Saturday, March 1, 2025

Markets wrap rough month driven by ‘Extreme Fear’

A Russian state media reporter gained entry to the Oval Office for Trump-Zelensky sit-down

Markets wrap rough month driven by ‘Extreme Fear’

Traders work on the floor of the New York Stock Exchange.

Angela Weiss/AFP/Getty Images

New York CNN —

US stocks seesawed Friday, but all three major indexes closed the month in the red — a sign of increasing unease in markets.

Volatility gripped markets as traders closed out a dismal February that wiped out some gains. “Extreme fear” was the sentiment driving markets on Friday and for the fourth day in a row, according to CNN’s Fear and Greed Index.

Stocks initially rose Friday morning, buoyed by cooling inflation data that provided relief for investors. Yet markets moved into the red midday following a very public heated exchange at the White House between President Donald Trump and Ukraine President Volodymyr Zelensky that stoked uncertainty around geopolitical stability.

The VIX, Wall Street’s fear gauge, popped to its highest level this year.

In afternoon trading, markets recouped losses, and the major indexes surged higher to close out the day. The Dow ended the day up 601 points, or 1.39%, while the broader S&P 500 rose 1.59% and the Nasdaq Composite gained 1.63%.

Yet US markets sputtered in February and slid this week. The benchmark S&P 500 slid 1% this week and is down 1.4% this month. The tech-heavy Nasdaq was down 3.5% this week and 4% this month, its worth month since April 2024.

“We believe there is valid concern in the markets about the amount of money being spent on Artificial Intelligence datacenters and capex, considering news from China AI startup DeepSeek in late January,” said Larry Tentarelli, chief technical strategist at Blue Chip Daily Trend Report, in a Friday note.

Tentarelli said uncertainty about AI spending coupled with concerns about economic growth has led many of the stocks leading the Nasdaq to underperform.

The Nasdaq is heavily weighted toward tech and was driven higher last year by companies like Nvidia (NVDA), Tesla (TSLA) and Palantir (PLTR). Yet those surging tech stocks have slowed down this month. Tesla shares are down about 26% over the past month.

The reasons for the Nasdaq’s decline range from inflation risk to decelerating growth to its stocks having tough outlooks compared to other assets, said Ted Mortonson, managing director at Baird, in an email.

“Concerns about potential economic growth deceleration may be fostering increased risk aversion, potentially leading investors to shift away from the more volatile Nasdaq index in favor of more stable investment options,” said David Smith, a professor of economics at Pepperdine Graziadio Business School.

Nvidia posted strong quarterly earnings on Wednesday, though its stock’s high valuation raises the question of how much more room there is to run.

Still, the broader market remains near its all-time high, reached just last week. And the bumpiness in the market isn’t all that unusual for this time of year.

“The stock market’s recent declines are simply garden variety volatility, largely because February is historically a volatile month, and because we saw significant gains throughout January,” said Robert Ruggirello, chief investment officer at Brave Eagle Wealth Management.

Slowdown in consumer spending flashes warning signal

While new inflation data matched expectations, other economic data released Friday revealed cracks in the economy that contributed to weary investor sentiment: Consumer spending pulled back far more than economists expected in January and posted the biggest monthly decline since February 2021.

“Investors will continue to focus on the uncertain growth trajectory as real spending unexpectedly fell in January from weaker consumer demand,” said Jeffrey Roach, chief economist at LPL financial, in a note.

The Atlanta Federal Reserve Bank’s estimates for economic growth in the first quarter of 2025 were also revised on Friday to project a decline of 1.5%, rather than growth of 2.3%.

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“This huge drop in the estimate reflects the very weak data that has been coming out on retail sales, net imports, inventories and new home sales,” said Jay Hatfield, CEO and CIO at Infrastructure Capital Advisors, in an email.

Chris Zaccarelli, chief investment officer for Northlight Asset Management, said he is cautious about the market due to high valuations.

At UBS, strategists advised preparing for volatility ahead, though considered the bull market intact.

“We think the bull market is intact driven by healthy economic and profit growth, supportive Fed policy and AI spending/adoption,” said David Lefkowitz, head of US Equities at UBS Global Wealth Management, in a Friday note.

“But we have also cautioned that volatility would likely be higher this year due to policy uncertainty and trade frictions. Therefore, we have been highlighting that short-term hedges may be worth considering,” said Lefkowitz.

CNN’s Matt Egan and David Goldman contributed reporting.

