[New York Stock Market] Nasdaq Down 1.21% Amid Tech Stock Sell-off...

Dow Rebounds
AI Defense Stock Palantir Down 10%
Market Focuses on PCE Price Index

Major indices on the U.S. New York Stock Exchange closed mixed. The Dow Jones Industrial Average (Dow) managed to rebound, but the Nasdaq and Standard & Poor's (S&P) 500 indices fell for the third consecutive trading day due to selling pressure on tech stocks. This is attributed to lingering effects of weak February economic data and market reactions to news of tariffs imposed by U.S. President Donald Trump on Mexico and Canada.

On the 24th (local time) in New York, the blue-chip-focused Dow Jones Industrial Average closed at 43,461.21, up 33.19 points (0.08%) from the previous day. The large-cap-focused S&P 500 index fell 29.88 points (0.50%) to 5,983.25, and the tech-heavy Nasdaq index dropped 237.08 points (1.21%) to 19,286.92.

All three major indices initially appeared to rebound due to bargain buying shortly after the market opened, but large tech stocks came under pressure and led the decline. The Nasdaq briefly recorded a year-to-date (YTD) negative return during the session. Subsequently, the Dow's gains narrowed, while the S&P 500 and Nasdaq saw their losses widen.

News that Microsoft (MS) terminated lease agreements involving hundreds of megawatts with at least two private data center operators weighed on the market. Additionally, President Trump's announcement of tariffs on major U.S. trading partners has raised concerns about a trade war, adding to market pressure. On the same day, President Trump confirmed that tariffs on imports from Mexico and Canada would be imposed as scheduled starting March 4.

Weak economic data from February also fueled the downward trend. According to S&P Global, the U.S. Services Purchasing Managers' Index (PMI) for February was 49.7, contracting for the first time in 25 months since January 2023.

Scott Helfstein, Head of Investment Strategy at Global X, analyzed, "During the first four weeks of President Trump's term, he enjoyed investor support, but now the 'honeymoon' period seems to be ending."

By individual stocks, AI defense company Palantir fell more than 10%, dragging down the tech-heavy indices. Nvidia, ahead of its earnings announcement, dropped 3.09%, and Microsoft shares declined 1.03%. Major semiconductor stocks also underperformed. Semiconductor design company Broadcom fell 4.91%, Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest foundry, dropped 3.32%, AMD declined 2.46%, Intel 2.41%, and Qualcomm 2.62%. Consequently, the Philadelphia Semiconductor Index fell 2.59%. Apple shares rose 0.63% after announcing before the market opened that it would invest a total of $500 billion in the U.S. over the next four years.

Market attention is focused on the January Personal Consumption Expenditures (PCE) price index, which will be released just before the weekend. The PCE price index is the Federal Reserve's preferred inflation gauge. If this index is not stronger than expected, concerns about inflation spikes due to tariffs and economic slowdown may ease somewhat.

Clark Bellin, President and Chief Investment Officer of Bellwether Wealth, told CNBC, "The January PCE will be very important to the market," adding, "It will help confirm whether inflation actually surged in early 2025, especially since other January inflation figures like CPI and PPI showed strong readings."

Bellin added, "Regardless of what Friday's PCE shows, the Federal Reserve is likely to hold off on interest rate decisions for at least the next six months."

U.S. Treasury yields declined as investors awaited key inflation data and housing indicators. The 10-year Treasury yield fell nearly 2 basis points to 4.402%, and the 2-year Treasury yield dropped to 4.175%. One basis point equals 0.01%, and yields move inversely to prices.