Weekly Market Report (February 02, 2025) - Insights and Forecasts
Dive into the market analysis for February 02, 2025, covering SPY, QQQ, IWM, and the week’s key economic data. Stay ahead with expert insights and forecasts.
Weekly Market Report for February 02, 2025
The stock market had a mixed week. The Dow Jones gained 0.3%, while the S&P 500 fell 1.0%, the Nasdaq dropped 1.6%, and the Russell 2000 lost 0.9%.
AI Concerns Shake the Market
The week started with a sharp decline due to concerns about a new Chinese AI model, DeepSeek, which is more efficient than competitors like ChatGPT. This raised doubts about the future of AI investments.
NVIDIA (NVDA) took a major hit, falling 17% on Monday, marking its biggest one-day market cap loss ever. By week's end, it was down 15.8% from the previous Friday.
Big Earnings Reports
About 40% of the S&P 500 reported earnings this week. Key companies included:
Apple (AAPL): +5.9%
Microsoft (MSFT): -6.5%
Meta (META): +6.4%
Tesla (TSLA): -0.5%
Other notable earnings:
IBM (+13.8%), Starbucks (+9.0%), Boeing (+0.3%)
General Motors (-8.3%), Lockheed Martin (-6.8%)
Fed Decision & Economic Data
On Wednesday, the Federal Reserve left interest rates unchanged at 4.25-4.50%, as expected. The Fed noted that inflation remains somewhat elevated, but they did not indicate further progress toward their 2% goal.
Fed Chair Jerome Powell said there’s no rush to adjust rates since the economy remains strong. Markets showed some volatility but mostly settled by the end of the day.
Positive Economic Reports
Jobless claims remained low at 207,000.
Personal spending grew 4.2% in Q4, the strongest since early 2023.
The core PCE price index, the Fed’s preferred inflation measure, rose 2.8% year-over-year for the third straight month.
Market Drop on Tariff News
Stocks fell late Friday after the White House confirmed new tariffs:
25% on Canada and Mexico
10% on China
The tariffs, set to start Saturday (Feb 1), were linked to concerns over immigration, trade deficits, and fentanyl. Reports hinted at behind-the-scenes negotiations that might reduce the tariffs, but uncertainty led to a market sell-off.
Treasury Yields & Market Performance
Treasury yields were volatile but ended lower:
10-year yield: 4.57% (-6 basis points)
2-year yield: 4.24% (-3 basis points)
Year-to-date market performance:
Dow Jones: +4.7%
S&P 500: +2.7%
Nasdaq: +1.6%
Russell 2000: +2.6%
S&P Midcap 400: +3.8%
Weekly Market Heatmap
Weekly Sector Performance
Looking Ahead to the Upcoming Week
Next week, the focus will be on the January jobs report, which includes annual revisions to employment data and will be a key indicator of labor market trends. Updates on manufacturing and services PMIs from both S&P Global and the Institute for Supply Management will provide insights into economic activity. Additionally, investors will watch the University of Michigan's preliminary February consumer sentiment and inflation expectations to gauge consumer confidence. Labor market data will also be in the spotlight, with the January ADP private employment report and December JOLTS job openings data offering further perspective on hiring trends. Other important economic releases include December factory orders, construction spending, trade balance, consumer credit, and wholesale trade sales, as well as fourth-quarter nonfarm productivity and unit labor costs. Together, these reports will help shape expectations on economic growth, inflation, and potential Federal Reserve policy moves.
Next week will be also be significant one for earnings, with major companies across various sectors set to report. Amazon (AMZN), Google (GOOGL, GOOG), AMD (AMD), Disney (DIS), and Qualcomm (QCOM) are among the key names, with investors looking for insights into AI advancements, cloud computing, and digital advertising trends. In the semiconductor space, ARM Holdings (ARM), NXP Semiconductors (NXPI), and Qualcomm (QCOM) will be closely watched for signs of growth and demand in the chip industry. The pharmaceutical sector will also be in focus, with Pfizer (PFE), Novo Nordisk (NVO), and Eli Lilly (LLY) set to report, particularly regarding developments in weight-loss drugs and broader healthcare trends. Meanwhile, consumer spending trends will be reflected in reports from PepsiCo (PEP), Chipotle (CMG), and Hershey (HSY), while Roblox (RBLX) and Peloton (PTON) will offer insights into digital and fitness engagement. Amazon's earnings will be particularly crucial, shedding light on e-commerce, cloud computing (AWS), and overall consumer spending behavior. With the backdrop of a key January jobs report and other macroeconomic data, this earnings week could bring volatility and significant market movement.
Economic Events
Earnings Event
Market Health
The market remains bullish
Broader Market - SPY, QQQ, IWM, MDY
The stock market experienced a pullback this week, as reflected in the major ETF charts. The SPDR S&P 500 ETF (SPY) closed at 601.82, down 1.01%, after facing resistance near its highs. The Invesco QQQ Trust (QQQ), representing the Nasdaq, dropped 1.39% to 522.29, showing some weakness after a strong uptrend. The iShares Russell 2000 ETF (IWM), which tracks small-cap stocks, declined 0.97% to 226.48, struggling to maintain momentum. Similarly, the SPDR S&P MidCap 400 ETF (MDY) fell 1.14% to 590.68, failing to break through key resistance levels. Volatility remains elevated across indices, with high daily trading ranges (DTR) indicating significant price swings. As markets digest earnings reports and macroeconomic data, investors will watch for signs of a potential rebound or continued consolidation in the coming weeks.
Watch List
ARM, TSLA, SNOW, NFLX
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