21 comments

Consumers pull back and spend less because of Trump's Craziness destroying the government

It makes perfect sense to me. If you are worried that Trump is turning the U.S. into Hitler's Germany then it makes perfect sense why they would stop spending just to be able to move to another country or state as our democracy is going away because of Trump. Thinking that everything is going to be okay isn't an option because of Trump's Mental Illness and craziness and Musk's similar mental illness and his constant use of LSD.

Inflation is easing, but another alarm bell is ringing about the US economy

Economists were expecting the Personal Consumption Expenditures index to slow to 2.5%.

Charly Triballeau/AFP/Getty Images

CNN —

The Federal Reserve’s preferred inflation gauge cooled as expected in January; however, the good news came with another potential red flag for the US economic engine: Consumers pulled back their spending by the most in nearly four years.

The Personal Consumption Expenditures price index rose 2.5% in January from the year before, slowing from December’s 2.6% annual rate, according to Commerce Department data released Friday.

Consumer spending was expected to drop off in January: There’s typically a post-holiday expenditure hangover to start the year; plus, last month’s retail sales data came in far below forecasts.

But consumers pulled back far more than economists expected: Spending fell 0.2% for the month. Adjusted for inflation, it sank 0.5%. Those are the biggest monthly declines since February 2021.

Spending on goods — particularly autos and other big-ticket items — dropped off the most, Friday’s data showed. Consumers continued to spend on the essentials, such as housing and gas, while also putting their discretionary dollars toward eating out and other leisure activities at hotels.

Consumers deciding to ‘sit it out and wait’

At first glance, January’s spending slump, the first negative monthly reading in nearly two years, appears to substantiate an increasingly unsettling picture of the economic outlook.

Not only do price pressures remain, but a slew of recent data indicates that the US economy is indeed softening: GDP growth is slowing, business investment has been sluggish, consumer sentiment has soured, jobless claims are picking up and inflation expectations are on the rise.

However, economists note that January’s slowdown in consumer spending also could reflect factors such as frigid weather, deadly wildfires, a natural retreat from goods splurges the months before, auto dealers cutting incentives after a blockbuster December and also just pure caution.

“Consumers are scrambling to process the winds of change coming out of Washington, and have apparently decided to sit it out and wait,” Christopher Rupkey, chief economist at FwdBonds, wrote in a note to investors on Friday.

To be sure, as incomes shot higher in January (rising 0.9%), consumers socked those dollars away instead of spending. The personal saving rate skyrocketed in January, jumping to 4.6% from 3.5%, Friday’s report showed.

“Spending was much lower than expected; however, it came after pretty strong readings in the prior months — partly tied to holiday spending as well as the rebuild from the hurricanes that happened in October and September,” Beth Ann Bovino, US Bank’s chief economist, told CNN in an interview.

To that end, Bovino and others anticipate there could be a rebound in spending in the coming months, considering the labor market remains solid and as the Los Angeles area rebuilds from devastating wildfires.

“Beyond the dramatic drop in spending that could be explained as temporary, the report had good news on inflation and excellent news on income,” Robert Frick, corporate economist at Navy Federal Credit Union, wrote in commentary Friday. “Spending tends to follow income, and while consumers are jittery as evidenced by recent weak consumer sentiment and consumer confidence measures, if people have money, they usually spend it.”

Inching closer to 2%

Excluding food and energy prices, which tend to be more volatile, the closely watched core PCE price index rose 0.3% for the month and 2.6% from a year before, slowing from 2.9% in December.

The cost of food (especially eggs) and energy pushed up the Consumer Price Index and Producer Price Index readings for January. That had economists expecting PCE would rise about 0.3% from December but that the annual rate would slow to 2.5% from the initially reported 2.6%, FactSet estimates show.

“The good news from this report is that inflation didn’t come in hotter than we, and looks like markets, expected,” Bovino said. “We don’t think that cooler reading is going to change the Fed’s path, given a lot of uncertainty over inflationary White House policies; but it does reduce the risk of fewer cuts.”

Friday’s reading puts inflation back within striking distance of the Fed’s 2% target and indicates that some disinflationary trends are still in play.

However, close only counts in horseshoes and hand grenades.

The Fed itself indicated that it could take until 2027 for the pace of price hikes to stabilize at that 2% level.

It’s widely expected that the Fed will hold rates steady when policymakers meet in March. Given the latest inflation read, Bovino anticipates that the next cut could come in the summertime.

Sen. Elizabeth Warren, a Democrat from Massachusetts, on Friday raised alarm about the potential negative ramifications if the Fed does not move to cut rates.

“With flashing warning signs — dissipating labor gains, declining investment, and falling consumer confidence — today’s inflation data shows that the Fed has a small window to act to cut interest rates,” she said, categorizing the Trump administration’s policies as creating a “chaos economy.”

