The S&P 500 Index ($SPX) (SPY) on Friday closed down -0.43%, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -1.05%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.30%. March E-mini S&P futures (ESH26) fell -0.47%, and March E-mini Nasdaq futures (NQH26) fell -0.38%.
Stock indexes on Friday added to Thursday’s losses, with the Dow Jones Industrial Average falling to a 3.5-week low as the disruptive potential of AI weighed on markets. Bank stocks tumbled on Friday as the collapse of the UK’s private lender Market Financial Solutions Ltd added to fears that banks could face rising defaults. Also, the weakness in software companies and cybersecurity stocks weighed on the broader market. In addition, stocks fell after the US Jan PPI report rose more than expected, dampening any speculation that the Fed would cut interest rates in the near term.
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Stock indexes recovered from their worst levels on Friday after the Feb MNI Chicago PMI and Dec construction spending reports rose more than expected, which are signs of economic strength. Also, Dell Technologies surged more than +21% following a strong sales forecast for its AI servers. In addition, lower bond yields are supportive of stocks as the 10-year T-note yield fell to a 4-month low Friday at 3.96%.
US Jan PPI final demand rose +0.5% m/m and +2.9% y/y, stronger than expectations of +0.3% m/m and +2.6% y/y. Jan PPI ex-food and energy rose +3.6% y/y, stronger than expectations of +3.0% y/y and the largest increase in 10 months.
The US Feb MNI Chicago PMI unexpectedly rose by 3.7 points to 57.7, stronger than expectations of a decline to 52.1 and the fastest pace of expansion in 3.75 years.
US Dec construction spending rose +0.3% m/m, stronger than expectations of +0.2% m/m.
Geopolitical risks remain a negative for stocks. WTI crude oil (CLJ26) rallied more than +2% to a 7-month high on Friday after President Trump sounded downbeat about diplomatic talks with Iran, saying, “They cannot have nuclear weapons, and we’re not thrilled with the way they’re negotiating.” Axios reported that US negotiators, Kushner and Witkoff, left Geneva disappointed by what they heard from Iranian officials in the US-Iranian nuclear talks. Iran’s state media reported that Iran won’t allow enriched uranium to leave the country. The enrichment of uranium remains a sticking point in the nuclear negotiations, with the US saying Iran would have to send such stocks of uranium to another country or dilute them. The nuclear talks are scheduled to resume next week in Vienna. President Trump said that he’s considering a limited military strike on Iran to ramp up pressure on the country to strike a deal over its nuclear program and gave them a March 1-6 deadline for an agreement over the country’s nuclear activities and has threatened military strikes if it fails to comply.
In Tuesday night’s State of the Union address, President Trump doubled down on his commitment to tariffs. President Trump’s new 10% global tariffs went into effect on Tuesday after the Supreme Court struck down his global “reciprocal” tariffs last Friday. Mr. Trump subsequently threatened to raise the global tariff rate to 15%, and an administration official said the White House is working on a formal order to implement that higher rate, but the timeline for its implementation has not been finalized. Mr. Trump is applying the 10% baseline levy under Section 122 of the 1974 Trade Act, which allows the president to impose the charge for 150 days without congressional approval.
Q4 earnings season is nearing its end, with more than 90% of the S&P 500 companies having reported earnings results. Earnings have been a positive factor for stocks, with 74% of the 472 S&P 500 companies that have reported beating expectations. According to Bloomberg Intelligence, S&P earnings growth is expected to climb by +8.4% in Q4, marking the tenth consecutive quarter of year-over-year growth. Excluding the Magnificent Seven megacap technology stocks, Q4 earnings are expected to increase by +4.6%.
The markets are discounting a 6% chance for a -25 bp rate cut at the next policy meeting on March 17-18.
Overseas stock markets settled mixed on Friday. The Euro Stoxx 50 closed down -0.38%. China’s Shanghai Composite closed up +0.39%. Japan’s Nikkei Stock 225 closed up +0.16%.
Interest Rates
March 10-year T-notes (ZNH6) on Friday closed up by +14 ticks. The 10-year T-note yield fell -4.2 bp to 3.962%. Mar T-notes rallied to a 4.5-month high on Friday, and the 10-year T-note yield fell to a 4-month low of 3.955%. Friday’s stock slump has boosted safe-haven demand for T-notes. Also, private credit jitters and heightened US-Iran tensions boosted safe-haven demand for T-notes. In addition, end-of-month buying by bond dealers boosted T-notes as they extended the duration of their portfolios and bought longer-term government debt.
European government bond yields moved lower on Friday. The 10-year German bund yield dropped to a 3.5-month low of 2.643% and finished down -4.7 bp on that low. The 10-year UK gilt yield fell to a 14.75-month low of 4.231% and finished down -4.2 bp to 4.233%.
Eurozone Jan ECB 1-year CPI expectations fell to 2.6%, weaker than expectations of 2.7%. Jan 2-year CPI expectations were unchanged from Dec at 2.6%, stronger than expectations of 2.5%.
