MARKETS USA/Claims - Tariffs and economic concerns dampen purchasing mood

DOW JONES--The issue of punitive tariffs regained the upper hand on the US stock exchanges on Wednesday and dampened the mood somewhat. In late trading, prices gave up most of their gains or even turned negative. The Dow Jones index fell by 0.4 percent to 43,433 points. The S&P 500 closed little changed and the Nasdaq Composite gained 0.3 percent. On the NYSE, 1,342 (Tuesday: 1,634) price gainers were seen, compared to 1,429 (1,159) losers. 66 (53) stocks closed unchanged.

After it was initially said that the punitive tariffs on imports from Canada and Mexico announced by US President Donald Trump were still being negotiated, the president later announced that they would come into force on April 2. He also announced that he would soon impose punitive tariffs of 25 percent on imports from the European Union. He also threatened to withdraw the special permit granted to the US oil company Chevron by the previous administration under Joe Biden to extract and sell oil in Venezuela. He justified this by saying that the South American country was not taking back its citizens who had immigrated to the USA illegally as quickly as promised.

The only economic data released was new home sales for January. They fell significantly more than expected. After the surprisingly weak consumer confidence the day before, this is another indication that the US economy is cooling down.

Otherwise, the focus was mainly on Nvidia's fourth-quarter figures, which were due to be announced after the closing bell. Technology stocks, especially those in the area of ​​artificial intelligence (AI), have been under pressure recently as investors become increasingly nervous about the sector's high valuations. The technology-heavy Nasdaq Composite recently lost four trading days in a row. The Nvidia figures are an indicator of how the rapid growth in AI is doing. Nvidia shares rose by 3.7 percent after falling by around 10 percent over the past three trading days.

"What the chipmaker has to say about the outlook for next year has the power to move markets, especially given the many concerns about Trump's new restrictions on Chinese investment and developments at Deepseek and its push to launch a new AI model," said AJ Bell analyst Danni Hewson.

Another important date on the agenda on Friday is the PCE deflator, the US Federal Reserve's preferred inflation measure. This could provide clues about the US Federal Reserve's future interest rate policy.

Super Micro Computer with relief rally

Among individual stocks, shares in Super Micro Computer rose by 12.2 percent. The server manufacturer has met its reporting obligations just in time. The US company, whose auditor resigned in October after a dispute with management, has submitted the missing quarterly reports and the 2024 annual report to the US Securities and Exchange Commission (SEC).

General Motors (+3.7%) increases its dividend by 25 percent and launches a new share buyback program worth $6 billion.

The US conglomerate 3M (+0.6%) confirmed its outlook for the current year and announced medium-term forecasts at its investor day. The company expects organic sales growth to exceed economic growth by 2027. Earnings per share are expected to increase in the high single-digit range. The group plans to return at least $10 billion in cash to shareholders during the forecast period.

GE Vernova jumped 5.5 percent. The company is developing four projects with a total volume of 5 gigawatts together with the energy supplier NRG (+10.6%) and the unlisted construction company Kiewit. The gas-fired power plants are intended to supply AI data centers with electricity.

Lucid shares fell 13.6 percent. The electric vehicle startup announced the departure of its CEO on Tuesday and said it expects to produce 20,000 vehicles this year, more than double the 9,029 built last year.

Dollar gains moderately - oil prices continue to decline

The dollar held up well. ING analyst Chris Turner pointed to the passage of a budget resolution in the US House of Representatives that lays the groundwork for President Trump's tax cut agenda. The focus on fiscal policy "could buy the dollar some time" and distract from the recent weaker consumer confidence data in the short term, the participant said. However, the market is likely to refocus on the topic of US trade policy next week as the deadline for tariffs against Canada and Mexico approaches.

Oil prices were slightly lighter. Brent and WTI both fell to two-month lows on Tuesday, due to the deterioration in US consumer sentiment and fears that US President Trump's policies could slow economic growth. Meanwhile, US crude oil inventories fell against expectations last week, according to the government's Energy Information Administration. However, the tighter US supply did not support prices.

The price of gold fell slightly again after the significant losses of the previous day. Further profit-taking is likely to be the reason for the decline.

Economic concerns, fueled by weak new home sales and Trump's tariff plans, drove up bond prices; in turn, yields fell. However, Morgan Stanley believes that a further rally in US bonds is unlikely unless the markets significantly increase their expectations of interest rate cuts by the Federal Reserve.

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INDEX last +/- % absolute +/- % YTD

DJIA 43,433.12 -0.4% -188.04 +2.1%

S&P 500 5,956.06 +0.0% 0.81 +1.3%

Nasdaq Comp. 19,075.26 +0.3% 48.88 -1.2%

Nasdaq-100 21,132.92 +0.2% 45.67 +0.6%

US bonds

Term Yield Bp to VT Yield VT +/-Bp YTD

2 years 4.07 -1.6 4.09 -16.8

5 years 4.08 -6.4 4.14 -30.2

7 years 4.16 -4.8 4.21 -31.9

10 years 4.25 -4.6 4.30 -32.0

30 years 4.51 -4.8 4.56 -26.9

FOREIGN EXCHANGES last +/- % Wed, 08:06 Tue, 17:05 % YTD

EUR/USD 1.0486 -0.3% 1.0498 1.0500 +1.2%

EUR/JPY 156.25 -0.3% 156.97 156.46 -4.1%

EUR/CHF 0.9375 -0.1% 0.9392 0.9376 -0.1%

EUR/GBP 0.8273 -0.3% 0.8298 0.8297 -0.0%

USD/JPY 149.02 -0.1% 149.54 149.05 -5.3%

GBP/USD 1.2675 +0.1% 1.2652 1.2654 +1.3%

USD/CNH (Offshore) 7.2665 +0.2% 7.2630 7.2536 -0.9%

Bitcoin

BTC/USD 83,931.90 -5.4% 88,783.20 86,798.90 -11.3%

CRUDE OIL last VT-Settlement. +/- % +/- USD % YTD

WTI/Nymex 68.77 68.93 -0.2% -0.16 -3.0%

Brent/ICE 72.75 73.02 -0.4% -0.27 -2.2%

GAS VT-Settlement. +/- EUR

Dutch TTF 41.41 43.99 -5.9% -2.58 -12.6%

METALS last previous day +/- % +/- USD % YTD

Gold (spot) 2,916.80 2,916.45 +0.0% +0.35 +11.2%

Silver (Spot) 31.82 31.73 +0.3% +0.09 +10.2%

Platinum (Spot) 968.03 971.60 -0.4% -3.58 +6.7%

Copper future 4.53 4.48 +1.0% +0.04 +12.4%

YTD based on the previous day's closing price

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DJG/cln

(END) Dow Jones Newswires

February 26, 2025 4:10 p.m. ET (21:10 GMT)