“At its meeting next month, the Fed should modestly cut rates to provide a buffer to respond to future uncertainty,” she wrote.

Prices remain elevated, and the cumulative effects of high inflation and high interest rates continue to weigh heavily on Americans, especially those who have little wiggle room in their monthly budgets. As of December 2024, prices were 10% higher than their pre-pandemic trend, new data from the Federal Reserve Bank of St. Louis shows.

Soft signals about the economy

The pullback in spending comes at a time when American consumers are growing increasingly pessimistic on fears that inflation will pick up because of President Donald Trump’s talk of wide-ranging tariffs, according to various surveys.

Trump has floated reciprocal tariffs on America’s trading partners and 25% duties on Mexico and Canada as well as an additional 10% tariff on Chinese goods.

The University of Michigan’s February consumer survey showed that long-run inflation expectations surged to their highest level in nearly three decades.

The concern with higher inflation expectations is that they can be self-fulfilling to some extent: If consumers anticipate that prices will remain high, they might pull the trigger on large purchases and demand higher wages, and businesses might raise prices in response.

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Recent data has indicated shifts in purchases made by consumers and businesses — likely tied to uncertainty around tariffs.

Fed officials have expressed in recent speeches that it’s crucial for people to keep faith that inflation will eventually return to normal in the long run.

While uncertainty has swelled in part because of the shock-and-awe policy moves from the Trump administration, it remains to be seen how actions such as steep and broad tariffs, mass deportations, and the shrinking of the federal workforce could affect the broader economy.

Comerica’s Bill Adams noted that the consumer spending drop and the jump in the trade deficit could end up weighing on real GDP growth in the first quarter.

“The question is the extent to which they are one-offs,” he wrote in commentary. “Import growth will likely be strong in February as well, as companies race to get ahead of decisions on tariff increases. But like January’s drop in consumer spending, this is probably a temporary drag on GDP, since much of these imports will be companies pulling forward purchases that they otherwise would have made later in the year.”

CNN’s Bryan Mena and Elisabeth Buchwald contributed reporting.

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Western allies rally around Zelensky after Trump spat deepens rift with Europe

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Western allies rally around Zelensky after Trump spat deepens rift with Europe

Europeans scramble to show leadership of the ‘free world’ as U.S. alliance fractures

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Europeans scramble to show leadership of the ‘free world’ as U.S. alliance fractures

For European leaders, it’s not clear what the way back could be for the transatlantic alliance built over the past 80 years.

How Putin may take over the whole world?

First of all, Putin was a KGB Colonel in East Germany BEFORE the Berlin Wall fell.

Part of the training of a KGB officer is to be very machiavellian

which just means "Any means justifies the ends".

And the ends being the overthrow of all governments on earth to forward the Russian Empire historically.

So, Putin has no friends outside of Russia at all.

And Trump is a complete fool along with Musk to think that Putin is their friend or that they can believe one word that comes out of Putin's mouth regarding anything.

This is the real truth here.

Putin will Eat Trump and Musk for Breakfast.

In fact, he has already started by eating their brains first.

Believing ANYTHING that Putin tells you is him eating your brains for breakfast.

And the way Putin is eating Trump's brain now is giving him compliments and never lying to him.

YET.

The first time Trump realizes that PUTIN lied to him likely his plane will be blowing up or crashing.

Then it will be too late!

Being Afraid all the time isn't useful to anyone

Accepting that we likely are in World War III already because of Trump's mental illness might be a good thing to do.

So, preparing for how you are going to survive this with your family might be important now.

However, just panicking isn't going to work.

Imagine you are Zelensky trying to keep your people alive and not all murdered by Putin.

I think this is a good place to start.

"How can you keep yourself and your family alive through the mess Trump and Musk are making here on earth?"

I think this is the most useful question to be asking yourself right now.

What can you do to survive this mess that is getting worse every day?

People who aren't thinking like this likely won't survive what is coming next.

And this is likely true worldwide not just here in the U.S.

The one thing I pretty much know for sure now.

Putin is going to murder Trump and Musk at his convenience now.

They are both such fools they think that Putin is their friend. Nope!

Putin is nobody's friend on earth right now.

He's too obsessed with Taking over the world and making it the new Russian Empire for that!

The Last day Gene Hackman was alive was February 17th 2025

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Gene Hackman and wife Betsy Arakawa tested negative for carbon monoxide, officials say

Authorities said Hackman likely died on Feb. 17, the last day his pacemaker recored an "event," nine days before the couple's bodies were found.