German Feb CPI (EU harmonized) rose +0.4% m/m and +2.0% y/y, weaker than expectations of +0.5% m/m and +2.1% y/y.
Swaps are discounting a 4% chance of a -25 bp rate cut by the ECB at its next policy meeting on March 19.
US Stock Movers
Bank stocks and credit card companies sank on Friday as the collapse of the UK’s private lender Market Financial Solutions Ltd added to fears that banks could face rising defaults. American Express (AXP) closed down more than -7% to lead losers in the Dow Jones Industrials. Also, Goldman Sachs (GS) closed down more than -7%, and Morgan Stanley (MS), Capital One Financial (COF), and Synchrony Financial (SYF) closed down more than -6%. In addition, Wells Fargo (WFC), Citigroup (C), Citizens Financial Group (CFG), and Regions Financial (RF) closed down more than -5%.
Chipmakers slid on Friday, weighing on the overall market. Nvidia (NVDA) closed down more than -4%, and NXP Semiconductors NV (NXPI), Lam Research (LRCX), and Qualcomm (QCOM) closed down more than -2%. Also, Advanced Micro Devices (AMD) and ARM Holdings Plc (ARM) closed down more than -1%.
Zscaler (ZS) closed down more than -12% to lead cybersecurity stocks lower and losers in the Nasdaq 100 despite reporting Q2 adjusted EPS of $1.01, better than the consensus of 90 cents. Also, Okta (OKTA) closed down more than -4%, and CrowdStrike Holdings (CRWD) closed down more than -2%. In addition, Cloudflare (NET) closed down more than -1%.
Software stocks retreated on Friday, a negative factor for the broader market. Atlassian (TEAM) closed down more than -5%, and Datadog (DDOG), Oracle (ORCL), and Thomson Reuters (TRI) closed down more than -3%. Also, Salesforce (CRM) closed down more than -2%, and Microsoft (MSFT) and ServiceNow (NOW) closed down more than -1%.
Airline stocks sold off on Friday after WTI crude oil jumped to a 7-month high, which will boost jet fuel prices and potentially cut into airlines’ profits. United Airlines Holdings (UAL) closed down more than -8% to lead losers in the S&P 500. Also, American Airlines Group (AAL), Delta Air Lines (DAL), and Alaska Air Group (ALK) closed down more than -6%. In addition, Southwest Airlines (LUV) closed down more than -3%.
CoreWeave (CRWV) closed down more than -18% after reporting a Q4 loss per share of -89 cents, wider than the consensus of -72 cents per share.
Flutter Entertainment Plc (FLUT) closed down more than -14% after reporting Q4 revenue of $4.74 billion, below the consensus of $4.94 billion, and forecasting full-year US revenue of $7.4 billion to $8.2 billion, weaker than the consensus of $8.73 billion.
Duolingo (DUOL) closed down more than -14% after forecasting full-year revenue of $1.20 billion to $1.22 billion, well below the consensus of $1.26 billion.
Apollo Global Management (APO) closed down more than -8% after cutting its quarterly dividend to 31 cents a share from 38 cents, citing a markdown in its portfolio from soured loans.
Rocket Lab (RKLB) closed down more than -5% after pushing back the launch of its Neutron rocket to the fourth quarter of this year.
Dell Technologies (DELL) closed up more than +21% to lead gainers in the S&P 500 after reporting Q4 adjusted operating income of $3.54 billion, better than the consensus of $3.27 billion, raised its annual dividend by 20%, and boosted its stock buyback program by $10 billion.
Paramount Skydance (PSKY) closed up more than +20% after agreeing to pay $111 billion for Warner Bros Discovery, outbidding Netflix for the company.
Block (XYZ) closed up more than +16% after raising its full-year gross profit estimate to $12.20 billion from a previous estimate of $11.98 billion, above the consensus of $11.91 billion, and said it was reducing its workforce by nearly half.
Netflix (NFLX) closed up more than +13% to lead gainers in the Nasdaq 100 after dropping out of the competition to acquire Warner Bros Discovery.
NCR Atleos Corp (NATL) closed up more than +5% after being acquired by The Brink’s Company for $6.6 billion.
Autodesk (ADSK) closed up more than +4% after reporting Q4 adjusted EPS of $2.85, stronger than the consensus of $2.65, and forecasting 2027 adjusted EPS of $12.29 to $12.56, well above the consensus of $11.59.
Caris Life Sciences (CAI) closed up more than +4% after forecasting full-year revenue of $1.00 billion to $1.02 billion, stronger than the consensus of $993 million.
Earnings Reports(3/2/2026)
AAON Inc (AAON), ADT Inc (ADT), AES Corp/The (AES), AST SpaceMobile Inc (ASTS), Ingram Micro Holding Corp (INGM), MongoDB Inc (MDB), Norwegian Cruise Line Holdings (NCLH), Sealed Air Corp (SEE), Trump Media & Technology Group (DJT).
On the date of publication,
Rich Asplund
did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.
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