- Stock Selloff Moderates in Asia, Futures Advance: Markets Wrap
A global selloff in stocks eased in Asian hours as futures on US equity indexes, Treasury yields and
cryptocurrencies all recovered from sharp declines at the start of the trading day. The mood in financial
markets remained nervous after Wall Street investors tempered their bullish views amid concerns that tariffs
and government spending cuts will torpedo growth in the world’s largest economy. Equity-index futures for
the S&P 500 gained as much as 0.3% after losing more than 1% in early Asian trading. Contracts for Nasdaq
100 and European stocks both advanced as well. Asian shares fell to a five-week low Tuesday after the
Nasdaq 100 had its worst day since 2022. Equity indexes in Hong Kong and China also trimmed their declines.
Yields on 2-year Treasuries recovered after slumping to the lowest level since October and a gauge of the
dollar slipped. Two months into the presidency of Donald Trump, global market sentiment has turned
downbeat as investors become increasingly concerned about US economic growth after a tariff war, spending
cuts and a shakeup of decades-old geopolitical relationships. Some investors see the shift in mood as an
opportunity to purchase shares, especially in Hong Kong and China, where the there’s anticipation that the
government will come out with measures to stimulate the economy. - Dow tumbles nearly 900 points, Nasdaq suffers worst day since 2022 as recession fears erupt
A three-week market sell-off intensified on Monday, with investors worried that tariff policy uncertainty
would tip the economy into a recession, something President Donald Trump did not rule out over the
weekend in an interview. The S&P 500 shed 2.7%, touching its lowest level since September at one point and
closing at 5,614.56. The tech-heavy Nasdaq Composite saw the sharpest decline of the major averages, falling
4% for its worst session since September 2022 and closing at 17,468.32. The Dow Jones Industrial Average
dropped 890.01 points, or 2.08%, ending at 41,911.71. The S&P 500 is off 8.7% from its all-time high reached
Feb. 19, and the Nasdaq Composite is off nearly 14% from its recent high. A 10% decline is considered a
correction on Wall Street. The losses worsened as the day went on, but the major averages came off their
session lows just before the close. - Oil prices edge lower as concerns over tariff impact grow
Oil prices fell for a second day in early trade on Tuesday on worries that U.S. tariffs on Canada, Mexico and
China would slow economies around the world and hurt energy demand while OPEC+ ramps up its supply.
Brent futures fell 29 cents, or 0.42%, to $68.99 a barrel at 0016 GMT, while U.S. West Texas
Intermediate crude futures lost 36 cents, or 0.55%, to $65.67 a barrel. U.S. President Donald Trump’s
protectionist policies have roiled markets across the world, with Trump imposing and then delaying tariffs on
his country’s biggest oil suppliers, Canada and Mexico, while also raising duties on Chinese goods. China and
Canada have responded with tariffs of their own. Over the weekend, Trump said a “period of transition” for
the economy is likely but declined to predict whether the U.S. could face a recession amid stock market
concerns about his tariff actions “Trump’s comments triggered a wave of selling as investors started pricing in
the risk of weaker growth in demand,” Daniel Hynes, senior commodity strategist at ANZ said. Stocks, which
crude prices often follow, slumped on Monday, with all three major U.S. indexes suffering sharp declines. - Gold firms as dollar softens, safe-haven flows rise; US data awaited
Gold rose on Tuesday on a weak dollar and safe-haven demand, as investors awaited inflation data to assess
the Federal Reserve’s policy path amid fears of simmering trade tensions and slowing economic growth
following U.S. President Donald Trump’s tariffs. Spot gold rose 0.3% to $2,897.39 an ounce as of 0250 GMT,
while U.S. gold futures were steady at $2,900.80. The dollar index was near a four-month low hit last week,
making bullion less expensive for overseas buyers, while benchmark 10-year U.S. Treasury yields fell.
“The overall uptrend remains intact and the path of least resistance favors the upside, but the market needs
to find new momentum to break free of its congestive range before this is actionable in the near term,” said
Ilya Spivak, head of global macro at Tastylive. Trump, in a Fox News interview on Sunday mentioned a “period
of transition” while declining to predict whether his tariffs would result in a U.S. recession, sending global
stocks down and investors rushing to safe-havens. Trump imposed new 25% tariffs on imports from Mexico
and Canada last Tuesday, along with fresh duties on Chinese goods, but later exempted many Mexican and
Canadian imports from those tariffs for a month, creating uncertainty in the markets and fanning worries
about U.S. inflation and growth. Investors now await U.S. Consumer Price Index (CPI) data on Wednesday to
analyze the Fed’s interest rate stance going forward. Gold is seen as a hedge against political risks and
inflation, but higher rates reduce the non-yielding metal’s appeal. - China’s $41 billion plan to boost consumption is just a start as deflationary pressures deepen
China’s latest move to boost consumption isn’t meant to jolt all kinds of spending. Policymakers last week
doubled subsidies for a consumer trade-in program to 300 billion yuan ($41.47 billion) this year, matching
market expectations — and again steering clear of cash handouts. The subsidies will go toward around 15%
to 20% of the purchase price for select products, including mid-range smartphones and home appliances.
