Stock Market Update Thursday February 27, 2025

Stock Market Update – Thursday, February 27, 2025

Today's session saw an acceleration in selling pressure, as early rebound attempts faltered amid renewed tariff concerns and key economic data releases. Equities initially showed resilience, with Nvidia (NVDA) edging higher post-earnings, but sentiment quickly deteriorated. NVDA reversed nearly 13% from its morning highs to close down 8.5%, dragging broader markets lower.

Revisions to prior inflation data and a rise in initial jobless claims reignited stagflation fears, further weighing on risk appetite. By the close:

• The S&P 500 (SPX) slid 1.6%

• The Nasdaq 100 (QQQ) tumbled 2.75%

• The Russell 2000 (IWM) shed 1.5%

With investors now eyeing tomorrow’s January PCE report, the late-session selloff pushed the S&P 500 into negative territory for the year.

Away From Stocks:

The Treasury curve steepened, with yields rising:

• 2-year Treasury: 4.07% (+2 bps)

• 30-year Treasury: 4.56% (+5 bps)

In commodities, WTI crude oil rebounded to $70 per barrel, while gold slid 1.5% to $2,873 per ounce. In crypto markets, Bitcoin retreated to $83,400, and volatility surged, with the VIX spiking above 21, marking its highest close of 2025.

Investor Sentiment Hits Extreme Fear Levels:

The stock market has plunged to an Extreme Fear level of 19, the lowest since August 2024. Meanwhile, the AAII investor sentiment survey shows that 60% of investors are bearish, the most pessimistic reading since September 2022.

Despite this, the SPY ETF has yet to enter oversold territory, leaving room for further downside. Investors should also keep a close eye on the Russell 2000 (IWM) ETF, a crucial indicator of overall market health and risk appetite.