US stocks extended their decline on Tuesday, with the S&P 500 registering its fourth consecutive day of losses as weaker-than-expected consumer confidence data weighed on sentiment. The Nasdaq Composite led the downturn, dragged lower by a sharp sell-off in technology stocks, while the Dow Jones managed to post modest gains. Investors reacted to growing concerns over economic growth and global trade, with cautious forward guidance from Walmart adding to fears about consumer spending. Treasury yields fell as traders sought safety in bonds, while Bitcoin tumbled below $90,000 amid a broader risk-off mood. Meanwhile, President Trump’s confirmation of impending tariffs on Canada and Mexico, along with reports of stricter restrictions on China’s semiconductor exports, further clouded the outlook for global markets.

Key Takeaways:

  • S&P 500 Falls for a Fourth Straight Session: The S&P 500 declined 0.47% to close at 5,955.25, marking its fourth consecutive session of losses as investors reacted to disappointing consumer confidence data and lingering concerns over economic growth. 
  • Nasdaq Drops 1.35%, Tech Stocks Under Pressure as Nvidia and Palantir Slide: The Nasdaq Composite suffered a sharp decline, falling 1.35% to 19,026.39 as technology stocks continued to struggle. Nvidia led the sector’s losses, dropping 2.8%, while Palantir fell 3%, extending its weekly decline to nearly 13%. 
  • Dow Jones Edges Higher as Defensive Stocks Provide Stability: Unlike the broader market, the Dow Jones Industrial Average managed to post a gain, rising 159.95 points, or 0.37%, to close at 43,621.16. The index’s performance was buoyed by strength in defensive stocks, which outperformed as investors sought shelter from volatility in riskier assets. 
  • Consumer Confidence Plunges, Raising Growth Concerns: The latest Conference Board consumer confidence survey fell sharply to 98.3 in February, significantly below economists’ expectations of 103.0 and down from 105.3 in January. The steep decline reflects growing consumer anxiety over job security and the broader economy. 
  • European Stocks Edge Higher as UK Boosts Defence Spending: European markets saw modest gains on Tuesday, with the pan-European Stoxx 600 rising 0.15% after fluctuating throughout the session. The FTSE 100 in London added 9.69 points, or 0.11%, closing at 8,668.67, while Italy’s FTSE MIB outperformed, climbing 243 points, or 0.63%. France’s CAC 40 underperformed, dropping 41 points, or 0.51%, while Germany’s DAX index initially extended its rally following the country’s election results but later slipped 0.13% lower. Shares of BAE Systems surged 4.7% after UK Prime Minister Keir Starmer pledged an additional £13.4 billion in annual defence spending starting in 2027, boosting sentiment in the defence sector.
  • Asian Markets Decline Amid Trade and Rate Concerns: Markets across the Asia-Pacific region ended lower on Tuesday, as renewed trade concerns following Trump’s tariff announcement and a rate cut by the Bank of Korea added to investor unease. Japan’s Nikkei 225 led the losses, falling more than 1% to close at 38,237.79, while the Topix dropped 0.43% to 2,724.7. South Korea’s Kospi declined 0.57% to 2,630.29, and the small-cap Kosdaq lost 0.50% to 769.43. The Bank of Korea cut interest rates from 3% to 2.75% in an attempt to stimulate growth, though the move failed to lift sentiment. Hong Kong’s Hang Seng Index fell 1.36%, while China’s CSI 300 dropped 1.11% to 3,925.65.
  • Treasury Yields Drop to Lowest Level Since December as Investors Seek Safety: The benchmark 10-year Treasury yield fell nearly 10 basis points to 4.294%, its lowest level since December, as investors increased their holdings of safe-haven assets. The 2-year Treasury yield also declined more than 6 basis points to 4.098%, reinforcing expectations that the Federal Reserve may be forced to cut interest rates sooner than previously anticipated. 
  • Oil Prices Drop on US Trade Tensions: Oil markets faced renewed selling pressure on Tuesday, with Brent crude falling $1.60, or 2.14%, to $73.18 per barrel, while US West Texas Intermediate crude dropped $1.65, or 2.33%, to $69.05 per barrel. Concerns remain over US foreign policy under Trump, with speculation that a potential peace deal with Moscow could lead to the lifting of Russian sanctions and an increase in global oil supply. 

