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Stocks Recover Early Losses and Close Higher as Magnificent Seven Stocks Rebound

Stocks Recover Early Losses and Close Higher as Magnificent Seven Stocks Rebound

  • 22.03.2025 16:32
  • theglobeandmail.com
  • Keywords: Stock Recovery, Market Rally

Stocks recovered from early losses to close higher as key tech and industrial stocks rebounded, despite weaker earnings forecasts from FedEx, Micron, and Nike. Geopolitical tensions in the Middle East and concerns over US tariffs weighed on sentiment, while hawkish Fed comments pushed bond yields higher.

SMCI ProductsFDXsentiment_dissatisfiedMUsentiment_dissatisfiedNKEsentiment_dissatisfiedTSLAsentiment_satisfiedAAPLsentiment_satisfiedMETAsentiment_satisfiedMSFTsentiment_satisfiedGOOGLsentiment_satisfiedAMZNsentiment_satisfiedSMCIsentiment_satisfiedBA/PAsentiment_satisfiedNCLHsentiment_satisfiedALNYsentiment_satisfiedLRCXsentiment_dissatisfiedAMATsentiment_dissatisfiedKLACsentiment_dissatisfiedNVDAsentiment_dissatisfiedLMTsentiment_dissatisfiedLENsentiment_dissatisfiedPHMsentiment_dissatisfiedTOLsentiment_dissatisfiedNUEsentiment_dissatisfied

Estimated market influence

FedEx

FedEx

Negativesentiment_dissatisfied
Analyst rating: Buy

Cut profit outlook due to cost pressures and weaker demand.

Micron Technology

Micron Technology

Negativesentiment_dissatisfied
Analyst rating: Buy

Forecasted Q3 adjusted gross margin below consensus, leading chip stocks lower.

Nike

Nike

Negativesentiment_dissatisfied
Analyst rating: Buy

Blaming tariffs and geopolitics for earnings woes.

Tesla

Tesla

Positivesentiment_satisfied
Analyst rating: Neutral

Led gainers in Nasdaq 100 with over +5% close.

Apple

Apple

Positivesentiment_satisfied
Analyst rating: Buy

Closed up more than +1%.

Meta Platforms

Meta Platforms

Positivesentiment_satisfied
Analyst rating: Strong buy

Closed up more than +1%.

Microsoft

Microsoft

Positivesentiment_satisfied
Analyst rating: Strong buy

Closed up more than +1%.

Alphabet

Alphabet

Positivesentiment_satisfied
Analyst rating: Buy

Closed up +0.73%.

Amazon.com

Amazon.com

Positivesentiment_satisfied
Analyst rating: Strong buy

Closed up +0.65%.

Super Micro Computer

Super Micro Computer

Positivesentiment_satisfied
Analyst rating: Buy

Led gainers in S&P 500 after JPMorgan upgrade.

Boeing

Positivesentiment_satisfied
Analyst rating: —

Closed up more than +3% after US government fighter jet contract.

Norwegian Cruise Line Holdings

Norwegian Cruise Line Holdings

Positivesentiment_satisfied
Analyst rating: N/A

Upgraded by Morgan Stanley with price target of $22.

Alnylam Pharmaceuticals

Alnylam Pharmaceuticals

Positivesentiment_satisfied
Analyst rating: Buy

Won expanded approval for heart drug, leading to +11% close.

Lam Research

Lam Research

Negativesentiment_dissatisfied
Analyst rating: Buy

Closed down more than -2% due to Micron's forecast.

ASML Holding NV

Negativesentiment_dissatisfied
Analyst rating: N/A

Closed down more than -2% due to Micron's forecast.

Applied Materials

Applied Materials

Negativesentiment_dissatisfied
Analyst rating: Buy

Closed down more than -1% due to Micron's forecast.

KLA Corp

KLA Corp

Negativesentiment_dissatisfied
Analyst rating: Buy

Closed down more than -1% due to Micron's forecast.

Nvidia

Nvidia

Negativesentiment_dissatisfied
Analyst rating: Strong buy

Closed down more than -1% due to Micron's forecast.

NXP Semiconductors NV

Negativesentiment_dissatisfied
Analyst rating: N/A

Closed down more than -1% due to Micron's forecast.

Lockheed Martin

Lockheed Martin

Negativesentiment_dissatisfied
Analyst rating: Buy

Lost contract to Boeing, closed down more than -4%.

