Market Update | February 18th - February 21st

The What?

With leftover effects from last week, the market experienced some pretty serious volatility due to Trump's tariffs. But, there were some other driving factors swaying the market this week: Walmart consumer data, DOJ investigations, and hedge fund data. All of these events caused absolute mayhem, from the S&P 500 hitting a new all-time high to the Dow Jones having its worst day of 2025 and over $1 trillion being wiped out of the stock market.

As always, let's look into some specifics. This past week was a doozy, with every major stock index losing over 1% in value. First, the S&P 500 fell around 1.7%. The Dow Jones, having one of its worst days on record, ended the week down around 2.5%. The Nasdaq experienced similar losses to the Dow Jones, facing a 2.5% loss as well.

Next, onto commodities. The price of gold stayed stable this past week, settling around $2,900. Oil, however, took a hit, dropping about 1% as a result of heightened tensions in the Middle East.

The Why?

Monday was Presidents' Day, so no stock market!

Starting on Tuesday, the U.S. Department of Commerce released some economic data that showed consumer spending was up by 0.6% in January. This ultimately led to higher gains for the S&P 500 that day. Furthermore, the labor market got pushed up a little because unemployment rates fell. The Nasdaq also experienced some upside due mainly to company earnings, which kept the upward momentum steady.

Next, Wednesday was an unexpected day, especially because of the Fed. Remember how the Fed has been talking about rate cuts this year? Well, the Fed released information from its latest meeting hinting at a potential rate increase! Although the market didn't have a crazy sell-off, this news definitely did create some uncertainty in the market. Later in the day, the Chinese GDP growth forecast was revisited, leading to concerns for some commodities, specifically oil. During after-hours, the turning point of the week took place. That being, more companies releasing their quarterly earnings and lots of companies getting mixed results.

Moving on to Thursday. The first thing that happened Thursday was the latest CPI came out, which showed an increase in inflation of 0.3% in January. The report caused mixed reactions among investors. Some happy that prices were rising, and some concerned with the future of the economy. Then, oil prices continued to fall due to geopolitics in the Middle East.

Finally, Friday. Friday was a BIG day because the market got hit with a serious downturn. By this point in the week, the threat of inflation had overshadowed anything good that had happened previously in the week. Also, the threat of increased interest rates worried investors. Finally, mixed results from company earnings were among the bad things that drove Friday's decline. You can usually recognize a pattern when these types of things happen. Everything is going really well (markets hitting all-time highs), every company's stock is gaining value, and then BOOM! A couple pieces of bad economic data, people panic, and sell.

What's Next?

There are a couple of big things happening next week. First, the Fed will give a couple of speeches and some economic data will come out. However, the biggest event this week will most definitely be the earnings report of Nvidia (NVDA). Nvidia is the largest computer chip maker/A.I. chip maker in the world. Nvidia has arguably saved the stock market the past 2 years by pushing A.I. to be better, stronger, and faster. With an earnings beat, the market will most likely regain confidence, prolonging until the summer. With an earnings miss, consumers will most likely have less confidence in the market and it will continue its decline.

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What are you excited for this week?