FX Today:

  • EUR/USD Extends Gains as Dollar Weakens: The Euro strengthened against the US Dollar on Tuesday, closing at 1.0516, up 0.47% from Monday’s 1.0461 close. The pair recorded its third consecutive daily gain, recovering from last week’s low of 1.0389, which marked its weakest level since November. Compared to last Tuesday, when EUR/USD was trading at 1.0425, the current price reflects a 0.9% appreciation. However, the Euro remains below the 100-day SMA at 1.0544. If buyers sustain the current rally, a breakout above 1.0544 could pave the way for a test of the 200-day SMA at 1.0735, a level last seen in early January. On the downside, a retreat below 1.0500 could bring a pullback toward 1.0450, with stronger support resting near last week’s low of 1.0389.
  • GBP/USD Rises for Third Consecutive Day: The British Pound extended its winning streak, climbing 0.37% to settle at 1.2671 on Tuesday, compared to 1.2624 the previous session. The resistance remains at 1.2788, the 200-day SMA, which previously rejected advances earlier in February. A break above this level could accelerate gains toward 1.2850. On the downside, if GBP/USD fails to hold above 1.2650, a retest of last week’s low at 1.2550 is possible, with further declines toward 1.2500 in an extended selloff.
  • USD/JPY Weakens as Treasury Yields Decline: The US Dollar continued to slide against the Japanese Yen, with USD/JPY closing at 148.99, down 0.47% from Monday’s close of 149.72. This marks the pair’s third straight daily decline, extending losses from its February peak of 154.00. The fall in US Treasury yields weighed on the dollar, with the benchmark 10-year yield dropping to 4.294%, its lowest since December. Key support now lies at 148.50, which previously held as a floor in late January. If selling pressure persists, further downside could lead to a test of 147.80, the lowest level in February. On the upside, a recovery above 150.00 could trigger a short-term rebound.
  • USD/CAD Gains as Tariff Concerns Mount: The US Dollar strengthened against the Canadian Dollar on Tuesday, with USD/CAD closing at 1.4302, rising 0.32% from Monday’s 1.4255 close. The pair has been climbing steadily since last Thursday, when it touched a low of 1.4100—its weakest level since late January. The recovery has been driven by renewed trade tensions, as US President Trump reiterated his threat to impose 25% tariffs on all imports from Canada and Mexico. The next upside target remains 1.4350, which acted as resistance earlier this month, followed by the February 13 high at 1.4450. On the downside, a failure to hold above 1.4250 could see the pair retest last week’s low at 1.4100.
  • Gold Declines After Testing $2,950 Resistance: Gold prices fell sharply on Tuesday, closing at $2,911, down 1.39% from the previous session’s $2,950 close. The metal initially attempted to break higher, reaching an intraday peak of $2,953, but strong resistance at the $2,950 level triggered profit-taking, erasing recent gains. Compared to last week, when gold briefly dipped to $2,888, today’s price action suggests that gold is consolidating within a range. If sellers maintain control, the next major support level is near $2,880, which acted as a strong floor last week. Conversely, a break above $2,950 could revive bullish momentum, with the next major upside target at the psychological $3,000 level.

Market Movers:

  • Tesla Tumbles 8%, Losing $1 Trillion Market Cap: Tesla shares suffered an 8% drop on Tuesday, marking the fourth straight session of declines. The sell-off pushed Tesla’s market capitalization below the $1 trillion threshold for the first time in months. 
  • Solventum Surges on $4.1 Billion Asset Sale: Shares of healthcare company Solventum jumped 10% on Tuesday after announcing it would sell its purification and filtration business to Thermo Fisher Scientific for $4.1 billion. 
  • Sempra Plunges After Cutting Profit Forecast: Utility giant Sempra saw its stock price collapse 19% after lowering its full-year profit forecast. The revision, coupled with weaker-than-expected fourth-quarter results, triggered a sharp sell-off.
  • Krispy Kreme Sinks on Weak Earnings and Revenue Miss: Doughnut chain Krispy Kreme tumbled 22% after reporting disappointing fourth-quarter results. The company posted adjusted earnings of just 1 cent per share on revenue of $404.0 million. 
  • Hims & Hers Health Sinks on Disappointing Gross Margins: Telehealth company Hims & Hers Health saw its shares plummet 22% after reporting weaker-than-expected fourth-quarter gross margins. 

As Tuesday’s trading session came to a close, markets remained under pressure, with the S&P 500 extending its losing streak to four days and the Nasdaq dropping over 1% as tech stocks faced heavy selling. Weak consumer confidence data added to mounting concerns over economic growth, pushing Treasury yields lower as investors moved into safer assets. The Dow managed to post modest gains, supported by defensive stocks, while bank shares slipped amid rising recession fears. In the currency markets, the US dollar weakened against the euro and yen, while gold fell sharply after failing to hold above $2,950. Oil prices also declined as geopolitical uncertainty and trade tensions weighed on sentiment. With markets digesting the latest data, investors are looking ahead to further economic releases and potential policy developments that could shape market direction in the coming days.