Lennar Corp

Lennar Corp

Negativesentiment_dissatisfied
Analyst rating: Buy

Reported weaker Q1 home sales and forecasted lower Q2 new orders.

PulteGroup

PulteGroup

Negativesentiment_dissatisfied
Analyst rating: Buy

Closed down more than -2% due to housing market concerns.

DR Horton

Negativesentiment_dissatisfied
Analyst rating: N/A

Closed down more than -1% due to housing market concerns.

Toll Brothers

Toll Brothers

Negativesentiment_dissatisfied
Analyst rating: Buy

Closed down more than -1% due to housing market concerns.

Valmont Industries

Negativesentiment_dissatisfied
Analyst rating: N/A

Downgraded by William Blair & Co.

Nucor

Nucor

Negativesentiment_dissatisfied
Analyst rating: Buy

Forecasted lower Q1 EPS, closed down more than -5%.

Context

Business Insights and Market Implications Analysis

Market Performance

  • S&P 500 Index closed up +0.08%
  • Dow Jones Industrials Index closed up +0.08%
  • Nasdaq 100 Index closed up +0.39%

Stock Movers

Gainers

  • Tesla (TSLA): Closed up more than +5%, leading the Nasdaq 100.
  • Apple (AAPL), Meta Platforms (META), Microsoft (MSFT): All closed up more than +1%.
  • Alphabet (GOOGL): Closed up +0.73%.
  • Amazon.com (AMZN): Closed up +0.65%.

Losers

  • FedEx (FDX): Closed down more than -6%, citing cost pressures and weaker demand.
  • Micron Technology (MU): Closed down more than -8%, forecasting Q3 adjusted gross margin below consensus.
  • Nike (NKE): Closed down over -5%, blaming tariffs and geopolitics for earnings woes.

Economic Concerns

  • Global Economic Outlook: Weakness in FedEx, Micron, and Nike results added to concerns over global economic growth.
  • US Tariffs Impact: Fears that tariffs will weaken corporate earnings and economic growth.

Geopolitical Risks

  • Middle East Tensions: Heightened risks due to Israeli airstrikes on Gaza and US strikes in Yemen.
  • Market Volatility: Geopolitical tensions added pressure to stock markets.

Interest Rates and Bond Markets

  • 10-Year T-Note Yield: Rose +0.9 bp to 4.246%.
  • European Bond Yields: Mixed, with German bunds falling (-1.5 bp) and UK gilts rising (+6.7 bp).

Monetary Policy Insights

  • Fed Comments: Hawkish signals from NY Fed President Williams and Chicago Fed President Goolsbee supported steady policy.
  • ECB Rate Cut Chances: ECB Governing Council member Stournaras suggested potential rate cuts in April, with swaps discounting a -25 bp cut at 59%.

Sector-Specific Challenges

Technology and Chip Industry

  • Micron Technology: Led chip stocks lower after weak earnings forecast.
  • Lam Research (LRCX), ASML Holding NV (ASML): Both closed down more than -2%.

Homebuilding Sector

  • Lennar Corp (LEN): Closed down more than -4% due to weak Q1 home sales and inventory issues.
  • PulteGroup (PHM), DR Horton (DRI), Toll Brothers (TOL): All closed down more than -1%.

Materials and industrials

  • Valmont Industries (VMC): Downgraded by William Blair & Co.
  • Nucor (NUE): Closed down more than -5% after weak earnings forecast.

Competitive Dynamics

  • Boeing (BA): Gained +3% after winning a $2B contract to build next-generation US fighter jets over Lockheed Martin.
  • Lockheed Martin (LMT): Lost -4% due to losing the fighter jet contract.

Upcoming Earnings Reports

  • Companies scheduled for March 24, 2025: Aerovate Therapeutics Inc (AVTE), AMMO Inc (POWW), Enerpac Tool Group Corp (EPAC), Intuitive Machines Inc (LUNR), KB Home (KBH).

Market Sentiment and Volatility

  • Triple-Witching Event: Caused higher volatility as $4.5 trillion in options and futures contracts expired.
  • Safe-Haven Demand: Initially boosted T-note demand due to stock market weakness.

Long-Term Effects and Risks

  • Global Trade Policy: Ongoing US tariffs and geopolitical tensions could impact corporate earnings and global growth.
  • Monetary Policy Uncertainty: Hawkish Fed comments and potential ECB rate cuts could influence market dynamics in the long term.