Market Recap (2/2/25)
Market Recap of the Week of Jan 27, 2025 - Jan 31, 2025
Source: Apple Stocks Application
Overall Market Trends:
Stocks faced mixed results last week with the tech-heavy indices falling while the general market indices rose. The New York Stock Exchange Composite (NYSE) and the Dow Jones Industrial Average etched out small gains, rising just 3 points (+0.01%) and 126 points (+0.26%), respectively. On the other hand, the NASDAQ Composite finished the week down 326 points (-1.63%), and the S&P 500 fell 60 points (-0.99%). These results were largely influenced by a new AI venture as well as new economic data.
The S&P 500 and Nasdaq Composite plummeted Monday due to fears that an artificial intelligence stock bubble would burst. This came after Chinese AI startup, DeepSeek, claimed to have created a new artificial intelligence model for just a fraction of the billions being spent in Silicon Valley. While there is speculation revolving around the company’s claim to have designed its R1 open-sourced reasoning model for a mere $6 million, it sparked concerns that large AI models could be developed with far less investment. This led to a mass AI sell-off around the market. Nvidia (NASDAQ: NVDA) dropped 17% marking the largest single-day market cap loss in history at nearly $600 billion. Fellow chip-makers, Broadcom (NASDAQ: AVGO), Microsoft (NASDAQ: MSFT), and Palantir (NASDAQ: PLTR) fell 17.4%, 2.1%, and 4.4%, respectively. Related industries such as power providers also suffered from the fallout, with Constellation Energy (NASDAQ: CEG) and Vistra (NYSE: VST) falling 21% and 28%, respectively.
Stocks rebounded on Tuesday after a treacherous day prior. Nvidia picked up steam, rising roughly 9% despite early losses. Other tech giants followed with Broadcom climbing 2.6% and Oracle (NYSE: ORCL) jumping 3.6%. Despite these gains, many investors believe that we are still in a period of uncertainty, rather than in the clear.
Stocks finished lower during Wednesday’s trading session after the Federal Reserve kept interest rates steady. The Fed’s remarks in their post-session meeting stated that they were taking a more cautious approach towards stick inflation. Fed Chair Jerome Powell also emphasized that he has had no contact with President Trump since his comments last week about demanding to lower interest rates. Investors also began preparing for the slew of mega-cap earnings reports set to be released throughout the week including Microsoft, Meta, and Tesla.
The market rose on Thursday after investors gauged the earnings reports. Meta climbed 1.6% after beating their bottom and top-line forecasts. Tesla gained 2.9%, shrugging off an earnings and revenue miss. Microsoft, however, plummeted 6.2% after the company posted weak guidance.
Stocks ended Friday’s session down as White House press secretary Karoline Leavitt announced that a 25% tariff on Canada and Mexico and a 10% duty on China would go into effect on Saturday.
Past Earnings Report:
Looking Towards the Future
Upcoming Important Economic Events:
Monday: S&P final U.S. manufacturing PMI
Tuesday: Job openings
Wednesday: ADP employment; S&P final U.S. services PMI; ISM Services
Thursday: Initial jobless claims; U.S. productivity
Friday: U.S. employment report; U.S. unemployment report; Wholesale inventories; Consumer sentiment (prelim)
Future Earnings Reports: