Daily Market Summary – Feb 23rd

Markets plunge on tariffs, AI fears

The Dow Jones Industrial Average plunged nearly 800 points as investors panicked over risks of an AI bubble bursting alongside escalating tariff threats from President-elect Trump, dragging broader markets lower amid fears of disrupted global trade and supply chains. This sell-off intensified with the US Supreme Court ruling against several Trump-era tariffs, striking down protectionist measures under the International Emergency Economic Powers Act and limiting presidential authority on economic emergencies, which eased some trade barriers but sparked uncertainty over future policies. EU lawmakers halted progress on a transatlantic trade deal and postponed votes amid the tariff upheaval, declaring no acceptance of US increases and risking broader disruptions to commerce, while Panama annulled CK Hutchison's port concessions, signaling shifting control in key logistics hubs. Veteran CEOs lambasted Trump's chaotic tariff approach as ineffective and damaging to global growth, supply chains, and markets, with Swiss industry groups and others criticizing the hikes for sowing economic chaos; markets reacted with sharp drops in futures, gold surging above $5,100 as a safe haven, and the US dollar recovering amid trader bets on Trump's next moves.

Oil deals, energy shifts

Supreme Court developments extended to ExxonMobil and Suncor's appeal against a Colorado climate lawsuit alleging public deception on fossil fuels, alongside ExxonMobil's bid for compensation from Cuba over expropriated 1960s assets, while Chevron advanced to acquire Lukoil's stake in Iraq's West Qurna 2 oilfield, a major producer exceeding 300,000 barrels daily, amid geopolitical tensions prompting Lukoil's potential exit. Oil prices slid on hopes of an Iran nuclear deal boosting supply, though traders were warned of underestimating risks, with Dow, S&P 500, and Nasdaq futures slipping further on tariff fallout and upcoming US-Iran talks; Europe anticipated record LNG imports for diversification from Russia, complemented by Saudi Arabia's new deal for US liquefied natural gas, marking a geopolitical pivot that bolsters American energy exports. America's nuclear energy sector gained renewed momentum through policy support, technological advances, and investments, positioning it for a clean power revival, even as Russia's economy faced self-inflicted damage from war on Ukraine, cannibalizing productive capacity according to former central bank advisers.

AI investments, warnings

AI dominated high-stakes narratives, with Bridgewater forecasting Big Tech's $650 billion investment in 2026 fueling surges in stocks like Nvidia, which reached unprecedented valuations amid anticipation for its earnings report potentially swinging shares 7-11% on AI chip sales and data center growth. ASML unveiled an EUV light source breakthrough promising 50% more chip production by 2030, while SK Hynix pledged ramped-up AI memory chips including high-bandwidth memory to capture surging demand; however, warnings emerged of AI agents automating jobs en masse, potentially destroying the global economy via labor disruptions, slashed spending, and deflationary spirals. Anthropic disclosed Chinese firms leveraging its Claude model to build proprietary AI, OpenAI allied with consultants for enterprise expansion and full-scale deployments, and C.H. Robinson's CEO predicted AI-driven freight brokerage consolidation; yet software firms grappled with AI threats to models alongside higher borrowing and regulation.

Inflation rises, credit risks

Inflation pressures accelerated with New York Fed's December measure rising sharply amid resilient data, complicating Fed Governor Christopher Waller's view of a March rate cut as a "coin flip" post-strong jobs report, with signals of holding steady if data remains robust; US economy showed Q4 GDP growth at 3.1%, unemployment at 3.7%, cooling inflation to 3.1%, robust spending, and job gains ahead of Biden's address, though debt and rates lingered. Private credit markets drew scrutiny, with Blue Owl Capital's $200 billion assets rattling the $1.7-1.8 trillion sector over defaults, liquidity risks, and high rates; Treasury's Scott Bessent monitored closely, asset-manager stocks slumped, and anxiety spread amid economic uncertainty.

Pharma setbacks, deals

Pharmaceutical giants faced turbulence: Novo Nordisk's market value erased $475 billion from Wegovy gains, stock at five-year lows after CagriSema trial setback shifting focus to M&A, while AbbVie invested $380 million in new North Chicago facilities, Merck planned a cancer business spin-off to counter Keytruda patent expiry, and Eli Lilly eyed a multi-dose injector for weight-loss drugs to enhance adherence and sales. Gilead Sciences agreed to acquire Arcellx for up to $7.8 billion, bolstering oncology with CAR-T therapies for myeloma and tumors; Bayer sued Johnson & Johnson over misleading prostate cancer drug marketing diverting sales.

Freight recovery signals

Freight and logistics signals mixed recovery: Q1 2026 reports on shipper, carrier, and brokerage rates forecasted rises from supply chain pressures, trade disruptions, capacity constraints, and economic rebound, with used truck prices and sales climbing, TL carriers poised for strong 2026 rebound, though importers battled bureaucratic delays for tariff refunds straining cash flows. Killing of a cartel boss disrupted US-Mexico freight corridors with delays and security jitters; Supreme Court IEEPA limits reshape freight via altered sanctions and trade flows.

Fintech slumps, crypto volatility

Financial tech buzzed with PayPal's stock slump attracting takeover interest post-decline, Crypto.com gaining conditional national trust bank charter for expanded custody and regulated finance integration, Standard Chartered predicting stablecoins holding $1 trillion US Treasuries by 2028; Trump-backed stablecoin from World Liberty Financial slipped amid alleged attack claims, Ethereum co-founder sold large ETH amid volatility, Bitcoin dipped below $65,000-66,000 triggering $500 million liquidations and five-week fund losses of $4 billion, hedge funds exiting US Bitcoin funds.

Consumer sectors decline

Consumer and cyclical sectors buckled under pressures: restaurant chains like First Watch, Wingstop, CAVA, Shake Shack, Bloomin' Brands, Chipotle, Kura Sushi, Dine Brands, BJ's, Red Robin, Texas Roadhouse, Starbucks, Cracker Barrel, Dutch Bros, Brinker, Sweetgreen, Portillo's, and Arcos Dorados plunged on earnings misses, slowing growth, costs, and macro hits in Latin America. Airlines including American, United, Delta, Viking, Frontier tumbled alongside travel like Carnival, Hilton Grand Vacations, Lindblad, Wyndham, Marriott Vacations, Sabre; consumer discretionary as Nike, Under Armour, Peloton, Levi's, PVH, Bark, Harley-Davidson, DoorDash, Booking, Chewy, Wayfair, Expedia weakened on spending signals.

Equity declines across sectors

Broader equity declines hit apparel like Columbia Sportswear, Kontoor, Figs, Wolverine, Somnigroup, Lovesac, VF Corp, Funko, ThredUp, Stitch Fix, Ralph Lauren, Carter's; leisure and gaming as Wynn Resorts, Caesars, PENN, Red Rock, Steven Madden, PlayStudios, Genesco, MGM; retail and home as Zillow, Malibu Boats, Cushman & Wakefield, H&R Block, La-Z-Boy, Opendoor, fuboTV, Movado, Leggett & Platt, Hasbro; tech and services like iHeartMedia, Cable One, Bally's, Deckers, Super Micro, IBM, Taboola on ad slowdowns. Health care saw Guardant Health, PacBio, Align Technology, QuidelOrtho, Omnicell, iRhythm, Agilon, GoodRx, Fortrea, Myriad, Integra LifeSciences, Enovis, BrightSpring, IQVIA, Charles River, Medpace, Revvity, Azenta, Bio-Techne, Oscar drop amid sector woes.

Upcoming earnings, IPO news

Upcoming earnings loomed large across sectors: Nvidia's pivotal report, Home Depot and Lowe's on housing slowdowns, Domino's on sales beats, First Solar on solar ramps, Workday, DoorDash, CAVA, MercadoLibre, Planet Fitness, Trex amid demand trends; freight-focused Expeditors, Matson; health like Evolent, Option Care, Elanco, Globus Medical; tech GoDaddy, DigitalOcean, Zeta Global, Marqeta. IPO plans included Finnish quantum firm IQM at $1.8 billion valuation eyeing US listing, while Lamborghini scrapped luxury EV for hybrids citing zero demand, Volvo recalled 40,000 electric SUVs over fire risks, and Chinese Mixue overtook McDonald's as largest fast-food chain by stores.