As bearish sentiment tightened its grip on the markets by the week’s end, stocks and various financial securities known for their price fluctuations experienced significant declines. Heightened trade tensions, lackluster earnings, and indications of economic weakness further eroded investor confidence.
President Donald Trump reignited threats of a 25% tariff on imports from Mexico and Canada, set to be implemented on Tuesday. He also directed his attention towards European Union products, including automobiles, and announced an additional 10% tariff on Chinese imports.
The comprehensive trade measures unsettled the markets, leading to widespread sell-offs, particularly impacting cryptocurrencies as investors exhibited heightened risk aversion.
A decline and a crypto breach
After briefly recovering from a drop below $80,000 during Friday’s early trading, Bitcoin has entered a bear market, having fallen over 20% from its peak. The sentiment within the digital asset sector deteriorated sharply following a colossal security breach at Bybit, where hackers made off with $1.5 billion worth of Ethereum in one of the most significant crypto thefts ever recorded.
Tech darling can’t change the tide
The booming artificial intelligence sector experienced a setback as investors reconsidered its inflated valuations. Nvidia Corp. faced significant losses despite reporting earnings that surpassed expectations but did not impress investors accustomed to exceptional growth. This steep decline negatively impacted peers such as Advanced Micro Devices Inc., Broadcom Inc., Qualcomm Inc., and Intel Corp.
New signs of weakness
Emerging signs of vulnerability within economic data heightened investor unease. Although the fourth-quarter gross domestic product remained steady at an annualized growth rate of 2.3%, inflation indicators for the quarter were revised upwards.
In January, personal spending fell by 0.2% month over month, marking the first decrease since March 2023. The Personal Consumption Expenditure price index — the Federal Reserve’s preferred measure of inflation — came in at 2.5% as anticipated, remaining above the 2% target.
Housing data was disappointing as well, with pending home sales dropping 4.6% in January, reaching their lowest level on record. Persistently high mortgage rates have continued to affect affordability, dampening demand in the housing market.
The labor market displayed signs of softening, evidenced by a 22,000 increase in weekly jobless claims, reaching a total of 242,000 — the highest level in over two months.
GM increases dividend
General Motors Co. acknowledged its shareholders with a hike in dividends and announced a new buyback initiative. The automaker raised its quarterly dividend by three cents to 15 cents per share, effective from the next payout in April. GM also approved a new $6 billion share repurchase program, which includes a $2 billion accelerated buyback initiative.
Benzinga is a financial news and data company headquartered in Detroit.
