By Alex Financials

Stock Market Volatility Amid Tariff Uncertainty

The stock market is experiencing significant turbulence as investors grapple with ongoing uncertainty surrounding U.S. tariff policies. The S&P 500 is on track for its worst week since September 2024, with a decline of 3.6% this week. Similarly, the Dow Jones Industrial Average has dropped 2.9%, and the Nasdaq Composite has fallen 4.1%16. This volatility has been driven by concerns over the potential impact of tariffs on U.S. economic growth, particularly as President Donald Trump continues to adjust trade strategies.

Key Index Movements

• $SPX (S&P 500): Down 3.6% for the week, marking its third consecutive week of declines.
• $DJI (Dow Jones Industrial Average): Decreased by 2.9%, with a notable drop of over 400 points on Thursday.
• $IXIC (Nasdaq Composite): Entered correction territory, finishing more than 10% below its peak.

Earnings Reports and Stock Reactions

Despite the broader market downturn, several companies have reported strong earnings, leading to significant stock movements.

• $SMCI (Super Micro Computer): Surged over 20% after submitting overdue financial documents to the SEC, avoiding delisting.
• $JACK (Jack in the Box): Jumped more than 10% following a better-than-expected earnings report, with operating earnings of $1.92 per share.
• $WDAY (Workday): Rose 7% after reporting fourth-quarter adjusted earnings of $1.92 per share on revenues of $2.21 billion, surpassing analyst forecasts.

Pre-Market Activity and Futures

U.S. stock futures are pointing higher ahead of the market open, with Nasdaq futures up 0.2%, Dow futures up 0.1%, and S&P 500 futures up 0.3%12. This comes after a turbulent trading session on Thursday, where major indices experienced significant declines.

Notable Pre-Market Movers

• $AVGO (Broadcom): Shares are up following a strong earnings report, driven by continued strength in AI chip sales.
• $WBA (Walgreens Boots Alliance): Gaining on the announcement of a $10 billion deal to be taken private.
• $HPE (Hewlett Packard Enterprise): Plummeting after disappointing results and announced layoffs.

Employment Report and Economic Indicators

Investors are keenly awaiting the February nonfarm payrolls report, which is expected to provide crucial insights into the economy’s performance. Economists surveyed by Dow Jones predict an addition of 170,000 jobs, with the unemployment rate expected to remain stable at 4%.

Economic Data to Watch

• Nonfarm Payrolls: Expected to add 170,000 jobs.
• Unemployment Rate: Projected to remain at 4%.

Analyst Upgrades and Downgrades

Several companies have seen analyst ratings changes, influencing their stock prices.

• $BAC (Bank of America): Upgraded by Baird, citing the recent pullback as a buying opportunity.
• $W (Wayfair): Upgraded by Jefferies to buy from hold, with potential for significant margin expansion.

The stock market remains highly sensitive to developments in U.S. trade policy and economic indicators. Investors are advised to stay informed and cautious as they navigate this volatile environment.