Technical analysis & fundamentals

Markets diverge as tech struggles, all eyes on Nvidia

David Morrison

SENIOR MARKET ANALYST

26 Feb 2025 - 2min Read

US markets closed out Tuesday with a mixed performance. The S&P 500 extended its losing streak to a fourth straight session, while the Nasdaq once again bore the brunt of selling. In contrast, the Dow outperformed.

Overnight, Asian markets saw varied movements—Hong Kong surged over 3.5% as it pledged to become an AI hub, while China added 1%. European futures signal a stronger open, with key earnings from Aston Martin, Deutsche Telekom, and Danone on deck.

Wall Street recap

The S&P 500 and Nasdaq continued their declines, while the Dow managed to outperform. Tech remained under pressure, with Tesla plunging 8% after its upgraded self-driving system failed to impress Chinese consumers. The stock is now down 25% year-to-date.

Meanwhile, Super Micro Computer jumped 22% ahead of the Nasdaq’s financial filing deadline.

Global markets

Asian markets delivered a mixed session—Hong Kong rallied over 3.5% on AI-driven optimism, while China’s Shanghai Composite added 1%. European futures point to early gains, with a focus on corporate earnings.

FX and commodities

Currency markets remained muted, with the yen underperforming. Support for the USDJPY comes in around the 148.50 level, and this has been held since October. The US dollar saw modest gains following yesterday’s weak consumer confidence data.

Gold remains flat but continues to struggle with resistance around the 2950/oz level, while silver was mixed. Oil sits just above $69 per barrel, with today’s inventory report expected to show a 2.5 million-barrel build. Supply remains ample, and demand weak, keeping the bears in control. Gas also declined, finding resistance around 4.5 bth.

Volatility and market risks

The VIX held around 18, highlighting the current market uncertainty. Nvidia’s earnings after tonight’s close are in sharp focus. If these fall outside market expectations, they could affect the broader market.

Key developments and data ahead

Housing and oil data: Housing and energy markets are today’s key economic releases.
G20 meeting: Global economic discussions underway.
China’s banking sector: Beijing announced plans to recapitalize banks.
US political moves: Republicans passed a budget blueprint supporting US President Trump’s tax cut plans.
Russia-US relations: Moscow remains cold on negotiations, stating that former US President Biden has worsened the situation.

Market outlook

The Nasdaq and S&P 500 remain on different paths from the Dow, highlighting a growing market divergence. The outlook for the US dollar remains uncertain as data, tariff concerns, and rate expectations create a muddled picture. Gold pulls back, oil struggles, and Nvidia’s earnings loom large as potential market-moving events.