods (DKS), Ciena (CIEN), Casey’s General (CASY), Williams-Sonoma (WSM), DocuSign (DOCU), Dollar General (DG), Ulta Beauty (ULTA), and Jabil (JBL).
Ex-dividend dates are coming this week for L3Harris (LHX), FedEx (FDX), Occidental Petroleum (OXY), Owens Corning (OC), UnitedHealth (UNH), Omnicom (OMC), Public Storage (PSA), Coterra Energy (CTRA), Home Depot (HD), Linde (LIN), Devon Energy (DVN), Coca-Cola (KO), and other dividend-paying firms.
For additional exclusive market insights and content from TipRanks Macro & Markets research analyst Yulia Vaiman, click here.