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Markets crave stability and predictability. Lately (since Trump’s re-election), however, that has been in short supply. From the president’s renewed threats to impose tariffs on Canada, Mexico, China, and Europe to the rapid deterioration of U.S.-Ukraine relations, uncertainty is the only constant.
Adding to the turbulence are two former U.S. stock market powerhouses, Nvidia and Tesla. Nvidia stock suffered an 8.5% drop on Thursday, likely due to a mix of profit-taking and concerns over fears of shrinking margins given Blackwell’s production ramp-up, dragging down its industry peers.
Tesla, meanwhile, faced problems of a different kind: its European sales plunged 45% in January compared to December. The problem causing Tesla stock plunge is not the economic slowdown but the growing consumer backlash against Elon Musk, whose increasing political involvement alienates potential buyers.
This contributed to a risk aversion in February, with the S&P 500 and Nasdaq closing in the red. As for digital assets, bitcoin also ended the month in the negative. The question now is whether the optimism sparked by the news of the Strategic Cryptocurrency Reserve will be enough to turn the situation around.
For those who missed it, on Sunday, the U.S. president took Truth Social to announce that his executive order on digital assets has tasked the Presidential Task Force to establish a “Strategic Cryptocurrency Reserve.” According to Trump, the reserve will initially include XRP, SOL, ADA, ETH, and BTC.
What’s moving the markets this week?
Beyond the looming tariffs on China, Mexico, and Canada — which will go into effect on March 4 unless Trump delays them again — investors will be watching Broadcom’s quarterly earnings report on Thursday. A worse-than-expected number, especially the outlook, could trigger a broad selloff in chip stocks.
In macroeconomic data, Friday’s nonfarm payrolls (NFP) release will be another key factor for the risk sentiment. Analysts expect 135,000 new jobs, down from 143,000 previously. This comes at a time when both Trump and Musk are pushing for deep cuts in the federal workforce.
Finally, on the monetary policy front, the ECB will announce its rate decision on Thursday. In addition, this week is the last chance for Fed officials to speak before the FOMC meeting scheduled for March 18-19. Speeches by Michelle Bowman, John Williams, and Raphael Bostic are expected to provide further insight.