That’s an expansion from last year’s 150 billion yuan program, announced in the summer, for a narrower
range of products. The new round of subsidies are “pretty substantial” and will likely support retail sales,
similar to how e-commerce companies saw a sales boost in certain products late last year, Jacob Cooke, co
founder and CEO of WPIC Marketing + Technologies, told CNBC on Monday. While there’s skepticism that the
impact of a one-time subsidy won’t last long, Cooke said more subsidy programs will likely follow. He added
that China’s “aggressive” 5% GDP growth target and prioritization of consumption indicate that Beijing will do
more to support growth — without relying as much on the old playbook of infrastructure spending. - Japan revises fourth-quarter GDP lower, complicating BOJ’s interest rate outlook
Japan’s economy grew 2.2% on an annualized basis in the fourth quarter, a slower pace than initially
reported, complicating the central bank’s case for a near-term interest rate hike as tepid domestic demand
persists. The revised data came in lower than economists’ median forecast and the initial estimate of 2.8%
growth. On a quarter-to-quarter basis, GDP expanded 0.6%, compared with a 0.7% growth in preliminary
data released last month, the Cabinet Office’s revised data showed on Tuesday. The Bank of Japan is likely to
keep policy rate steady at its next policy meeting on March 18-19, Reuters reported. Yet the rate-setting
board could be discussing another rate hike for as soon as May, due to concerns about inflationary pressure
from wage gains and stubborn rises in food costs. Amid a broader market slump, Japan’s Nikkei 225 index fell
over 2%. The Japanese yen strengthened 0.32% to trade at 146.77 against the greenback. The government
10-year bonds rose with yields shedding 3.7 basis points to 1.538%. - Volkswagen and Stellantis evade Trump’s 25% tariffs, while BMW braces for impact
Automakers Volkswagen and Stellantis have confirmed that their vehicles made in North America will be
exempt from U.S. President Donald Trump’s newly rolled out 25% tariffs, while BMW says it will face levies,
as European car manufacturers grapple with new trade rules. The newly returned White House leader has
long been threatening to slap tariffs on major U.S. trading partners, including Canada, Mexico and the EU.
Last week, new duties on goods from Mexico, Canada and China came into effect. The threat of import tariffs
has raised alarm bells in Europe, as vehicles and machinery are the European Union’s biggest exports to the
United States. In 2023, the EU had a 102 billion euro ($110.6 billion) trade surplus in machinery and vehicles
with the U.S., with the category accounting for 41% of its exports to America. However, some of the region’s
automaking giants may be able to — at least temporarily — skirt around the new duties. Last week, the
White House granted a one-month tariff delay to automakers whose vehicles comply with the United States
Mexico-Canada Agreement, or USMCA — a trade deal between the three countries. Under its terms, if at
least 75% of a vehicle’s parts originate from North America, it can be exempted from new tariffs imposed on
imports from Canada and Mexico. “Our North American assembled VW-brand vehicles meet the USMCA
rules of origin and are exempted from the 25% tariffs,” a Volkswagen spokesperson said in an emailed
statement. “As a global automotive manufacturer, we are monitoring developments in North America very
closely and assessing any potential effects on the automotive industry and our company as a result of the
tariffs announced for the USA, Canada, Mexico and the European Union.” Aside from its flagship brand,
Volkswagen owns various major vehicle brands including Skoda, Audi and Bentley. “We stand ready to work
with policymakers to find solutions that support the U.S. industry while preserving economic opportunities
for workers, businesses and consumers alike,” the auto giant told CNBC. Meanwhile, Stellantis — known for
its Jeep and Dodge vehicles — thanked Trump for granting the USMCA exemption in a statement on Friday
and pledged to grow its U.S. operations. The carmaker was one of the major companies given a one-month
exemption from the levies, ahead of so-called reciprocal tariffs coming into effect on April 2. “We share the
President’s objective to build more American cars and create lasting American jobs,” the firm said at the
time. “We look forward to working with him and his team.” Shares of Stellantis, which has multiple plants in
Mexico, popped after Trump announced the exemptions for carmakers last week. The stock was up more
than 2% on Monday afternoon in London. - Tesla shares plunge 15%, suffering steepest drop in five years
Tesla’s sell-off on Wall Street intensified on Monday, with shares of the electric vehicle maker plunging 15%,
their worst day on the market since September 2020. On Friday, Tesla wrapped up a seventh straight week of
losses, its longest losing streak since debuting on the Nasdaq in 2010. The stock has fallen every week since
CEO Elon Musk went to Washington, D.C., to take on a major role in the second Trump White House.