I find I can watch about 1/10 of the news on TV because the news is so very bad

I don't think anyone really thought that it would be possible for Trump to become Hitler, (especially many of the people he brainwashed into voting for him) yet here we are.y

So, I find that it is just so very bad for U.S. and the world in every way that it is hard to watch the news just like it would be hard to watch 1 million people die in person somewhere. Because if you had lived the last 76 years here in the U.S. you see all the signs of millions and millions of deaths from everything Musk and Putin are doing.

The main causes of death (at least in the U.S.) will be no Medicaid that will help pay for medicines and starvation from food being too expensive to buy for the poorest Americans. These are the two things that will kill the most Americans nationwide.

However, internationally Trump being president will mostly kill people through starvation from closing USAID food centers worldwide along with Ebola and other diseases like measles and Covid and possibly Bird Flu getting loose lately and more soon.

And the people dying in Ukraine and the rest of Europe when Putin takes it now that Trump won't ever fight Putin for any reason with the U.S. military the main cause of deaths in Ukraine and europe likely will also be starvation and also military attacks on European nations.

However, France and England and Israel won't go down to Putin until they nuke Russia and likely Moscow.

So, we are beginning to see how awful this World war III Trump is creating moment by moment now starting with how he is treating Zelensky, Ukraine and Europe in general. Trump is acting more like a Dictator or Warlord somewhere on earth more than anything else now.

He hasn't been a real U.S. president since his inauguration only a dictator taking away human rights of his voters and all others.

Brooks of PBS Newshour said something like: "Trump is making the U.S. Safe for Gangsters":(when referring to how he treated Zelensky on Friday)

And I agree with him.

Trump appears to be afraid of World war III so much he is doing EXACTLY what Neville Chamberlain did in the lead up to World War II in Europe when Chamberlain appeased Hitler to the point where Hitler took over most of europe (the mainland).

I think Trump thinks he is Putin of the United States or something.

However, Putin will Eat Trump for Breakfast just like he has killed so many Ukrainians already.

Trump is a fool to think that Putin won't kill him as soon as he thinks it is useful to him.

Trump will go the way of Prigozhin whenever Putin is ready to do this:

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2023 Wagner Group plane crash

Wikipedia

https://en.wikipedia.org › wiki › 2023_Wagner_Group...

Among the victims were Yevgeny Prigozhin, Dmitry Utkin and Valery Chekalov, the key figures of the Wagner Group, a Russian state-funded private military company ...

Bodies from Yevgeny Prigozhin plane crash contained 'fragments of hand ...

Zelenskyy remains defiant after blowup with Trump and Vance

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https://www.nbcnews.com/politics/trump-administration/live-blog/trump-zelenskyy-russia-ukraine-white-house-live-updates-rcna193942

Last updated Feb. 28, 2025, 9:07 PM PST

Zelenskyy remains defiant after blowup with Trump and Vance

The Ukrainian president said he does not owe Trump an apology after the heated Oval Office exchange.

Special Report: Zelenskyy leaves White House after clash with Trump

05:51

Updated Feb. 28, 2025, 9:07 PM PST

By NBC News

What's going on today

Ukrainian President Volodymyr Zelenskyy remained defiant in the hours after the tense public confrontation with President Donald Trump and Vice President JD Vance in the Oval Office, saying he does not owe the president an apology.
Zelenskyy abruptly exited the White House after the spat and a planned joint press conference for the afternoon was canceled. Trump accused Zelenskyy of "gambling with World War III" and Zelenskyy suggested that the U.S. is largely spared from the effects of the war because of the "nice ocean" separating the U.S. from Europe.
The bilateral meeting was supposed to focus in part on a potential U.S.-Ukraine deal on the European country's rare earth minerals, which are used to make a variety of tech products.
The Supreme Court has received briefings in the Trump administration's request to be allowed to withhold payments from contractors at the U.S. Agency for International Development. The justices could rule on the request at any time.
Trump is expected to sign an executive order that would aim to make English the official language in the country. Currently the U.S. does not have an official language.

‘Devastated.’ ‘Cruel.’ ‘Surreal.’ Federal workers share the toll of losing their identity

Rebecca Shabad, Natasha Korecki, Nnamdi Egwuonwu, Aria Bendix, Allan Smith, Garrett Haake, Julie Tsirkin and Amanda Terkel

They're scientists, veterans, park rangers, lawyers, researchers, and administrative staff. They work on fire safety, safe drinking water, veterans' health, combatting bird flu. They're from all over the country, in red states and blue. They're young and old.

Thousands of federal workers have been fired in the last month. They're victims of efforts by Trump and his senior adviser, billionaire tech mogul Elon Musk, to cut the size of the government. And they want people to understand what they did and why they loved being public servants..

Read the full story.

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