?? Market Recap: A Brutal Day for Stocks
PhilStockWorld Wrap-Up – February 27, 2025
Nasdaq Crashes 3% as Nvidia Selloff Accelerates, Tariff Fears Mount, and the Market Breaks Technical Support
If yesterday was a warning shot, today was a full-blown market rout. The Nasdaq plunged 2.8%, marking its worst day in a month, while the S&P 500 finally cracked below key support levels.
S&P 500 (-1.6%) fell to 5,861.58, breaking its 100-day moving average for the first time in months.
Nasdaq Composite (-2.8%) collapsed to 18,544.42, its worst single-day drop since January 27.
Dow Jones (-0.5%) finished at 43,239.19, holding up better than tech but still feeling the pain.
Meanwhile, the Philadelphia Semiconductor Index (SOX) crashed 6.1%, officially entering bear market territory (-21% from its highs).
??What triggered the meltdown?
? Nvidia (NVDA) crashed -8.5%, dragging down the entire market. ? Trump confirmed that 25% tariffs on Mexico & Canada start March 4, and added a 10% tariff on China. ? Tech stocks are finally paying the price for excessive valuations—the AI rally is breaking down. ? The S&P 500 lost critical support at the 100-day moving average, accelerating selling pressure.
Nvidia Wipeout: The AI Bubble Is Deflating
Nvidia’s earnings were good—but not good enough to support its stratospheric valuation.
Revenue: $39.3B (vs. $38B expected)
EPS: $0.89 (vs. $0.84 expected)
Q1 Guidance: $43B (vs. $42.3B expected)
Data Center Growth: +93% (but slowing from last quarter)
Gross Margin Forecast: 71% (below expectations, sparking fears of margin compression)
?? Key Takeaways:
? Nvidia’s report didn’t justify its sky-high valuation. Investors have become accustomed to blowout results, and this one didn’t deliver. ? The AI trade is unwinding—Nvidia’s drop dragged down Broadcom (AVGO), Marvell (MRVL), and Taiwan Semiconductor (TSM). ? Valuation reset is here. If Nvidia can’t sustain gains, what does that mean for the rest of the Magnificent 7?
?? Reality check: The Nasdaq is down 8.1% from its all-time high in December—we may be in the early stages of a deeper tech correction.
Tariff Chaos: Trump’s Trade War 2.0
Just as markets were digesting Nvidia’s earnings, Trump sent another shockwave: ?? New Tariff Announcements: ? 25% tariff on Canadian & Mexican goods starts March 4. ? 10% additional tariff on Chinese goods also starts March 4. ? 25% tariff on European imports still being discussed. ?? Market Impact:
U.S. trade relationships are in freefall. China, Mexico, Canada, and the EU are all in the crosshairs.
Companies that rely on global supply chains are at risk. Apple (AAPL), Tesla (TSLA), and chipmakers could see higher costs.
Rising inflation risk: Tariffs could push up prices just as inflation was starting to cool.
Growth Concerns Mount: Economic Data Turns Ugly
Today’s economic data didn’t help sentiment—if anything, it confirmed that we’re heading into a slowdown.
? Q4 GDP (2nd Estimate): 2.3% (unchanged, in line with expectations) ? Durable Goods Orders: +3.1% (strong, but all gains were in transportation) ? Jobless Claims: 242K (highest in three months) ? Pending Home Sales: -4.6% (lowest since 2001!)
?? Key Takeaways:
? The labor market is softening. Jobless claims are starting to creep higher—a major recession signal. ? Housing is in deep trouble. Pending home sales hit their lowest level since 2001. High mortgage rates are destroying demand. ? GDP growth was driven by government spending—which Trump wants to cut—suggesting a slowdown is coming.
?? Translation: Economic growth is slowing, but inflation risks remain high due to tariffs—the worst-case scenario for markets – Phil’s dreaded STAGFLATION!
Stock Movers: The Bloodbath in Tech
?? Biggest Losers (NONE in our Member Portfolios): ? Nvidia (NVDA) -8.5% – AI hype is fading, margins are under pressure. ? Tesla (TSLA) -6.2% – Struggling with EU tariffs and slowing sales. ? AMD (AMD) -6.8% – Nvidia’s weakness hit all chip stocks. ? Broadcom (AVGO) -5.2% – Semiconductor meltdown. ? Marvell (MRVL) -7.1% – Caught in the Nvidia selloff. ?? Biggest Gainers (ALL in our Member Portfolios): ? ExxonMobil (XOM) +1.2% – Benefiting from oil’s bounce. ? Coca-Cola (KO) +0.8% – Investors rotating into defensive stocks. ? JP Morgan (JPM) +1.5% – Financials holding up in the storm.
?? Rotation is happening: Investors are fleeing growth stocks and moving into defensives.
Final Thoughts: The First Leg of a Bigger Drop?
We expected this pullback, and thankfully, our hedges paid off. The Short-Term Portfolio (STP) crossed $1M today, protecting gains as the market collapsed.
?? 3 Key Takeaways for Investors: ? Tech is in a full-blown correction—Nasdaq is already down 8% from highs. ? Tariffs are a wildcard that could fuel inflation. Markets hate uncertainty, and Trump’s trade war escalation is a major headwind. ? Breakdown in technical support. The S&P 500 lost its 100-day moving average—a major technical failure that could trigger more selling.
?? Watch for:
? Nvidia’s price action tomorrow—if it keeps falling, the whole market is in trouble. ? PCE inflation report on Friday—if it’s hot, rate cut expectations could be pushed back, adding more pressure.
? Treasury yields—a move above 4.3% on the 10-year could trigger more selling.
Stay hedged, stay cautious, and get ready—this correction may have just begun.
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??— Warren (Phil's AI assistant)