Since peaking at $479.86 on Dec. 17, Tesla shares have lost more than 50% of their value, wiping out upward
of $800 billion in market cap. Monday marked the stock’s seventh worst day on record. Tesla led a broader
slump in U.S. equities, with the Nasdaq tumbling almost 4%, its steepest decline since 2022. During an
interview on Fox Business after hours on Monday, Musk was asked how he manages to run his businesses
while fulfilling his role in the Trump White House. He said he’s doing so “with great difficulty.” In addition to
Tesla’s troubles, Musk’s social network X experienced several outages throughout the day on Monday, and
his aerospace and defense company SpaceX is investigating two explosions in a row that occurred during test
flights of its massive Starship rocket. - Palantir Stock Tumbles Monday, Now Nearly 40% Off Record High
Palantir’s (PLTR) stock was among the S&P 500’s worst performers Monday, as shares extended losses since
hitting an all-time high last month. The AI analytics company’s stock price plunged 10% to close at $76.38—
bringing it nearly 40% off its record close at $124.62 on Feb. 18. The latest drop comes amid a wider market
sell-off, with the S&P 500 shedding 2.7% on mounting uncertainty over the Trump administration’s economic
policies. However, Goldman Sachs analysts said late last week that they expect Palantir could be among the
fastest-growing companies in terms of AI-enabled revenue over the next two years. Despite the recent
market pullback, “we expect continued technological progress and earnings growth will eventually lead
investors to reengage with AI-exposed stocks,” the analysts said. - AT&T sees first-quarter profit in line with estimates on 5G, fiber expansion
AT&T (NYSE:T) forecast first-quarter adjusted profit in line with analysts’ estimates on Monday, signaling
steady demand for its discounted premium plans combining 5G mobile with high-speed fiber data.
The U.S. telecom giant has been investing in its high-speed fiber internet offerings to help drive faster
subscriber and revenue growth, at a time when the pool of potential new wireless customers shrinks in the
United States. On an adjusted basis, the company expects per-share earnings of 48 cents or higher excluding
DIRECTV, compared with estimates of 49 cents, according to data compiled by LSEG. AT&T, which acquired
DirecTV in 2015, said last year in September that it would sell its entire 70% stake in satellite TV provider
DirecTV to private equity firm TPG, exiting a business marked by declining distributions for the telecom
operator. The deal is expected to close in mid-2025. The company said on Monday it expects to receive about
$1.4 billion to $1.5 billion of cash payments from DIRECTV related to this deal. AT&T also reaffirmed its
annual adjusted profit forecast in the range of $1.97 to $2.07 per share. - Oracle Q3 results miss estimates, but order book jumps on record demand
Oracle reported its fiscal third-quarter results on Monday, which fell short of Wall Street estimates, but its
order book surged amid record demand. Oracle Corporation (NYSE:ORCL) rose 2.2% in afterhours trading
following the report. For the three months ended Feb. 28, Oracle reported adjusted EPS of $1.47 on revenue
of $14.13B, missing Wall Street expectations of $1.49 and $14.39B, respectively. Oracle said it sees 15% 2026
revenue growth. “We expect that our huge $130 billion sales backlog will help drive a 15% increase in
Oracle’s overall revenue in our next fiscal year beginning this June,” CEO Safra Catz said. “And we expect RPO
to continue to grow rapidly—as we look forward to signing our first Stargate contract—yet another big
opportunity for Oracle to expand both its AI training and AI inferencing businesses in the near future.”
Remaining performance obligations (RPO), a gauge of booked revenue, climbed by 62% to $130B. “We are on
schedule to double our data center capacity this calendar year,” said Oracle Chairman and CTO, Larry Ellison.
“Customer demand is at record levels.” Oracle also raised its quarterly dividend by 25% to $0.50 per share, or
$2.00 annually, up from $1.60. Commenting on the results, Jefferies analyst Brent Thill highlighted, “ORCL
delivered mixed results with backlog/capex well above and IaaS/SaaS growth slightly below. FY26 rev growth
was guided to 15% y/y vs cons at 13%.” Evercore ISI’s Kirk Materne notes, “Going to be some back/forth with
bulls/bears as Oracle came in a bit shy on revenue/EPS vs. consensus, but the big story was the massive jump
in RPO to $130bn, which does NOT include any benefit from Stargate.”
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